IT Connectivity, Single Window, TFA, and Public-Private Partnership: The US Experience

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1 Louritha Green, U.S. Customs and Border Protection WCO 2016 IT Conference & Exhibition IT Connectivity, Single Window, TFA, and Public-Private Partnership: The US Experience 1 to 3 June 2016, Dakar - Senegal

2 Agenda TFA Overview TFA Articles Relevant to IT Connectivity and Single Window US Implementation of IT Connectivity-related TFA provisions o Single Window o Case Study: ebonds The future of US implementation/postimplementation Questions 2

WTO Trade Facilitation Agreement (TFA) Overview Adopted on 27 November 2014 Three articles consisting of 23 sections US notified WTO of acceptance on 23

5 Other measures for transparency etc. Art.6 Fee, Charges and penalty Art.7 Release and Clearance of goods Art.8 Border Agency Cooperation Art.

12 Customs cooperation Section II Special and Differential Treatment for Developing Countries and Least Developed Countries o Rules about Categories A, B

3 WTO Trade Facilitation Agreement (TFA) Overview Adopted on 27 November 2014 Three articles consisting of 23 sections US notified WTO of acceptance on 23 January 2015 Section I Art.1 Publication and availability of information Art.2 Consultations Art.3 Advance ruling Art.4 Appeal/Review procedures Art.5 Other measures for transparency etc. Art.6 Fee, Charges and penalty Art.7 Release and Clearance of goods Art.8 Border Agency Cooperation Art.9 Movement of goods intended for import Art.10 Formalities Art.11 Transit Art.12 Customs cooperation Section II Special and Differential Treatment for Developing Countries and Least Developed Countries o Rules about Categories A, B and C o Assistance for Capacity Building o Information to be submitted to the TF Committee Section III Institutional Arrangements and Final Provisions o Committee on Trade Facilitation o National Committee on Trade Facilitation o Final provisions 3

TFA Articles Relevant to IT Connectivity and Single Window Of the 23 articles, at least 8 relate to IT

3 Advance ruling Art.4 Appeal/Review procedures Art.5 Other measures for transparency etc. Art.6 Fee, Charges and penalty Art.

9 Movement of goods intended for import Art.10 Formalities Art.11 Transit Art.

Developed Countries o Rules about Categories A, B and C o Assistance for Capacity Building o Information to

4 TFA Articles Relevant to IT Connectivity and Single Window Of the 23 articles, at least 8 relate to IT connectivity: Section I Art.1 Publication and availability of information Art.2 Consultations Art.3 Advance ruling Art.4 Appeal/Review procedures Art.5 Other measures for transparency etc. Art.6 Fee, Charges and penalty Art.7 Release and Clearance of goods Art.8 Border Agency Cooperation Art.9 Movement of goods intended for import Art.10 Formalities Art.11 Transit Art.12 Customs cooperation Section II Special and Differential Treatment for Developing Countries and Least Developed Countries o Rules about Categories A, B and C o Assistance for Capacity Building o Information to be submitted to the TF Committee Section III Institutional Arrangements and Final Provisions o Committee on Trade Facilitation o National Committee on Trade Facilitation o Final provisions 4

5 Article 10.4: Single Window Single Window is expressly mentioned in TFA Article 10.4 Specific provisions are: 4.1 Members shall endeavour to establish or maintain a single window, enabling traders to submit documentation and/or data requirements for importation, exportation, or transit of goods through a single entry point to the participating authorities or agencies. After the examination by the participating authorities or agencies of the documentation and/or data, the results shall be notified to the applicants through the single window in a timely manner. 4.2 In cases where documentation and/or data requirements have already been received through the single window, the same documentation and/or data requirements shall not be requested by participating authorities or agencies except in urgent circumstances and other limited exceptions which are made public. 4.3 Members shall notify the Committee of the details of operation of the single window. 4.4 Members shall, to the extent possible and practicable, use information technology to support the single window. The TFA does not require that the US (or any WTO Member) develop a Single Window. However, US law does require the completion of its Single Window (ACE) by 30 December

