Liquidated Changes

Customs has a storage problem, and how it is adapting will dramatically affect importers who file paper entries.

The change involves Customs’ elimination of paper-based courtesy notices of liquidation (CBP Form 4333-A), as announced in the Aug. 17 Federal Register. The notices, which Customs says cost $3 million-plus a year to print and mail, advise importers when individual entries are liquidated or finalized.

Because of storage size limitations, Customs will store data in the Automated Commercial Environment about entries filed in the current fiscal year and the previous four years. Older data can be obtained through Automated Broker Interface queries or Importer Trade Activity reports Customs will provide. Importer Self-Assessment members will not be charged. Other importers will face a cost to receive the report, currently assessed per IRS number per year.

So where should importers go to get their liquidation data? Customs wants every importer to sign up for an ACE Secure Data Portal Account to obtain the information (see http://www.cbp.gov/xp/cgov/trade/automated/modernization/ace_app_info/ for details). The deadline to do so is Sept. 30, the date the proposal takes effect. If you file paper entries and don’t use ABI, you will still receive your liquidation notices.

There are several factors to consider regarding what this change means for importers. First, some 95 percent of all entries are filed through the ABI, which is part of the Automated Cargo System, the old computer system. ACE is the long-promised new computer system that is very late in being delivered, and with far fewer features than originally promised.

The initial e-manifest drop, known as M-1 and tying sea and rail manifest data to release data, was delayed several times before activation was set to occur this month. ACE can’t be fully utilized without this manifest data in the system, so Customs has put a lot into its development and implementation.

Second, it was only a matter of time (and cost) before Customs started saying it had to turn ACS off because the agency can’t support both systems. Commissioner Alan Bersin made that clear in recent comments to the trade community in Los Angeles. In a wise move, however, the agency won’t decide unilaterally when that will occur.

Instead, Bersin said the timing of ACS’s demise would be made in concert with the trade community. Bear in mind, however, that the commissioner was a recess appointment, and if the Senate doesn’t affirm him, he will leave office when Congress ends its term in December. Let’s hope he’s confirmed and, if not, that his successor is as level-headed about where the agency needs to go.

Third, these courtesy notices of liquidation aren’t the official or legal notice Customs issues when a given entry is liquidated. The legal notice, the one required by statute, is the bulletin notice printed and posted at each customhouse (see 19 C.F.R. 159.9).

How much longer will that practice continue? We hear the Port of Los Angeles-Long Beach will run a test from Oct. 5 through Dec. 2, saving the official liquidation data to a computer that will be made available for access and viewing at the customhouse. Copies for a specific entry would be available only by asking a Customs staffer. Access to the computer and requests for copies will be provided free of charge, but how much longer will it be before Customs proposes to change the law and eliminate these bulletin notices altogether?

The Los Angeles-Long Beach proposal isn’t clear when it comes to whether the printed bulletin notices will continue to be published and posted. Although likely, considering the law hasn’t changed, the real concern is the inconsistent data currently available; data in ACE regarding entry liquidation doesn’t always match that in ACS. Which one is official? Correct?

ACE currently doesn’t contain history about an entry, so if an entry was scheduled to liquidate but subsequently suspended, that information — critical, if there’s a protest — isn’t available. Few people still go to the customhouse to check liquidation data, so accuracy of data is more critical than ever. If you don’t have an accurate liquidation date, you may lose your right to protest.

What is Customs doing to upgrade the quality of the liquidation data it provides in ACE? Because it’s generally the lawyers who need this data when challenging Customs’ determination, it’s been suggested ACE should include a lawyers’ portal. The funding for such a feature is highly unlikely, however, especially because importers are free to give their lawyers and other designated individuals access to their ACE accounts.

Another solution is for importers to rely on their brokers for the data. Because the proposal to eliminate courtesy notices isn’t new, however, this option’s appeal hasn’t improved over time. Such an approach raises potential liability issues for brokers, including missing an entry or reporting the wrong data, and it fails to address what happens when the parties divorce acrimoniously.

Why not create an ACE portal where all the liquidation data is posted? Access could then be controlled by a combination of IRS number and password. If we are truly in the age of computers, let’s rely on them instead of patchwork solutions.

Susan Kohn Ross is an international trade attorney with Mitchell Silberberg & Knupp in Los Angeles. Contact her at skr@msk.com.
 

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