Simplified Processes Initiative March 2017 1 PreDecisional PreDecisional Socialize recommendations from Phase 1 and Phase 2 Working Group sessions with associations Prioritize recommendations ID: 635644
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U.S. Customs and border protection
Simplified Processes InitiativeMarch 2017
1
Pre-Decisional
Pre-DecisionalSlide2
Socialize recommendations
from Phase 1 and Phase 2 Working Group sessions with associations.Prioritize recommendations based on inputs and feedback.Develop a multi-year Simplified Processes Action Plan
.
Plan for the future of ACE and programmatic enhancements.
Recommendations Refinement & Prioritization
Simplified Processes Initiative Background
Background
:
In 2011, CBP launched the Simplified Processes Initiative, a collaborative effort to develop innovative solutions to critical issues emerging at the intersection of trade facilitation, enforcement, and national security.
The successes resulting from the start of this initiative, to include the Simplified Entry pilot, established a foundation for new solutions aimed at simplifying the importation process.
CBP reengaged the Simplified Processes Initiative in 2014 to advance border security and management; enhance U.S. competitiveness by enabling lawful trade and travel; and promote organizational innovation – all in line with Commissioner Gil Kerlikowske’s CBP 2020 Vision and Strategy.
Objective: Develop transformation strategy and manage implementation of policy, processes and technology recommendations to optimize the import and export process through collaboration with the trade and CBP.
Approach: A Simplified Processes Working Group was established to identify challenges and discuss potential solutions to critical trade needs; gather requirements; and develop a proposed alternative.
Other Post-Summary Processes
Conducted a research and development effort to
define the desired future-state of post-summary processes.Identified government and trade business needs and opportunities for improvement within the reconciliation, liquidation, protest, drawback and remote location filing (RLF) processes.
Examined the import summary and revenue collections processes and identified opportunities for improvements.Developed a draft Simplified Processes concept, which included recommendations to improve the Entry Summary, payment, and adjustment processes.
Summary and Revenue Collection
2014
2015
2016-2017Slide3
Key Recommendations
Monthly Summary & National Statements
Filers may submit a monthly summary that includes releases over a calendar month's time.
Each line of a monthly summary is considered a "reconfigured entry" that is subject to liquidation, protest and any other downstream process.
A separate National Financial Monthly Statement will include debits (duties, taxes, fees, bills and interest) and credits (refunds) netted as a total balance due for a calendar month.
Liquidation
Allow for deem liquidation of all consumption entries at one (1) year from the date of entry.
Implement processes to accommodate line-level liquidation.
Allow for the importer to obtain liquidation status details from their ACE portal account or CBP.gov.
Protest
Transition the protest process to an electronic format.
Expand the electronic protest filing to a broader range of trade stakeholders such as attorneys, importers, and sureties.
Auto-populate numerous Entry Summaries onto one protest
while providing protest statuses on ACE.
Reconciliation
File all reconciliation data electronically and only with necessary data elements. Eliminate the requirement of having to file an 09 entry and extend liquidation for flagged entries/lines an extra year from the date of entry.
Manage reconciliation by account and permit filing at any Center or POE.DrawbackDevelop a process for the claimant to submit a “drawback profile” electronically along with automating other
Drawback processes in ACE. Track/validate if the bond coverage is sufficient prior to processing an Accelerated Payment requests.
Initiate the Desk Review and response processes electronically, to include DIS.
The working groups from 2014 and 2015 proposed recommendations that transform existing programs and processes.
Functional Area
The working groups developed over 60 recommendations to improve the import process starting from the vetting of Trusted Trader programs, to filing an Entry Summary, the finalization of Drawback claims, to liquidating entries. Below are several key recommendations across the functional areas analyzed by the working groups. Slide4
Protest can be
submitted electronically
through a Protest Portal
.
Filers can easily upload up to 9,999 entries using standard .
xls
or .
cvs
files.ACE will
automatically generate a protest tracking number.
If a protest is submitted electronically, then the approval or denial notification will be sent electronically.The system will provide an interim status of submitted protest.We are already implementing many of these recommendations as part of the ACE 2017 deployment.
