Update on the Simplified Entry, Summary & Payment Draft Models Presented at COAC

(A Simplified Entry, Summary, & Financial Workgroup², has been tasked to create models for streamlined entry, summary, and financial processes by pursuing opportunities to: (1) reduce the number of filings for low-risk accounts, (2) resolve entry issues before arrival to speed release, (3) allow entry/summary data transmission and submission to follow an importer's business model, and (4) allow the periodic settlement of consolidated monies due.

These efforts are part of a larger process that U.S. Customs and Border Protection started in summer 2010 at the direction of CBP Commissioner Bersin to streamline redundant data and processes.)

Overview of Draft Models for Simplified Entry and Summary & Financial Activities

The workgroup has presented two draft proposals for the simplified processes, which separate release from summary and financial transmissions. The draft Simplified Entry Model would link security and admissibility to the release of shipments and would reduce the number of data elements required for release to about 10-14. Reduced scrutiny of participants would better allocate scarce governmental resources on riskier shipments. This model would standardize filing requirements across industries, make processes mode-specific, and various other changes.

The draft Simplified Summary & Financial Model would move to a management by account structure, linking the summary and financial submissions from importers and decoupling both from release transactions. This model would provide importers with the flexibility to select both the summary and payment period based on their specific financial and inventory needs. (See ITT’s Online Archives or 08/15/11 news, 11081505, for detailed BP summary of these draft models.)

Eligibility, Pilot Processes, and PSCs Discussed at August COAC Meeting

At the COAC meeting, CBP elaborated on their draft proposals, and provided some new information, including:

CEE and AE as models for pilot. If the draft proposals are approved by CBP for further development, CBP said that it was considering testing the proposed simplified processes in a pilot environment like the Centers for Excellence and Expertise (CEE) and the Account Executive (AE) pilots³.

Could eliminate need for PSC process. CBP stated that one consequence of providing importers with the flexibility to select their summary and payment periods could be the elimination of Post Summary Corrections (PSCs), as businesses would be allowed to make changes to their data according to their business cycles and submit data to CBP when changes to data had settled.

Voluntary participation. CBP anticipates that the simplified processes would be a voluntary program, but that it would work so well that most of the trade community would want to use it for the bulk of their shipments. CBP has not yet made any assumptions of who would be able to participate in the simplified processes. However, CBP stated it is most likely to be used for low-risk shipments because of the fact that less data transmission is required and a longer timeframe is allowed for the trade to provide CBP with final data sets and financial settlement. CBP noted that while the simplified processes are more likely to be open for low-risk shipments, this does not necessarily mean the processes will be limited to trusted partners.

(See ITT's Online Archives or 08/22/11 news, 11082214, for BP overview of the August 18 COAC meeting where the draft models were presented.)

July Webinar Revealed Issues Workgroup Had Been Considering for Proposal

On July 12, 2011, CBP held a webinar on its progress towards simplifying entry, summary, and financial processes for imports. While this webinar predates the workgroup’s draft proposals and its discussion may not be reflected in them, the webinar reveals some of the issues the workgroup considered while developing the draft proposals, including:

Periodic Monthly Statement as partial model. CBP stated that there was a good possibility that a monthly settlement of obligations would be used, as its current Periodic Monthly Statement (PMS) system is a relatively good model for resolving the financial issues associated with entry transactions. However, CBP still needs to know certain release information on an entry-by-entry basis, such as information on what is in a particular container or shipment coming in by air or on a truckload for security clearance and cargo release purposes.

Separating release from payment. CBP stated that it recognized the release decision process as very different process from the settlement of financial duties, taxes, and fees. While these processes are currently very linked; separating them could provide opportunities for greater efficiency. The workgroup is looking at:

• Reducing filings before release;

• Moving to a true account management-based process for data submission and the settlement of duties taxes and fees; and

• Allowing the importer to be responsible for reporting IRS tax return-like statements to CBP. (CBP noted that such a change would raise some legal questions, such as how it would impact interest, the date of entry, bonds, etc., but that the workgroup would try to find solutions to these issues by their September deadlines.)

Canada’s CSA program. CBP and the trade have looked at a number of options to try to reduce the costs associated with how data and money are submitted to CBP. The options range from a hybrid of what Canada uses in their Customs Self-Assessment (CSA) program⁴ to going back to an old concept that was contained in the Customs Modernization Act called the Importer Activity Summary Statement.

While the workgroup liked some of the elements of the CSA, a major difference is that the U.S. was still of the view that it needs transaction information at the front end of the release process -- CBP does not want to receive less data leading into a release decision.

CBP encouraged comments, future webinars. CBP stated that the workgroup requires a lot of feedback from trade on their business cycles. If the trade has further ideas of different entry and financial processes that are streamlined, efficient, and consistent with business practices, it should share them with the workgroup. CBP will be holding a series of free webinars on these processes and other CBP trade policy. CBP encouraged the trade to submit questions so that future webinars could address areas of interest to the trade.

(See ITT’s Online Archives or 08/17/11 and 08/19/11 news, 11081701 and 11081910, for BP summaries of CBP announcing and opening registration for its next webinar, which will be held September 1, 2011 on ACE Post Summary Corrections.)

¹The Departmental Advisory Committee on Commercial Operations of U.S. Customs and Border Protection and Related Homeland Security Functions (COAC).

²Workgroup participants are comprised of members from both government and industry, and include: the American Association of Exporters and Importers (AAEI), Business Alliance for Customs Modernization (BACM), Commercial Operation Advisory Committee (COAC), the International Trade Surety Association (ITSA), National Customs Brokers and Forwarders Association of America (NCBFAA), and National Retail Federation (NRF).

³CBP officials noted that while the CEE and the AE pilots dealt with the operational processing of importation, the simplified entry and financial processes would deal with data management. The workgroup aims to reduce the number of data transmissions or somehow structure the transmissions so that they are more efficient in order to be more cost saving for the industry.

⁴Under CSA, releases are effective with just three data elements. In some cases, the importer later transmits information (on what is equivalent to CBP's entry summary) according to its own business cycle. In most cases, this information is transmitted after about 8 to 10 business days and at some later point, the importer settles up with the government financially.

CBP Contact - Brenda Smith brenda.brockman.smith@dhs.gov

View the recorded webinar here.

Webinar presentation is available here.

COAC presentation is available here.