U.S. Customs and Border Protection is planning to further advance in 2025 work on a new system that will ultimately replace the Automated Commercial Environment.
In a recent update, a working group under CBP’s Customs Commercial Operations Advisory Committee said ACE 2.0 is CBP’s plan to modernize ACE by adding needed new functionality and capabilities to implement the next generation of business processes envisioned by the 21st Century Customs Framework. It is intended to close capability gaps associated with trade facilitation, systems integration and data sharing, supply chain transparency, trade enforcement management, and anomalous trade detection.
To lay the groundwork for this effort, CBP is continuing to work on ensuring the global interoperability of ACE 2.0, which means the system will work with a variety of technologies (both current and future) and thus enable the exchange of data with a wider variety of trade entities in near-real time. Toward that end CBP is pursuing two global interoperability standards – verifiable credentials and decentralized identifiers – that, when used in unison, will provide CBP with digital twins, or virtual representations that describe what the item is, where it is located geographically, and who controls it.
According to the update, the results of CBP’s first test of these standards in August 2023 support CBP’s ability to (1) secure confidential trade information storage and transmission, (2) provide simultaneous access, validation, and record updates, and (3) enable continuous supply chain traceability across a network of entities and locations. Since then CBP has completed similar testing with respect to the steel and pipeline oil sectors in the fourth quarter of fiscal year 2023 and with respect to the e-commerce, food safety, and natural gas sectors in November 2024.
CBP also anticipates international testing in 2025 that will include three technical demonstrations of data exchange between CBP and select foreign customs authorities to confirm that CBP can issue and exchange information globally: (1) an automated framework based on traceable presentations, global interoperability standards, and immutable ledger technology that allows trade data exchange among authorized economic operator partners, (2) the exchange of Customs Trade Partnership Against Terrorism/AEO credentials between countries to prove CBP can issue and exchange credentials in a globally interoperable manner, and (3) countries’ exchange of bill data to verify exported goods.
Finally, provided sufficient funding is identified and secured, CBP anticipates conducting in 2025 and 2026 limited production pilots that will serve as the bridge between the technology demonstrations and broad ACE 2.0 implementation, which is expected to begin no sooner than 2026.
For more information on these developments or ACE 2.0, please contact attorney Lenny Feldman at (305) 894-1011 or via email.
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