Simplified Processes Initiative - API/media/Files/Policy/17-March...Simplified Processes Initiative...

U.S. CUSTOMS AND BORDER PROTECTION

Simplified Processes Initiative

March 2017

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Pre-Decisional Pre-Decisional


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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 2016-2017


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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.

Drawback Develop 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.


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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.

DrawbackProtest

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.

U.S. CUSTOMS AND BORDER PROTECTIONPre-Decisional Pre-DecisionalU.S. CUSTOMS AND BORDER PROTECTIONPre-Decisional Pre-Decisional

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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Sta

keh

old

er

En

gag

em

en

t

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

An

aly

sis 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.

Mo

cku

p

Dev

elo

pm

en

t

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.


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 1Stakeholder Priority

Factor 2Business Requirement

Factor 3System Infrastructure

and Capability

Factor 4Statutes 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

Summary


• 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 transactions

NATIONAL 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

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Petroleum Importer

1,098 Daily Statements

88 Periodic Monthly Statements

6 National Monthly Statements

Initial data analysis on how a National

Monthly Statement can streamline the

Periodic Monthly Statement process for one

petroleum importer in a 3-month period


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The Monthly Statement captures all transactions, including credits and debits issued

from bills and refunds.

Monthly Entry Data

Entry Summary Number

Entry Date Entry Summary DateEntry Type

Filer CodeProcessing 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-00000017 6/15/2016 6/25/2016 06 ZZZ-007 1703 100000008 $0 $0 $0 $0 $0 $100 $20 $0 $120

ZZZ-00000018 6/17/2016 6/27/2016 01 ZZZ-008 2704 100000009 $60,000 $3,000 $600 $0 $0 $100 $20 $100 $63,820

ZZZ-00000019 6/19/2016 6/29/2016 11 ZZZ-009 0101 100000010 $22,000 $1,100 $220 $0 $0 $100 $20 $0 $23,440

ZZZ-00000020 6/21/2016 MONTHLY MULTI ZZZ-010 MNTHLY 100000011 $50,000 $2,500 $500 $0 $0 $100 $20 $200 $53,320

ZZZ-00000021 6/23/2016 7/3/2016 03 ZZZ-011 2704 100000012 $10,000 $500 $100 $0 $0 $100 $20 $0 $10,720

ZZZ-00000022 6/25/2016 7/5/2016 06 ZZZ-012 0101 100000013 $0 $0 $0 $0 $0 $100 $20 $0 $120

ZZZ-00000023 6/27/2016 7/7/2016 01 ZZZ-013 1703 100000014 $36,000 $1,800 $360 $0 $0 $100 $20 $0 $38,280

ZZZ-00000024 6/29/2016 7/9/2016 11 ZZZ-014 2704 100000015 $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 Refunds

Protest or Claim Number

Entry Date Entry Summary DateEntry Type

Entry Number Processing Port Liquidation DateCase Filing

DateDuty Tax Interest ADD CVD MPF HMF

Fees or Penalty

Total

PRTST CLAIM 001 6/1/2016 6/11/2016 01 ZZZ0001112 0101 100000001 1/1/2016 ($25,000) $4,500 $900 $0 $0 $0 $0 ($100) ($19,700)

PRTST CLAIM 002 6/3/2016 6/13/2016 03 ZZZ00011123 1703 100000002 3/15/2016 $0 $900 $180 $30 $0 $0 $0 $50 $1,160

Bill- 001 6/5/2016 6/15/2016 06 ZZZ00011124 2704 100000003 - $10,000 $1,000 $200 $0 $0 $0 $0 $0 $11,200

Bill- 002 6/7/2016 6/17/2016 01 ZZZ00011125 2704 100000015 ($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

Importer Name: IMPORTER ABCD

Importer Number: 012345-ABCDE

Importer ACE ID: 11223344AABB

Processing CEE: Electronics

$366,230

Total Duties Total Tax Total ADD Total CVD Total MPF Total HMF Total Fees

$340,000 $17,000 $3,400 $30 $3,000 $1,500 $300

($36,190)

Total Duties Total Tax Total ADD Total CVD Total MPF Total HMF Total Fees

($45,000) $7,400 $1,480 $30 $0 $0 ($100)

Total Due: $330,040

ZZZ-000

ZZZ Brokerage

Monthly Entry Summary Totals:

Monthly Other Bills and Refunds Totals:

EIN Number

Filer Code:

Filer Name:

EIN ###

Net balance owed or

refunded after aggregating all

debits and credits for one

final financial transaction


LINE-LEVEL LIQUIDATION

Line Level Liquidation Life Cycle Process

U . S . C U S T O M S A N D B O R D E R P R O T E C T I O N –

S I M P L I F I E D P R O C E S S E S : P O S T - R E L E A S E W I T H L I N E - L E V E L L I Q U I D A T I O N

CARGO IS RELEASED

ENTRY SUMMARY IS FILED

DUTY, TAXES AND FEES

ARE PAID

RLF FOR ALL ENTRY TYPES

PROTEST(UP TO 180 DAYS)