Drawback
Protest
Reconciliation
Reconciliation will be filed electronically. As a result,
CDs and spreadsheets are no longer required. Trade will no longer need to provide original and reconciled amounts. Trade will only need to provide reconciled amounts, as the system will automatically calculate duties, taxes, and fees of the original entry.
Working towards expanding Reconciliation processing beyond the 13 designated ports. The goal is to have the reconciliation program expanded across all 10 Centers. Liquidation
Official notice of liquidations (bulletins) will be entirely paperless
and will be posted on CBP.gov.
Liquidation will occur on weekly cycle
vice the bi-weekly cycle it currently follows.
Importers have the
ability to obtain liquidation status
details from their ACE portal account.
ACE has the
technical infrastructure to implement new updates
and liquidation processes modifications. For example, ACE has the capability to liquidate and account for changes in duties, taxes, and fees at the line level.
ACE controls will
track and validate if the bond coverage is sufficient
prior to processing an Accelerated Payment request.
Developed a process for the claimant to submit a
drawback profile electronically
leveraging the 5106 form.
CBP Form 7552 will be eliminated
with respect to
Certificate of Manufacture and Delivery (
CM&D).
The
desk review and response process will be electronic
and will include DIS capability. Slide5
The team leveraged the following approach to develop a transformation strategy that manages the implementation of policy, processes, and technology recommendations in order to optimize the process of importing goods through collaboration with the trade community and CBP.
Simplified Process Initiative: Activities in 2016
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Stakeholder Engagement
Engaged with 14 trade associations including: AAEI, BACM, NAM, PCC, NRF, CSEC, NCBFAA, USCIB, BTA, EAA, NAFTZ, NBCBA, ITSA, API.
Trade associations were asked to contact their members for priorities as well as quantitative and qualitative benefits of Simplified Processes.
Coordinated with ACE Business Office to discuss ongoing Post-Summary accomplishments related to Simplified Processes.
Facilitated two meetings with U.S. Census to discuss the impact to their analysis and reporting if a simplified summary recommendation was implemented.
Data Analysis
Analyzed 5 months of entry data for a selection of filers from Center industries.
Reviewed nearly 100,000 entries and 250,000+ lines to determine opportunities where filers could potentially benefit from transitioning to a monthly Simplified Summary format.
Additionally analyzed impacts of a National Monthly Statement and how it can streamline the amount of Daily and Periodic Monthly Statements.
Mockup Development
Developed a Monthly Statement mockup to include debits (duties, taxes, fees, bills and interest) and credits (refunds) netted as a total balance due for a calendar month.
Coordinated with CBP and ABO SMEs to determine header and line level requirements for a Simplified Summary.
Facilitated three workshops with AAEI members, hosted by Honda. Attendees included importers, brokers, sureties, and software developers.
Developed a Monthly Summary mockup based on the data analysis for stakeholder discussion.Slide6
CBP will prioritize its efforts to develop the Simplified Processes Road Map
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Four factors will be used to evaluate and prioritize recommendations:
Factor 1
Stakeholder Priority
Factor 2
Business Requirement
Factor 3
System Infrastructure and Capability
Factor 4
Statutes and Regulations
Is the recommendation a top priority for the trade?
Has the concept been vetted by stakeholders, and has a design been developed?
Does the capability and technological infrastructure exist within ACE/CBP Systems?
Does the recommendation requires statue or regulation changes?
