No more Blanket Flagging for Reconciliation
Information derived from Sandler, Travis & Rosenberg Advisory Services, Inc. | Friday August, 12, 2016
After October 1, 2016, the effective date for mandatory use of the Automated Commercial Environment (ACE) for reconciliation, CBP will no longer support blanket flagging of underlying entries.
Importers that currently benefit from blanket flagging should begin working with their customs brokers to ensure entries are flagged in accordance with the importers’ requirements.
Reconciliation allows the importer, using reasonable care, to file entry summaries with CBP with the best available information, with the mutual understanding that certain elements, such as the declared value, remain outstanding. At a later date, when the specifics have been determined, the importer files a reconciliation entry which provides the final and correct information. The reconciliation entry is then liquidated, with a single bill or refund, as appropriate.
Please note that participation in reconciliation does not defer entry summary obligations. The reconciliation participant shall exercise reasonable care in filing entry summaries, even when they are subject to reconciliation and a Customs broker shall demonstrate responsible supervision and control over the filing of the initial entry and subsequent reconciliation entry.
Issues for which an entry summary may be flagged relate to value issues other than claims based on latent manufacturing defects, classification issues (on a limited basis), issues concerning value aspects of entries filed under HTSUS heading 9802, and issues concerning merchandise entered under many free trade agreements that are eligible for treatment under 19 USC 1520(d). Blanket flagging was implemented by CBP to allow importers to benefit from reconciliation even if they (or their brokers) inadvertently failed to transmit the reconciliation flag on an underlying entry.
However, CBP has now announced that blanket entry flagging will no longer be allowed after Oct. 1 when the reconciliation process moves to ACE. As a result, all reconciliation flagging will have to be done on an entry-by-entry basis. Failure to do so will require importers to submit 520(d)s, post-summary corrections or prior disclosures to correct issues that are otherwise handled by reconciliation.
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