6 Other Provisions Related to Single Window Although Single Window is not specifically mentioned in the following, Single Window could be beneficial in implementing the following provisions: Article Each Member shall, as appropriate, provide for advance lodging of documents in electronic format for pre-arrival processing of such documents. Article 8.1 Article 3.1 Article 23.2 Each Member shall ensure that its authorities and agencies responsible for border controls and procedures dealing with the importation, exportation, and transit of goods cooperate with one another and coordinate their activities in order to facilitate trade. Members are encouraged to use relevant international standards or parts thereof as a basis for their import, export, or transit formalities and procedures, except as otherwise provided for in this Agreement. Each Member shall establish and/or maintain a national committee on trade facilitation or designate an existing mechanism to facilitate both domestic coordination and implementation of the provisions of this Agreement. 6

7 The U.S. Single Window Automated Commercial Environment (ACE) 7

8 Legal Authority Underlying ACE Legislative Backing & Funding: Security and Accountability For Every Port Act of 2006 (SAFE) Trade Facilitation and Trade Enforcement Act of 2015 Regulatory Support (Article 2): Code of Federal Regulations (CFR) Administered by Executive Departments & Agencies (i.e., United States Customs & Border Protection) Published in the Federal Register Notice of Proposed Rulemaking Period for Comments & Participation Announcement of Adoption & Final Ruling Trade Facilitation Agreement (TFA) 8

9 9 2

10 Article 10.4: U.S. Single Window Environment 10

11 Stakeholders Stakeholder Engagement Customs & Private Sector Partnerships Customs & Public Sector Partnerships Communications Channels Establish & Maintain Communications Channels with Stakeholders for Transparency 11

12 Articles 2 & 23: Consultations/NCTF 12

13 Article 1: ACE Communications Channels 13

14 Publicly available Information for ACE (Article 1) 14

15 ACE: The Future State ACE is on track to meet the Executive Order end of year deadline with the delivery of all core trade processing capabilities in ACE. Following the deployment of core trade processing capabilities in ACE in 2016, CBP will continue to enhance ACE capabilities in an operations and maintenance mode. 15

16 ACE ebond A Case Study in Application of Approaches 16

TFA Articles Relevant to Implementation of ACE ebond Initiative Seven TFA articles are relevant to the implementation of ACE ebond. All are contained in Section I of the agreement. Section I Art.

17 TFA Articles Relevant to Implementation of ACE ebond Initiative Seven TFA articles are relevant to the implementation of ACE ebond. All are contained in Section I of the agreement. Section I Art.1 Publication and availability of information Art.2 Consultations Art.7 Release and Clearance of goods Art.8 Border Agency Cooperation Art.9 Movement of goods intended for import Art.10 Formalities connected with importation, exportation and transit Art.11 Freedom of Transit 17

18 U.S. Customs Bonds (Articles 7 & 9) A bond is a contract that is given to insure the performance of an obligation or obligations imposed by law or regulation. A bond is like an insurance policy that guarantees payment by the insuring party to U.S. Customs and Border Protection (CBP) if a required act is not performed by the insured. All parties that import merchandise into the United States for commercial purposes or transport imported merchandise through the United States must have a customs bond or present cash in lieu of a bond. CBP has the authority to require bonds under title 19, United States Code, section Most Customs bonds are taken under that authority. 18

19 U.S. Customs Bonds (Articles 7, 9, & 11) Bonds have a number of uses in CBP. Two most commonly used bonds: Importer Bond: Allows importers to take possession of their goods before all monies owed to CBP are paid. (Article 7) Custodial Merchandise Bond: Allows a carrier to move goods under bond from one place to another before those goods are actually entered for consumption with duties paid. (Articles 9 & 11) CBP has two primary bond types: Continuous Bonds: Secure multiple shipments in a given year and used by trade participants with large volume of imports. It is a one year term that is automatically renewed annually. Single Transaction Bonds (STB): Secure individual shipments or used as additional collateral in conjunction with continuous bonds. It only secures the transaction for which it is written. 19

20 Customs Bond Process Prior to ebond Continuous Bonds Partially automated process. Trade ed or faxed forms required for bond processing to the CBP Revenue Division Bond Team (RDBT) in Indianapolis. RDBT approval / rejected and input same information into two systems. Frequent keying errors resulted in delays. Three to five business days for approval and input of a continuous bond. Single Transaction Bonds (STB) Non-automated paper process and no central repository. Cargo was regularly released into the commerce with no bond securing that cargo. Collection efforts were hampered by the Agency s failure to reproduce single transaction bond documents used to secure transactions. 20

