Customs Modernization

  The U.S. Customs Service is embarking on a modernization effort—the Customs Modernization Program—to improve Customs trade, enforcement, and administrative operations. The Customs Modernization Program will bring an enterprise approach to the planning, definition, development, and implementation of new business processes and the infrastructure that supports these processes.

  The following material from the U.S. Customs Service website explains what Modernization includes and who it benefits.

  In recent years, trade growth and expanding law enforcement efforts have nearly overwhelmed Customs staff and resources. These demands on Customs personnel and computer resources require changes in the way Customs operates and responds to stakeholder needs. In response, the commissioner and the Office of Information and Technology (OIT) have been planning to modernize Customs technological and operational systems to help Customs staff meet mission needs. The first Modernization project, the Automated commercial Environment (ACE), will focus on trade.

  The Modernization Program will have a positive impact on almost every aspect of U.S. and international trade and travel, Customs operations, and related federal and international government agency missions and programs. The Modernization effort will impact its many stakeholders on a day-to-day basis.

  Although the Automated Commercial Environment will be the first significant accomplishment, the Modernization process is much more than ACE. The entire Modernization program will span 15 years and will cover each of Customs mission areas: Trade, Enforcement, and Administration.

  Modernization will update the systems that Customs uses to do business by:

  •Reducing maintenance costs.

  •Maximizing service to other agencies and trade.

  •Allowing greater access to the public.

  •Using technologies that are interoperable and easy to upgrade.

  Customs’ current import processing system, the Automated Commercial System (ACS), is 17 years old. ACS could not handle the increased computing requirements brought on by trade growth and started to experience service failures called brownouts. These brownouts caused import delays and increased manual processing.

  ACS funding has enabled Customs to increase the mainframe computing capacity, thereby eliminating brownouts. With continued funding, Customs does not anticipate future brownouts until the maximum capabilities of the system and application software are reached. That timeframe is uncertain as trade volume continues its explosive growth.

  Modernization of Customs import processing system is critical because:

  •Trade has grown 132 percent in the last decade.

  •By 2004, Customs will be processing more than 30 million commercial entries a year up from 12.3 million in 1994.

  •New laws and regulations require enhanced functionality.

  To prepare for continued trade growth and address its long-term import processing needs, Customs has designated the ACS replacement, the Automated Commercial Environment (ACE), as the first Modernization project.

  Manually processing today’s volume of work, the way we did at the inception of ACS in 1984, would require a growth in trade staffing to over 49,000 employees.

ACE benefits

  ACE will deliver many valuable benefits to the trade community and to Customs trade compliance business processes. The ACE Cost-Benefit Analysis was published in July 1999 and projected that full implementation of ACE would provide a net benefit of over $3.3 billion during its life cycle. This net benefit results in a net annualized return on investment of more than 13 percent and a benefit-cost ratio of greater than 3:1.

  The benefits that will result from the implementation of ACE are summarized in the following paragraphs.

Increment 1 Release 1

  •Establishes the foundation for account management to provide better customer service and better uniformity of Customs actions.

  *Periodic payment simplifies the duty payment process onto a single national, biweekly billing statement for each company. Similar to a credit card approach, it reflects modern accounting practices.

  •Provides fast release of highly compliant cargo entering the country by truck.

R elease 2

  •Provides fast release of cargo by air, sea, and rail for companies that are predetermined to be highly compliant of U.S. trade laws.

  •Transparent common interface hides IT complexities by providing a single computer interface. The trade will no longer have to support both ACE and ACS interfaces. This is a major step in providing improved E-government to the trade.

Increment 2

  •ACE now supports all modes: air, sea, rail, and truck. Therefore, 98 percent of all import transactions will be handled electronically.

  •Pervasive electronic filing provides Customs and the trade with easier access to information. Therefore, staff productivity improves. The ability to protect the United States from inadmissible merchandise improves (e.g., intellectual property right violations, goods created by child and convict labor).

  •The trade will be able to track the status of import activities (e.g., cargo release, protests and petitions, drawback, compliance assessments, laboratory analyses).

  •The trade will gain electronic access to a wide range of general reference information.

