Automated Commercial Environment (ACE) Update and Status August 8, 2013 Brenda Smith, Executive Director, ACE Business Office Phil Landfried, Executive Director, Cargo Systems Program Office U.S. Customs and Border Protection

ACE Progress Pre-Arrival Arrival Post Release Exports Finance Expands data available to assess safety, security, compliance Arrival Enables speedier release of legitimate imported cargo Post Release Modernizes data requirements to validate trade law compliance Exports Modernizes processes and enhances assessment of cargo for safety, security, compliance Finance Streamlines payment mechanisms Bonds and Bond Processes Creation/Issuance of Periodic Monthly and Daily Statements Financial Components of Entry Liquidation and Drawback Fines and Penalties Interface (SEACATS) Importer Record Maintenance Red Flag Reporting Conveyance Mgmt PGA Reporting PGA Hold Requests Entry integration w/ truck Entry integration w/ air Truck integration w/ SE PGA Holds Entry integration w/ sea Entry integration w/ rail PGA integration Entry Corrections/ Cancellations ES Validations Liquidation Remote Location Filing Quota and Protest Remaining Entry Types Export Truck Manifest Export Rail Manifest Export Sea Manifest Export Air Manifest AES Re-Engineering Air Manifest Rail Manifest Sea Manifest Truck Manifest Initial ES Types AD/CVD Entry Summaries AD/CVD Case Mgmt Automated Forms Post Summary Corrections Simplified Entry Pilot Document Image System PGA Interoperability Periodic Monthly Statement DIS Sea Manifest Pilot 33% faster truck processing with ACE More than 143,000 Simplified Entries filed More than 25% of Entry Summaries filed in ACE Reduced courier/printing costs saving each participant ~$900K/year 69% duties & fees collected via ACE Plan is to complete core trade processing capabilities in ACE and decommission the Automated Commercial System (ACS) by end of 2016.

Transition to ACE Development/Deployment schedule published this week Consultation with CBP, Partner Government Agency and Trade Community stakeholders throughout development of schedule Mandatory dates for use of ACE: May 1, 2015: Mandated use of Manifest – All electronic export and import manifest data must be transmitted via ACE November 1, 2015: Mandated use of Cargo Release – All data associated with the release of cargo, including PGA interactions, must be transmitted via ACE October 1, 2016: Mandated use of ACE Stakeholder preparation for upcoming deployments Training assessment will be based on features scheduled for deployment Webinar, User Guide, Web-Based Training, etc. Trade users - Certification environment planned to be available 6 weeks prior to deployments Information will continue to be disseminated: CBP.gov Field Readiness SharePoint page for our CBP users CSMS (external) and CAMS (internal) Monthly CSN, TLC and ITDS Board of Directors meetings

ACE Development Roadmap Increment 3 August 7 to November 5, 2013 Increment 4 November 6, 2013 to February 4, 2014 Sprint 1 Sprint 2 Sprint 3 Sprint 4 Sprint 5 Sprint 6 SE integration - Ocean/Rail Manifest Partial Quantities for SE with In-bond Cargo Release data build out Finish cancellation process from ACE ES to SE Single Accept/Reject msg for SE Cargo Release/ Simplified Entry (SE) SE integration - Truck Manifest Certified from Summary ABI query capability for trade Transitional data synchronization - entry Sprint 0: Increment Planning Sprint 0: Increment Planning Entry Summary (ES) ES Validations - Duty Calculations Data management Single Accept/Reject msg for ES ES Validations - Informal Entry Restrictions and Merchandise Processing Fee Vessel Management System Mail Entry Writing System Air Manifest foundation Air transitional data synchronization Manifest Manifest Foundation AES Ocean Manifest transition AES new features Exports Air Manifest PGA Integration CBP Ag Specialist - streamlined findings input PGA expansion Next items on ACE Prioritized Product Backlog * Single Transaction Bond Remote Location Filing Simplified Entry diversion process Reporting for Entry Simplified Entry business validations Transition ACE Entry Summary to new ACE architecture Truck import manifest foundation Air cargo movement - In-bond, PTT, etc Air import manifest user interface features Ocean/rail export manifest NOTES: * Product Backlog is in current priority order. Schedule is subject to change as priorities for backlog items change. High confidence in projects scheduled for the next six months. All core functionality is identified in ACE Product Backlog.

