CT Strategies: Takeaways from the 2018 CBP Trade Symposium: Part 2: E-Commerce, ACE, Single Window

This is part two of our 2018 Trade Symposium Recap Series. In this part, we discuss some of the challenges CBP is facing with E-Commerce, ACE and the Single Window program. 

We recommend reading Part 1 of our series for a detailed look into challenges recent technological innovations and pressing challenges CBP as an Agency faces. 

Readers interested in how CBP and Private Sector are partnering to combat a host of trade violations, including Forced Labor, and the ways by which CBP aims to help its most trusted partners would be most interested reading Part 3 of our series. 


​The CT Strategies team was pleased to attend the annual U.S. CBP Trade Symposium in Atlanta on August 14th-15th in Atlanta. The event presents a great opportunity to network with former colleagues from CBP, current associates in the trade industry, and hear CBP’s message to the trade community. We are sharing our takeaways from the Trade Symposium in three parts.

In part one, we discussed technological innovations, such as automated cargo processing for trucks, Blockchain and Artificial intelligence, and cyber security challenges the agency faces.
Today, we focus on the challenges CBP faces as it relates to E-Commerce, ACE/ Single Window. We also present a specific case where CBP presents some of the challenges facing the Single Window in importing specific items, in this case Alligator Skin Car Seats. 

In part one, we discussed technological innovations, such as automated cargo processing for trucks, Blockchain and Artificial intelligence, and cyber security challenges the agency faces.
Today, we focus on the challenges CBP faces as it relates to E-Commerce, ACE/ Single Window. We also present a specific case where CBP presents some of the challenges facing the Single Window in importing specific items, in this case Alligator Skin Car Seats. 

Informal Entry Data Collection, Info-Sharing from IP Rights Holders and Other Ways CBP is Looking to Reduce Risk Associated with the “Tsunami of Small Packages” Attributed to E-Commerce: 

​The massive increase in small packages imported to the U.S. in recent years (300M in 2016 to 600M in 2017) has created tremendous challenges to CBP’s risk management operations.  Executive Assistant Commissioner for the Office of Trade, Brenda Smith, has declared it the number one challenge facing CBP’s trade mission. Many of these small packages are imported as “informal entries”, below the $800 de minimis value, meaning they do not require duty or data typically used by CBP to identify high risk shipments. One new tactic being considered is collection of some degree of additional data typically associated with formal entries (e.g. shipper, consignee, value, quantity, 10-digit HTS code). New automation processes would need to be put in place. CBP will work with the trade community to implement any new data requirements in a way that best balances enforcement and facilitation.

CBP has already had some success expanding electronic advance data collection on international postal shipments coming into JFK Airport, resulting in an increase in seizures of contraband from China. CBP is also asking rights holders to share more information about their copyrights in order to improve detection of counterfeit items. Intellectual property rights violations have been one of the significant challenges presented by e-commerce.

​International Partnerships

​In addition to industry, CBP is also looking to international partnerships and through the World Customs Organization (WCO). To the extent that compliance, enforcement, and data-collection strategies can be harmonized by customs agencies around the world, it will help drive best practices in risk mitigation and industry engagement.

Commissioner McAleenan added that CBP needs to be educated by the trade about evolving e-commerce business practices so that the agency can better evolve its e-commerce activities as well. He stated that perhaps an e-commerce partnership program like ACAS may be something to consider.

CBP Recognizes the Need to Maintain and Refine ACE

​While core functionality for the Automated Commercial Environment (ACE) was completed in February 2018, a major achievement for CBP, Commissioner McAleenan acknowledged that the trade industry was not completely satisfied and that there was still a need for fixes and upgrades to continue in the future.  Redundancies to guard against outages, full functionality for all modes, and further integration with the Partner Government Agencies (PGAs) will continue to be pursued.

CBP will need annual funding from Congress, beyond standard maintenance funding, to continue ACE development. The PGAs may also need to request Congressional appropriations to develop functionalities specific to their agencies.  Regarding industry engagement, the Commissioner stated that requests for ACE would continue to flow through the Office of Trade Relations and the Customs Commercial Operations Advisory Committee (COAC). He also indicated that the Trade Support Network (TSN) may be reinvigorated to help engage technical support from industry.

Importing a Car with Alligator Skin Seats could be Challenging until further Single Window Enhancements are Made 

​During the Border Interagency Executive Council (BIEC) panel, CBP Executive Director in the Office of Trade, John Leonard, was joined by representatives from CBP, the FDA, the Fish & Wildlife Service (FWS), and the private sector. Discussion focused on what CBP and the PGAs are doing to advance the Automated Commercial Environment (ACE) and Single Window interoperability between agencies.

Partner Government Agency Functionalities

Now that ACE core functionality is finished, post-core implementations are being made on a prioritized basis, considering importance to the trade, the government, and available funding. XD Leonard noted that there are objective criteria for expanding automation capabilities of ACE (the Single Window).

Officials from FDA and FWS noted that tariff codes for their products can sometimes be ambiguous and therefore difficult to know which agency has jurisdiction. For example, when importing a car with alligator skin seats, it may not be readily known whether the seats are an agriculture issue through the USDA or an FWS issue. PGAs will need to fund some of the requested enhancements themselves as progress is made in addition to CBP’s ACE/Single Window funding.

Unique Identifiers

There was also discussion about the Global Business Identifier Initiative, an effort to replace the Manufacturer ID # as a unique identifier for all trade entities. Currently, two different options are being tested, both administered by non-profit organizations, at relatively low cost to the trade participants.