  •Paperless processing of entries reduces clerical, storage, and mailing costs.

  •Common internal user interface provides improved ease of use and productivity for Customs staff.

  •Better analysis tools will assist Customs staff when reviewing import activities. These will shift the focus from individual transactions to performing big-picture analyses to direct Customs activities.

Increment 3

  •Automation of post-summary processes including protests, corrections, and voluntary tenders will be provided. This reduces paper processing and the burden on the trade by better accommodating their existing accounting systems and reporting requirements. It provides Customs with the ability to track this information more effectively.

  •Simpler violation processing will provide a quicker, less labor-intensive means for handling minor violations, such as late filing, through a parking-ticket approach. The trade will have the option to simply pay a violation bill and avoid the liquidation damages process, thereby greatly easing the administrative burden on Customs and the trade.

  •Automated identification and prioritization of discrepancies and potential violations to help Customs direct its enforcement resources toward those problems that merit the most attention. Provides more uniform enforcement responses to the trade community. Enables quick reaction to possible importing violations.

  •Builds a financial accounting system that is consistent with current business standards to track accounts receivables.

Increment 4

  •Completes paperless processing for the trade by extending automation to in bond, foreign trade zones, drawback, and mail processing. This completes the implementation of E-government by

Customs for trade.

  •Customs now has end-to-end tracking and control of trade for improved trade compliance with reduced burden.

  •Companies can now apply business-to-business processes to their import activities.

  •The electronic work environment will provide additional flexibility in matching workload to available staffing. The work can be electronically transferred to Customs staff to handle import surges without forcing Customs staff to travel.

  •The electronic work environment will enable Customs to tap the skills of trade compliance teams around the country to ensure uniformity of trade compliance assessments.

  •Provides Trade with uniform data requirements regardless of whether cargo arrives by land, sea, air, or rail. This reduces the burden of providing data.

  Customs employees will see significant reductions in the effort to process entry summaries and payments. ACE will also provide a national view of import compliance activities and enforcement violations, enabling employees to better focus efforts on high-risk entries.

  Through the modernization effort, Customs employees will be up-to-date on cutting-edge technologies and resources. This will allow Customs to use its resources to more consistently target importers who are non-compliant.

  Customs employees jobs will be greatly enhanced with:

  •Reduced data entry.

  •Reduced paper handling.

  •Reduced financial processing.

ACE benefits for importers

Ace will:

  •Manage import activities on a national basis.

  •Provide a national database of up-to-the-minute information for all of its users.

  •Be easier to use and less expensive than ACS.

  Conform to industry standards and, for example, use XML/HTML software.

ACE benefits for carriers

  ACE will:

  •Enable faster cycle time at Customs borders.

  •Reduce requirements for filing and decrease the effort needed to transfer cargo through Customs.

Technology insertion

  The ACS that Customs uses today was designed in 1984. That was the same year that Apple Computer used the Super Bowl to launch its Macintosh + the first successful mouse-driven personal computer that sat on a desktop. In 1984, we didn’t know the speed with which technological advances would be made. For example, how could we know that personal computers would reside on virtually every desktop by the year 2000, and all of them would be mouse-driven?

  Moreover, in 1984, the prevailing view of technology was that a major computer system would last 10 to 15 years without significant re-work and then would be replaced. Customs has just such a system in ACS.

  In 1984, federal agencies bought large systems that were expected to last 10 to 15 years and when the Automated Commercial System (ACS) was designed a static approach was used. A technology insertion process was not available, therefore a dynamic approach will be used to design the new ACE system. ACE is designed to be flexible, it will support an ongoing process review of business needs and allow us to insert new technology as business requirements change.

  Since 1984, the pace of technological change has increased dramatically, and continues to intensify. Perhaps the most important lesson we have learned from this is that we can accommodate the speed of progress only by remaining flexible.

  We intend to do business the way business does business. We must create systems that can grow with our business needs and allow us to use new advances. Therefore, we view Customs Modernization as ongoing. It’s a process that allows insertion of new technology as advances become available and as our business needs change.

  This perspective of Modernization means that the systems renewal process will never end. It also means that the system should never again become obsolete.