Single Window Status Continuing work with National Security Staff ITDS Task Force to facilitate the onboarding of Participating Government Agencies (PGAs) to ACE. CBP meeting with FDA every two weeks to work onboarding plan Near term PGAs: Data: Census, Nuclear Regulatory Commission Export licensing: Bureau of Industry and Security, Directorate of Defense Trade Controls Hazardous waste monitoring: EPA PGAs currently onboard: DIS: National Marine Fisheries Service, Food Safety Inspection Service (FSIS), Animal and Plant Health Inspection Service, Center for Disease Control and Prevention, Environmental Protection Agency (EPA), Defense Contract Management Agency Interoperability: FSIS, Agriculture Marketing Service, U.S. Coast Guard, Consumer Product Safety Commission PGA Message Set (October): EPA, FSIS

Near-Term ACE Stakeholder Engagement INCREMENT 3 INCREMENT 4 Sprint 1 Sprint 2 Sprint 3 Sprint 4 Sprint 5 Sprint 6 CSN CSN CSN CSN CSN CSN CBP Subject Matter Experts On-Site CBP Weekly Field Readiness Network Updates ACE Update Webinar August 8 (all stakeholders) ACE Update Webinar October 2 Date may change (all stakeholders) NSS ITDS NSS ITDS NSS ITDS NSS ITDS NSS ITDS NSS ITDS PGAs ITDS Board ITDS Board ITDS Board ITDS Board ITDS Board ITDS Board PGA Subject Matter Experts On-Site TLC TLC TLC Increment 3, Sprint 5 Review October 24 TLC TLC TLC Trade Increment 3 Planning Session August 12 TSN Plenary Session September 26-27 Increment 4 Planning Session November 12 Increment 4, Sprint 5 Review January 21 CSN = Monthly ACE meeting with CBP Support Network NSS ITDS = Monthly National Security Staff ITDS Task Force meeting ITDS Board = Monthly ITDS Board of Directors meeting TLC = Monthly Trade Leadership Council meeting

U. S. Customs & Border Protection ACE UPDATE WEBINAR Entry Summary Validations Document Image System August 8, 2013 Monica Crockett, Director, Entry Summary Accounts & Revenue ACE Business Office U.S. Customs and Border Protection 8

Entry Summary Extended Validations Country of Origin (C/O Code) Country of Export (C/E Code) Classification Category The Classification category of validation will be applied to EACH line on an entry summary. The validations will evaluate relationships of Line Item data elements HTS#, Country (O & E), and Special Program Claim (and HTS# to Entry Type & Value of Goods) for compliance with import regulation. HTS (Tariff) #(Primary) 1) 234.11.1234 Special Program Claim (TA/SP Code) These elements are the basis for determining REVENUE AMOUNTS such as DUTY and MPF (Other Conditional) 2) 1234.11.1234 3) 1234.11.1234 4) 1234.11.1234 5) 1234.11.1234 6) 1234.11.1234 7) 1234.11.1234 8) 1234.11.1234

Entry Summary Extended Validations Country of Origin (C/O Code) Country of Export (C/E Code) Entry Type (Code) If NO…then DUTY and MPF cannot be determined Taken as a whole: Is the article’s declaration of HTS#, C/O, C/E, and Special Program claim consistent with import regulation? Is the article “classified” correctly? Value of Goods HTS (Tariff) #(Primary) 1) 234.11.1234 Special Program Claim (TA/SP Code) (Other Conditional) 2) 1234.11.1234 3) 1234.11.1234 4) 1234.11.1234 5) 1234.11.1234 6) 1234.11.1234 7) 1234.11.1234 8) 1234.11.1234 If YES…then DUTY and MPF can be determined

Error Codes and Text Error APP ID 480 HMF Not Allowed - Set Component 481 HMF Not Allowed For Entry Type 482 HMF Not Allowed for MOT 600 MOT Requires HMF 601 Estimated HMF/Calc'd HMF Mismatch 602 HMF Not Allowed - De Minimus 603 CO Not Allowed for HTS 604 HTS Not Allowed for Entry Type 605 SP Code Cannot Be Used - Not in Effect 606 SP Code Cannot Be Used - Expired 607 Unknown CO Not Allowed for SP Claim 608 CO Not Allowed for SP Claim 609 Single HTS Not Allowed; Second HTS Reqd 610 HTS Does Not Allow an SP Claim 611 HTS Requires $0 Value of Goods 612 CE Not Allowed for SP Claim 613 HTS Relationship/Sequence Mismatch 614 HTS Not Eligible for SP Claim 615 CE Not Allowed for HTS 616 Article Not Eligible for SP Claim 617 CO Not Allowed for GSP Claim/HTS 618 CO/CE GSP Mismatch 619 HTS Does Not Allow a GSP Claim 620 HST Not Allowed for Article Classification

Document Image System Pilot DIS reduces paperwork costs and allows for faster, more efficient cargo review and release by CBP and PGAs. Submitted documents are made available for review by CBP and Partner Government Agencies (PGAs) via the DIS application. On July 23, 2013, Federal Register Notice was published on pilot expansion.