High
priority for a majority of the trade
Business requirements for the recommendations are developed, or are in the process of being finalized
The
capability and technological infrastructure exist within ACE/CBP Systems
The recommendations do not require statue or regulation changes
A high
priority for select members of the trade, or considered a mid-tier priority
Business requirements for the recommendations are in the development phase
The capability and technological infrastructure partially exist within ACE/CBP Systems and would
require modifications
The recommendations potentially requires statue or regulation changes and additional research is needed
Not seen
as a
top
priority for a majority of the trade
The business requirements for the recommendations have not been developed
The
capability and technological infrastructure does not exist within ACE/CBP Systems
The recommendations do require statue or regulation changes
Top Recommendations:
National Monthly Statement (phased implementation)
Reconciliation (eliminating 09 Entry; use PSC process)
Line-Level Liquidation (longer term)
Monthly SummarySlide7
The proposed next steps for designing and developing the requirement for the Monthly Statement include rolling out three different phases. Each phase would be a version of the Monthly Statement that would include a new feature that accounts for a different type of financial transaction (e.g., bills, refunds, protests, and possibly drawback).
Improves the Periodic Monthly Statement process and streamlines financial transactionsNATIONAL MONTHLY STATEMENT
Version 1.0
Requirements and format would include all entries in a calendar month for all POEs into one statement
Process would apply for both importer statements and broker statements
Eliminate the need for Daily Statements
Version 2.0
Adding bills incurred during the referenced calendar month
Statute changes need to address 30-day due date requirement
Immediate need is adding additional payment methods, like Pay.gov, to pay bills and in an aggregate manner
Version 3.0
Adding refunds (excluding Drawback) that accrued during the referenced calendar month. This may be difficult from an accounting perspective
Collections and Financials need to be fully incorporated into ACE
7Slide8
8The Monthly Statement captures all transactions, including credits and debits issued from bills and refunds.
Monthly Entry Data
Entry Summary Number
Entry Date
Entry Summary Date
Entry
Type
Filer Code
Processing Port/CEE
Reference Num.
Duty
Tax
Interest
ADD
CVD
MPF
HMF
Fees or Penalty
Total
ZZZ-00000010
6/1/2016
6/11/2016
01
ZZZ-000
0101
100000001
$90,000
$4,500
$900
$0
$0
$100
$20
$50
$95,570
ZZZ-00000011
6/3/2016
6/13/2016
03
ZZZ-001
1703
100000002
$18,000
$900
$180
$30
$0
$100
$20
$0
$19,230
ZZZ-00000012
6/5/2016
6/15/2016
06
ZZZ-002
2704
100000003
$20,000
$1,000
$200
$0
$0
$100
$20
$0
$21,320
ZZZ-00000013
6/7/2016
MONTHLY
MULTI
ZZZ-003
MNTHLY
100000004
$0
$0
$0
$0
$0
$100
$20
$250
$370
ZZZ-00000014
6/9/2016
6/19/2016
11
ZZZ-004
1703
100000005
$14,000
$700
$140
$0
$0
$100
$20
$100
$15,060
ZZZ-00000015
6/11/2016
6/21/2016
01
ZZZ-005
2704
100000006
$0
$0
$0
$0
$0
$100
$20
$200
$320
ZZZ-00000016
6/13/2016
6/23/2016
03
ZZZ-006
0101
100000007
$0
$0
$0
$0
$3,000
$100
$20
$0
$3,120 ZZZ-000000176/15/20166/25/201606 ZZZ-007 1703100000008 $0 $0 $0 $0 $0 $100 $20 $0 $120 ZZZ-000000186/17/20166/27/201601 ZZZ-008 2704100000009 $60,000 $3,000 $600 $0 $0 $100 $20 $100 $63,820 ZZZ-000000196/19/20166/29/201611 ZZZ-009 0101100000010 $22,000 $1,100 $220 $0 $0 $100 $20 $0 $23,440 ZZZ-000000206/21/2016MONTHLYMULTI ZZZ-010 MNTHLY100000011 $50,000 $2,500 $500 $0 $0 $100 $20 $200 $53,320 ZZZ-000000216/23/20167/3/201603 ZZZ-011 2704100000012 $10,000 $500 $100 $0 $0 $100 $20 $0 $10,720 ZZZ-000000226/25/20167/5/201606 ZZZ-012 0101100000013 $0 $0 $0 $0 $0 $100 $20 $0 $120 ZZZ-000000236/27/20167/7/201601 