FX International Payments
By Megan Doyle
Officially launched in April 2018 after a few years of “beta” testing use, ACE customs is an outgrowth of the increasing rate of digitalization across the globe, and an increasing desire for efficient digital trading systems. As a response, the international trade community evolved the concept of a digital, automated “single window” environment that lets import-export businesses share required documentation with multiple agencies and jurisdictions. ACE customs is among such technological advancements, which are working to cut processing time and reduce courier fees and other trade costs, thus enabling global trade to continue rising.
This article describes ACE, how it effects small- and medium-sized businesses, and touches on the recent launch of a similar system, the Air Cargo Advance Screening (ACAS) program.
According to the World Customs Organization, the single window concept is a “cross border, ‘intelligent’ facility that allows parties involved in trade and transport to lodge standardized information, mainly electronic, with a single entry point to fulfill all import, export, and transit related regulatory requirements.”2 In other words, the ACE system is the U.S.’s primary single window system that allows digital two-way communication between the global trade community and relevant government organizations and agencies, such as CBP.
International import-export businesses can use ACE to electronically submit data – such as trade permits, certificates of origin, and trade invoices – to CBP or other relevant government agencies. They can then check the status of trade documents via the ACE portal, and the government can determine admissibility of the goods.3 Ultimately, the paperless nature of the ACE customs platform can help CBP make quicker decisions about trade. This can also help importers and exporters more efficiently comply with U.S. laws and regulations while keeping track of the trade process.4,5
Notably, a primary aspect of the ACE customs system is its role in managing risks – such as targeting potentially illicit goods – when processing imports and exports.6 ACE provides CBP with more data to assist in accurate identification of illicit or dangerous shipments.7 Otherwise, ACE automates and consolidates border processing by providing a centralized means for businesses to connect electronically to CBP.8 Overall, the single window concept of ACE is intended to expedite trade of legitimate shipments while impeding illegal goods or those that require detailed scrutiny.
Before ACE, import-export businesses often submitted required trade documents to multiple agencies, usually on paper. A single window system, however, makes it possible to contact multiple agencies through one platform, instead of individually. The introduction of the ACE customs system has led to the automation of 269 import-export related trade forms, helping SMEs and midsized businesses save time and money.9,10 In fact, digital submissions of export licenses through ACE has led to savings of $1.5 million annually, according to CBP.11
The digital nature of the platform also enables near-real-time decision making for each party in the trade process, as cargo and export data is updated nightly.12 With real-time data, businesses can know exactly what time shipments will reach a border and can therefore more accurately send drivers to pick up goods. Thus far, CBP says, this aspect of ACE customs has led to a “33 percent reduction in wait times at land border truck processing ports.”13 Experts say this reduction in wait time has reduced transportation and accommodation costs during layovers, and can also lead to greater customer satisfaction when goods are delivered quicker.14
SMEs and midsized businesses can also save money and time by using ACE customs’ periodic monthly payments program. Instead of paying taxes and duties for each trade transaction, these fees can be compiled periodically into one lump monthly bill to reduce processing time and streamline shipment flow.15 CBP says participants in the periodic monthly statement program have saved a combined total of $9 million annually.16
The U.S. government introduced the Air Cargo Advance Screening (ACAS) program in June 2018. Like ACE, ACAS aims to automate processes to enhance security while expediting international trade. Though not part of the U.S.’s single window policy, ACAS aims to help CBP and the Transportation Security Administration (TSA) use required trade information to increase trade efficiency. ACAS requires “the submission of advanced air cargo information on shipments arriving in the United States from a foreign location” as a measure of enhanced screening and identification of potential high-risk cargo.17
Prior to ACAS, submitting advanced air cargo information was a voluntary process in which many airlines already participated. Since ACAS began operating, it has become mandatory to supply advanced air cargo information. Carriers must now submit required air cargo data to CBP as soon as possible during the transport process.18 It may be worth noting that incorrect or untimely ACAS data submissions are subject to fines or fees.
The Automated Commercial Environment (ACE) is a U.S. government platform that acts as a “single window” allowing two-way communication between trade partners and government regulatory agencies. A push away from paper-based procedures, the ACE customs system is a step toward a more efficient, streamlined process that can make international import-export business easier for both traders and government agencies. Similarly, ACAS aims to use automation to enhance efficiency for air carriers while simultaneously enhancing CBP and TSA’s real-time security measures.
Megan Doyle is a business technology writer and researcher based in Wantagh, NY, whose work focuses primarily on financial services technology.
1. “International Trade,” Our World in Data; https://ourworldindata.org/international-trade
2. “Single Window Information Store,” World Customs Organization; http://www.wcoomd.org/en/topics/facilitation/activities-and-programmes/single-window/single-window.aspx
3. “ACE and Automated Systems,” U.S. Customs and Border Protection; https://www.cbp.gov/trade/automated
5. The ACE Basics, U.S. Customs and Border Protection; https://www.cbp.gov/sites/default/files/assets/documents/2017-Nov/ACE%20Basics%20-%20November%202017_0.pdf
6. ACEopedia, U.S. Customs and Border Protection; https://www.cbp.gov/sites/default/files/assets/documents/2017-Sep/ACEopedia%20September%202017.pdf
9. Realizing the Single Window, U.S. Customs and Border Protection; https://www.cbp.gov/sites/default/files/assets/documents/2017-Aug/ACE%20Accomplishments%20Infographic.pdf
10. “What is US Single Window?,” Global E-Trade Services; https://globaletrade.services/blog/2016/9/20/what-is-sw-single-window-us
11. Realizing the Single Window, U.S. Customs and Border Protection; https://www.cbp.gov/sites/default/files/assets/documents/2017-Aug/ACE%20Accomplishments%20Infographic.pdf
12. ACEopedia, U.S. Customs and Border Protection; https://www.cbp.gov/sites/default/files/assets/documents/2017-Sep/ACEopedia%20September%202017.pdf
13. Realizing the Single Window, U.S. Customs and Border Protection; https://www.cbp.gov/sites/default/files/assets/documents/2017-Aug/ACE%20Accomplishments%20Infographic.pdf
14. “Benefits Enterprises Gain from Automated Commercial Environment US,” Global E-Trade Services; https://globaletrade.services/blog/2016/10/3/benefits-that-enterprises-gain-from-automated-commercial-environment-us
16. Realizing the Single Window, U.S. Customs and Border Protection; https://www.cbp.gov/sites/default/files/assets/documents/2017-Aug/ACE%20Accomplishments%20Infographic.pdf
17. “Air Cargo Advance Screening (ACAS),” U.S. Customs and Border Protection; https://www.cbp.gov/border-security/ports-entry/cargo-security/acas