DIS Document Transmission Mechanisms Electronic Data Interchange (EDI) - The preferred mechanism of document transmission in DIS is via an XML payload transmitted to CBP via any one of three EDI technical mechanisms: Secure FTP, Secure Web Services, or Existing ABI MQ mechanism Note: EDI is of greater value in a fully automated scenario for technically advanced, high volume trade partners since it is supported by a modern, robust, guaranteed delivery and processing infrastructure Email - DIS allows certain documents to be transmitted via Email to support Export Manifest and Simplified Entry. Only certain pre-approved documents can be submitted as attachments on emails Associated meta data is sent in Subject line and Body of email Note: Email is more suitable in scenarios that are ‘Quick-Easy-And-Interim’; Semi-Automated, and Low-Volume (total email size including all attachments may not exceed 10MB).

2013 DIS Enhancements PGA documents added to DIS for EDI transmission: Center for Disease Control and Prevention (CDC) Form 0728 Permit to Import or Transfer Etiological Agents or Vectors of Human Disease CDC Importation Permission Letter CDC Permit Exemption Letter Defense Contract Management Agency (DCMA) Certificate of Duty Free Entry Food Safety and Inspection Service (FSIS) 9010-1 Exported Goods Returning FSIS 9060-5 Export Certificate FSIS 9540-4 Importation of Inedible Meat Product FSIS 9540-5 Importation of Samples NOTE: Only documents announced via a Federal Register Notice can be transmitted via EDI.

2013 DIS Enhancements Allow the following to be submitted at time of manifest (submission of the bill of lading): APHIS Notice of Arrival 368 APHIS Import Permit APHIS Transit Permit APHIS Pre-Clearance 203 Phytosanitary Certificates Ingredients List Commercial Invoice Packing List Allow SE documents to be transmitted via EDI to support SE filings Reduced required meta-data NOTE: Only documents announced via a Federal Register Notice can be transmitted via EDI.

Document Image System Access PGA participants may contact ITDS for Participating Government Agency on boarding procedures or view the procedures on the ITDS secure website. Trade participants may contact their local Client Representatives Branch for trade on boarding procedures for transmitting documents to DIS via EDI. Ocean Carriers interested in participating in the DIS Export Manifest pilot should contact Adi Abel at Adi.Abel@cbp.dhs.gov.

U. S. Customs & Border Protection ACE UPDATE WEBINAR Cargo Release/Simplified Entry, PGA Message Set, AES Re-Engineering August 8, 2013 Vincent Annunziato, Director, Cargo Control and Release ACE Business Office U.S. Customs and Border Protection 18

SPRINT TEAM STATUS CARGO RELEASE/SIMPLIFIED ENTRY Steven Lubel CBP is planning to establish ACE as the single processing platform for all export manifest and commodity transactions. This is in keeping with the President‘s National Export Initiative (NEI) and the Export Control Reform Initiative. Current plans call for the development of an automated export manifest system for all modes. This will involve coordination with the Bureau of the Census and other PGAs involved in export licensing and commodity transactions. Ocean outgoing manifest via DIS 19

Cargo Release/Simplified Entry Split Shipments Hold All capability Immediate Delivery Partial Shipments Partials without in-Bond – Deployment scheduled for October 5, 2013 Partials with in-Bond – Deployment scheduled for January 2014 In-Bond Completed testing and scheduled for October 5, 2013 deployment CBP is planning to establish ACE as the single processing platform for all export manifest and commodity transactions. This is in keeping with the President‘s National Export Initiative (NEI) and the Export Control Reform Initiative. Current plans call for the development of an automated export manifest system for all modes. This will involve coordination with the Bureau of the Census and other PGAs involved in export licensing and commodity transactions. Ocean outgoing manifest via DIS 20

Cargo Release/Simplified Entry – cont’d Auto Corrections & Cancellations Functionality Developed Security Roles Being Developed User Roles Port Security Capability GUI Upgrades to Simplified Entry CBP Screens Main Screens on new Java platform. Complete so as to accommodate the new functionalities, but GUI will still not be at full-objective end-state. CBP is planning to establish ACE as the single processing platform for all export manifest and commodity transactions. This is in keeping with the President‘s National Export Initiative (NEI) and the Export Control Reform Initiative. Current plans call for the development of an automated export manifest system for all modes. This will involve coordination with the Bureau of the Census and other PGAs involved in export licensing and commodity transactions. Ocean outgoing manifest via DIS 21