ZZZ-013 1703100000014 $36,000 $1,800 $360 $0 $0 $100 $20 $0 $38,280 ZZZ-000000246/29/20167/9/201611 ZZZ-014 2704100000015 $20,000 $1,000 $200 $0 $0 $100 $20 $100 $21,420 Totals $340,000 $17,000 $3,400 $30 $3,000 $1,500 $300 $1,000 $366,230 Other Bills and RefundsProtest or Claim NumberEntry DateEntry Summary DateEntry TypeEntry NumberProcessing PortLiquidation DateCase Filing DateDutyTaxInterestADDCVDMPFHMF Fees or PenaltyTotalPRTST CLAIM 0016/1/20166/11/201601 ZZZ0001112 01011000000011/1/2016($25,000)$4,500 $900 $0 $0 $0 $0 ($100)($19,700)PRTST CLAIM 0026/3/20166/13/201603 ZZZ00011123 17031000000023/15/2016$0 $900 $180 $30 $0 $0 $0 $50 $1,160 Bill- 0016/5/20166/15/201606 ZZZ00011124 2704100000003-$10,000 $1,000 $200 $0 $0 $0 $0 $0 $11,200 Bill- 0026/7/20166/17/201601 ZZZ00011125 2704100000015 ($30,000)$1,000 $200 $0 $0 $0 $0 ($50)($28,850)Totals ($45,000)$7,400 $1,480 $30 $0 $0 $0 ($100)($36,190)
Entry Summaries and Monthly Summaries filed within the Monthly Statement reporting period
Processed bills and refunds from VA reviews and/or Protest cases posted during the Monthly Statement reporting period
DRAFT MONTHLY STATEMENT MOCK-UP: FOR DISCUSSION
Net balance owed or refunded after aggregating all debits and credits for one final financial transactionSlide9
LINE-LEVEL LIQUIDATION
Line Level Liquidation Life Cycle ProcessIdentified Benefits
Line-level liquidation allows importers and filers to liquidate entry summaries without having to wait for lines subjected to AD/CVD case reviews or other CBP reviews to be resolved.
Since Drawback is filed at the line-level, having line-level liquidation would allow importers to submit their Drawback claims a lot faster.
Importers with limited importer goods and Special Program Indicators (SPIs) would benefit form line-level liquidation.
With line-level liquidation, an importer can file a protest at the line-level and closeout remaining transactions.
CBP operates at the line-level and many of the post-summary processes are executed at the line level (e.g., drawback, Recon, Protest) which can help streamline CBP’s workload.
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Working Group recognized this is an inevitability, but stated it would be a paradigm shift to start tracking everything at the line level.
Open Items
Can CBP have two liquidation processes (header & line-level) for filers to choose?
Confirm line-level liquidation should be completed before reconciliation and monthly summary
Identify downstream effects and touch points including how MPF would be handled
Confirm legal challenges Slide10
MONTHLY SUMMARY:
Analyzing How to Create a Monthly Summary
Based on the Step 1 assumptions, determine opportunities where importers across different industries could potentially benefit from transitioning to a Monthly Summary format
Based on Step 2 activities, restructure data to form a more streamlined, efficient and user-friendly Monthly Summary format
Identify header and line-level requirements for CBP to process "reconfigured" entries based on previous Working Group feedback
Step 1
Identify
Step 2
Analyze
Step 3
Reconfigure
Reviewed Entry Summary (CBP Form 7501) input fields and identified
the inputs CBP requires to facilitate trade and conduct trade enforcement activities
Selected importers from different industries and analyzed
over
100,000 entries
, consisting of
250,000+ lines
to better understand their respective monthly importing trends
Importer Number
Surety Number
Bond Numbers
Consignee Number
Manufacturer ID
Country of Origins
+
-
%
=
$
Importer Number
Surety Number
Bond Numbers
➭
Consignee Number
HTS Codes
Entry Types
Country of Origins
…
Output
Consolidated line level information under the identified key requirements and reconstructed a proposed Monthly Summary format
Importer #1
Entries consolidated into
1
Monthly Summary
(Petroleum Industry)
Importer #2.