LIQUIDATION +POST NOTICE

(IF NO ACCELERATED LIQUIDATION REQUESTED)

RECONCILIATIONDATA UPDATES


DRAWBACK(UP TO 3 YEARS)

Filer options:

Submit changes (if none, perform no action)

If change is made, set for liquidation

Can request accelerated liquidation

Can submit changes in an aggregate manner

Filer options:

File a post summary correction


TBDDAYS


+TBD DAYS

1 YEAR

SUSPENSIONAD/CVD

LIQUIDATION +POST NOTICE(IF UNFLAGGED)

Protest/AFR is properly linked to collections

Protest claims are linked against the same

decision by different authorized parties

The process is automated for linking data

directly related to a protest



FLAGGED FOR RECONCILIATION AT FILING (OPTIONAL)

1LINE 1:

NO ACTION NEEDED COO HTS QTY VALUE

LINE 2:

POST SUMMARY

CORRECTION (PSC)

(COMPLETE REPLACE)

LINE 3:

RECONCILIATION

LINE 4:

SUSPENSION/EXTENSION

COO HTS QTY VALUE

COO HTS QTY VALUE

COO HTS QTY VALUE

2

3

4

Filer options (via PSC):

Retroactive flag, extension

If un-flagged, extension is removed

TBDDAYS

2 YEARS



Identified Benefits

1. 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.

2. Since Drawback is filed at the line-

level, having line-level liquidation

would allow importers to submit their

Drawback claims a lot faster.

3. Importers with limited importer goods

and Special Program Indicators (SPIs)

would benefit form line-level

liquidation.

4. With line-level liquidation, an importer

can file a protest at the line-level and

closeout remaining transactions.

5. 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


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

Surety

Number

Manufacturer

ID

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.


1 Monthly Summary

(Pharmaceutical Industry)

Importer #3.


1 Monthly Summary

(Apparel Industry)

4,236 200 5,789

Importer #4.


1 Monthly Summary

(Automotive Industry)

103

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Requirements

Examples


MONTHLY SUMMARY: Mockup, Benefits, and Other FeedbackIdentified Benefits

1. Organizing 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.

2. 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.

3. 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.

4. 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.

Entry

Type HTS MID Number MOT COO COE SPI

HTS

Quantity 1

Estimated

Duty (HTS)

Estimated

Duty (AD)

Estimated

Duty (CVD)

01 HTS-AAAA-101 MID-ZZZ-001 10 COO-1 COE-1 46000 24,150$ -$ -$

HTS-AAAA-101 MID-ZZZ-002 40 COO-1 COE-1 48000 25,200$ -$ -$












11 HTS-AAAA-106 MID-ZZZ-014 10 COO-1 COE-1 43000 52,325$ -$ -$













A Monthly Summary example

Feedback from the trade and Partner Government Agencies

1. Further define proposed requirements and structure of the Monthly Summary

2. 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

3. CF-28 and Audit pools would need to be reduced as an added benefit

4. Propose a cap on liquidated damages to offset the financial risk

5. Census requires the Monthly Summary to be submitted by the 10th calendar day of the

subsequent month in order to meet U.S. economic and GDP reporting requirements 11


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The 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 during the next ACE development

• 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



Reconciliation Process Concept

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• Filers will flag an entry line for reconciliation which extends the liquidation date an extra year

• The 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 mark

• If no reconciliation changes are required, no action is required and will be set for liquidation

• Reconciliation changes made via the PSC process and can be done in an aggregate manner


EXAMPLE:

LINE FLAGGED FOR

RECONCILIATION

FLAGGED

@ ENTRY

Filer options:

File a post summary correction

Flag or retroactive flag

If un-flagged, extension is removed

Eliminate separate filing a 09 entry

Filer options:

Submit changes (if none are needed,

perform no action)

If change is made, set for liquidation


Can submit changes in an aggregate

manner

1 YEAR 2 YEARS

COO HTS QTY VALUE

S I M P L I F I E D P R O C E S S E S : L O N G - T E R M V I S I O N O F R E C O N C I L I A T I O N

CARGO IS RELEASED

ENTRY SUMMARY IS

FILED

DUTY, TAXES AND

FEES ARE PAID

RLF FOR ALL ENTRY

SUMMARIES

LIQUIDATION

+POST NOTICE

(IF NO

ACCELERATED

LIQUIDATION

REQUESTED)

PROTEST

(UP TO 180

DAYS)

RECONCILIATION

DATA UPDATES

DRAWBACK

(UP TO 3

YEARS)

LIQUIDATION +POST

NOTICE

(IF UNFLAGGED)


Question and Next Steps

For additional information, please contact:

Randy Mitchell, Director, Commercial Operations and Entry Division

[email protected]

or

[email protected]

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