Cargo Release/Simplified Entry – cont’d Upcoming Work for January Deployment Ocean/Rail Migration for Simplified Entry Carry over work for screen upgrades to comparison tool and spit shipment functionality (October 5th Deployment) Cancellation Process from Entry Summary to Simplified Entry Cargo Release Data Build Out. CBP is planning to establish ACE as the single processing platform for all export manifest and commodity transactions. This is in keeping with the President‘s National Export Initiative (NEI) and the Export Control Reform Initiative. Current plans call for the development of an automated export manifest system for all modes. This will involve coordination with the Bureau of the Census and other PGAs involved in export licensing and commodity transactions. Ocean outgoing manifest via DIS 22

SPRINT TEAM STATUS PGA MESSAGE SET Shailesh Sardesai CBP is planning to establish ACE as the single processing platform for all export manifest and commodity transactions. This is in keeping with the President‘s National Export Initiative (NEI) and the Export Control Reform Initiative. Current plans call for the development of an automated export manifest system for all modes. This will involve coordination with the Bureau of the Census and other PGAs involved in export licensing and commodity transactions. Ocean outgoing manifest via DIS 23

PGA Message Set Environmental Protection Agency (EPA) Ozone Depleting Substances Pilot - AE (Entry Summary) EPA Vehicles and Engines Pilot – AE (Entry Summary) Food Safety Inspection Service (FSIS) Pilot – Meat and Poultry Products – AE (Entry Summary) Streamline input by CBP Agriculture Specialists to the Animal Plant Health Inspection Service (APHIS) system GUI delivery in Java – Hot List/PGA Screens NEW FUNCTIONALITY Single Accept Message CBP is planning to establish ACE as the single processing platform for all export manifest and commodity transactions. This is in keeping with the President‘s National Export Initiative (NEI) and the Export Control Reform Initiative. Current plans call for the development of an automated export manifest system for all modes. This will involve coordination with the Bureau of the Census and other PGAs involved in export licensing and commodity transactions. Ocean outgoing manifest via DIS 24

PGA Message Set – Cont’d Upcoming Work for January 2014 Deployment Initiate FDA onboarding for Interoperability Web Services (IWS) integration Enhancements to PG UI for searches and PGA interactions and views (Document Image System (DIS) and PGA GUIs) Enhancements and Validations in PGA Message Set Spec (PG00, refinement of records) CBP (APTL) and USDA (APHIS) Emergency Action Notifications (EAN) functionality Enhancements to Integrated Trade responses and Message Monitor Additional Business Rule enforcements, integration with PGAs CBP is planning to establish ACE as the single processing platform for all export manifest and commodity transactions. This is in keeping with the President‘s National Export Initiative (NEI) and the Export Control Reform Initiative. Current plans call for the development of an automated export manifest system for all modes. This will involve coordination with the Bureau of the Census and other PGAs involved in export licensing and commodity transactions. Ocean outgoing manifest via DIS 25

SPRINT TEAM STATUS AES RE-ENGINEEING Bill Delansky CBP is planning to establish ACE as the single processing platform for all export manifest and commodity transactions. This is in keeping with the President‘s National Export Initiative (NEI) and the Export Control Reform Initiative. Current plans call for the development of an automated export manifest system for all modes. This will involve coordination with the Bureau of the Census and other PGAs involved in export licensing and commodity transactions. Ocean outgoing manifest via DIS 26

AES Re-Engineering On Going Development of Product Backlog: ANSI X12 data mapping Option 4 processing Hold Processing Census Regulation Enhancements/Advanced Export Information (AEI) BIS Enhancements in support of National Export Initiative User Preference Settings Targeting UI Work Findings (CERTS) Entity summary screens Incorporate Ocean Export Manifest Pilot for 4 active Carriers Search Functionality Document Image System Link Trade Profiles HTS/Tariff Maintenance CBP is planning to establish ACE as the single processing platform for all export manifest and commodity transactions. This is in keeping with the President‘s National Export Initiative (NEI) and the Export Control Reform Initiative. Current plans call for the development of an automated export manifest system for all modes. This will involve coordination with the Bureau of the Census and other PGAs involved in export licensing and commodity transactions. Ocean outgoing manifest via DIS 27

AES Re-Engineering – cont’d Upcoming Work for Next Increments: Support User Acceptance Testing Deployment Activity Support Development of Export Air Manifest PGA Export Requirement Development Environmental Protection Agency (EPA) Bureau of Industry & Security (BIS) National Marine Fisheries Service (NMFS) Additional export manifest development for ocean, rail, and truck Export Reports CBP is planning to establish ACE as the single processing platform for all export manifest and commodity transactions. This is in keeping with the President‘s National Export Initiative (NEI) and the Export Control Reform Initiative. Current plans call for the development of an automated export manifest system for all modes. This will involve coordination with the Bureau of the Census and other PGAs involved in export licensing and commodity transactions. Ocean outgoing manifest via DIS 28