21 IT Connectivity: Support for Centralization & Automation In 2011, a Department of Homeland Security (DHS) Office of Inspector General (OIG) report cited the following issues with manual STB process: Inaccurate and incomplete bonds. Deficiencies in bond retention. Insufficient insight into the number and value of STBs. Risk for CBP in cargo being released prior to execution of a bond. Estimated $8B of $12B in STBs accepted by CBP in FY09 contained errors with possibility for non-collection. Projected potential of additional $1.5B could have been required in STBs during FY09. OIG recommended centralization and automation to resolve these issues; improving revenue collection and reducing the agency s exposure. 21

22 ebond Integration Within ACE (Articles 7, 8, 9, 10 &11) ebond is an application within ACE that centralizes and automates the Customs Bond process. (Articles & 10.1) All Customs Bonds are stored and maintained in the application. (Articles & 9) Other ACE applications interface with ebond to validate various downstream processes where a bond is required. (Articles & 9) ebond notifies parties involved with the bond at key stages of processing. (Article 7.1.2) All ACE Surety accounts are based on the U.S. Department of Treasury s Listing of Approved Sureties, Dept. Circular 570. Coordination ensures accuracy and. (Articles 8.1 & 11) 22

23 ebond Application Create & Update (Article 7) Bonds are created and updated by the Trade and by CBP Users. Trade via Electronic Data Interchange (EDI). Surety & Surety Filer Agents are authorized to submit bonds electronically. They are the party obligated for payment in the event of non-payment by the bond principal (importer). CBP Users via User Interface (UI). Office of Administration (OA) Revenue Division Bond Team (RDBT) are only users provisioned to create and update bonds. All CBP Users provisioned to view bonds. 23

24 ebond Application: Notifications (Articles 7 & 11) Notification framework expedites release of goods with real-time communications. Notifications are sent via EDI whenever an action is taken on the bond. Actions include: Bond creation or an update. Bond usage by another application. Notifications are sent to the Surety / Surety Filer Agents and Secondary Notify Parties (SNPs) such as Brokers based on the type of action taken. SNPs are associated to each bond by the Surety / Surety Agent or by an OA user. 24

25 Consultations/Outreach for ebond (Article 2 & 8) ebond Team Port visits in 2013 prior to project start date. Working Group sessions with Trade, CBP, & Dept. of Treasury Held in December 2013 and April, June, and November of Trade Support Network s (TSN) ebond and Surety Account Subcommittees, as well as the COAC Bond Working Group Working sessions with the OA. Subject Matter Experts assigned to ebond Agile Team during Development & Implementation. Work conducted during previous analysis and meetings with Trade. 25

26 Benefits Realized by CBP CBP has realized critical improvements to support Agency goals such as: Increased revenue collection by reducing write-offs and delinquencies. Increased oversight and consistent application of policies and procedures. Reduced time and effort required to locate and identify STBs. Resource realignment with mission needs creating specialized areas leading to faster bond processing. Reduced turnover and training needs. 26

27 Benefits Realized by Trade Trade partners and other key stakeholders have already realized significant strategic and financial benefits such as: Reduction in transaction costs, transmission delays, and the number of clerical errors normally associated with a paperbased submission process. Notification of the acceptance of their compliant bond submissions within seconds of transmission to CBP, thereby facilitating the flow of cargo. Able to establish greater controls over their bond submission processes. 27

28 Publicly available Information for ebond (Article 1) 28

29 ebond: The Future State The ebond application will continue to evolve to further improve revenue collection, reduce the agency s exposure, and to facilitate legitimate trade. Future ebond enhancements to include: o o o Integration with other applications beyond Import Manifest, Cargo Release, and Entry Summary. Additional real-time electronic notifications to the Trade on bond utilization and sufficiency. Increased bond monitoring capabilities enabling more analytical administration. 29

30 QUESTIONS? 30

DEPARTMENT OF HOMELAND SECURITY. U.S. Customs and Border Protection. Announcement of ebond Test

DEPARTMENT OF HOMELAND SECURITY. U.S. Customs and Border Protection. Announcement of ebond Test This document is scheduled to be published in the Federal Register on 11/28/2014 and available online at http://federalregister.gov/a/2014-28146, and on FDsys.gov 9111-14 ADM-9-03 OT:RR:RD:TC H259009 SKK