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Questions and Answers about Reconciliation

Q: How do I tell CBP of my intention to reconcile?
A: There are two options. As part of the ABI header transmission of an entry summary, you may provide an electronic "flag." This electronic flag will identify the undeterminable issue(s) subject to reconciliation.

The second option for notifying CBP of an intention to reconcile is via a blanket application. This application must be submitted to CBP in writing and must specify the importer of record number, the period of time involved and the indeterminable issue(s) subject to reconciliation. CBP will then generate an electronic flag for ALL entry summaries filed within the specified scope. Should an importer wish to flag for reconciliation at a more detailed level (e.g., importer, time period, HTS), the blanket application is not an option and the entries should be flagged on an entry-by-entry basis. The blanket application must be received by CBP no later than seven working days prior to transmission of the first entry summary subject to Reconciliation.

Q: What are the options for filing a Reconciliation?
A: There are two options:
  • Reconcile Entry-by-entry. This is available for increases and decreases.
  • Retain drawback privileges on both the underlying entries and the reconciled adjustment.
Q: Why can't I file an aggregate Reconciliation when I need a refund?
A: CBP must have financial safeguards to ensure that it does not refund more than is due. Refunds, caused by change liquidations, drawback, etc., are paid on an entry-by-entry basis. A refund from an Aggregate Reconciliation would not be associated with any entry, so CBP couldn't be sure that money from a given entry wasn't refunded twice.
Q: How are my drawback privileges affected by Reconciliation?
A: Drawback claims are not accepted on any entry, which has been flagged for reconciliation until the Reconciliation is filed.

If you file Entry-by-entry Reconciliation, you have full drawback privileges on both the estimated duties paid at the time of summary AND any increased adjustment resulting from the Reconciliation, once the Reconciliation is filed with duties/taxes/fees deposited.

If you file an Aggregate Reconciliation, you have drawback privileges on all underlying entries upon filing of the Reconciliation. You can never claim drawback on the additional amount you tender with the Reconciliation. For example, if the entered value on the underlying entry if $1,000, and the overall Reconciliation increase adjustment is $10,000, once the Reconciliation is filed, the $1,000 is eligible for drawback. The $10,000 will not be eligible for drawback.

Q: Once I start flagging entries, how long do I have to file my Reconciliation?
A: 520(d) Reconciliations have a separate deadline from Reconciliations of other issues. (Certain free trade agreements - North American Free Trade Agreement, the United States-Chile Free Trade Agreement, the Dominican Republic-Central America-United States Free Trade Agreement, the United States-Oman Free Trade Agreement, the United States-Peru Trade Promotion Agreement Implementation Act, the United States-Panama Trade Promotion Agreement, the U.S.-Korea Free Trade Agreement and the United States-Colombia Trade Promotion Agreement is 12 months from the earliest import date. Valuation, 9802 and classification is 15 months from earliest summary date, 21 months from earliest summary date for entries made on or after February 9, 2005).
Q: Do I have to wait to the end of 15/21 months to file my Reconciliation?
A: No. That's just the maximum time frame. If you have your data together sooner and want to file your Reconciliation at 4 months, for example, that's fine with us.
Q: Can an importer file two separate Reconciliations for a time period, one for increases and one for decreases?
A: Yes. As mentioned above, 520(d) Reconciliations have a shorter time frame. They can be submitted separately.

As for Reconciliation of the other issues, two separate Reconciliations may be filed for a time period (i.e., Aggregate Reconciliation for increases and no-changes, and an Entry-by-entry Reconciliation for refunds requested.) The limitation is that a given entry summary must be dealt with only on ONE of the two Reconciliations. (The Customs computer system will allow an entry summary to be Reconciled ONCE for 520(d) and ONCE for everything else

 

Last modified: 
February 5, 2014
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