Entries consolidated into
1
Monthly Summary
(Pharmaceutical Industry)
Importer #3.
Entries consolidated into
1
Monthly Summary
(Apparel Industry)
4,236
200
5,789
Importer #4.
Entries consolidated into
1
Monthly Summary
(Automotive Industry)
103
10
Requirements
ExamplesSlide11
MONTHLY SUMMARY: Mockup, Benefits, and Other Feedback
Identified BenefitsOrganizing thousands of entries into a single Monthly Summary, the cost and manpower of an importer to maintain and for CBP to verify compliance would potentially be dramatically reduced.Instead of managing hundreds or even thousands of financial transactions (including checks), the importer can file a single Monthly Summary with a single estimated amount of duties, taxes, and fees due at the 10th calendar day of the subsequent month.
The data provided to CBP and PGAs from the trade community will be updated and more accurate. Currently, there is a 10-day requirement to file an entry summary. If the Monthly Summary is due in the following month, then importers have more time to modify their entry information with more informed/precise data.
The use of reconfigured entries on Monthly Summary enables each issue with respect to the covered imports to be handled individually without reference to other reconfigured entries. This allows importers to receive refunds without having to wait for all other issues to be resolved.
A Monthly Summary example
Feedback from the trade and Partner Government Agencies
Further define proposed requirements and structure of the Monthly Summary
Due to the time, resources, and investment needed to participate in a monthly summary program, the fees (i.e., MPF) need to be reduced to add to as a benefit
CF-28 and Audit pools would need to be reduced as an added benefit
Propose a cap on liquidated damages to offset the financial risk
Census requires the Monthly Summary to be submitted by the 10
th
calendar day of the subsequent month in order to meet U.S. economic and GDP reporting requirements
11Slide12
12The Reconciliation changes and recommendations are intended to automate and simplify the paper-based and cumbersome process.
Extend liquidation for flagged entries/lines an extra year from the date of entry. This will change the current process for the various types of Reconciliation and associated liquidation periods (e.g., NAFTA).
Eliminate the separate filing of 09 entry. This will be achieved through the Post-Summary Correction (PSC) process. If the reconciled entry requires updates (e.g., classification or value), the filer will make the changes and then the entry will then be subjected to liquidation. If no PSC is made, it indicates no changes are needed on the reconciled entry and is then subjected to liquidation.
Allow a filer to retroactively flag/un-flag an entry/line through a PCS in ACE up to the deem liquidation date. When un-flagged, the entry/line will revert back to the original deem liquidation date.
Receive and process reconciliation issue changes for an entry in an aggregate manner (i.e. rolled up by Harmonized Tariff Schedule (HTS), country of origin, Manufacturer Identification Number (MID), or other common data element(s)) or at the line level using the entry number and reconciliation adjustment. Systemically account for all changes at the line level.
Allow for the filer to request accelerated liquidation of the underlying entry when an entry/line is reconciled.
Implement the Simplified Processes Reconciliation requirements in a phased manner in order to accommodate more complex entry types (e.g., 03-Consumption AD/CVD).
Remaining Reconciliation Recommendations
A lot of good discussion with the working group on the Reconciliation program improvements to be implemented in January 2017
Group recommended the trade community see how the upcoming improvements work with their business operations before additional enhancements are added into ACE
Reconciliation is recognized as one program that needs the most streamlining
Pre-Decisional
Pre-DecisionalSlide13
Reconciliation Process Concept13
Filers will flag an entry line for reconciliation which extends the liquidation date an extra yearThe filer can unflag the entry line during the normal PSC process timeframe within the first year, which will revert the liquidation date back to the one-year markIf no reconciliation changes are required, no action is required and will be set for liquidationReconciliation changes made via the PSC process and can be done in an aggregate manner
Pre-Decisional
Pre-DecisionalSlide14
Question and Next Steps
For additional information, please contact:
Randy Mitchell, Director, Commercial Operations and Entry Division
Randy.Mitchell@cbp.dhs.govor
SimplifiedProcesses@cbp.dhs.gov
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