Reconcile with CBP. What is Customs Reconciliation?

Reconciliation is a vital process that allows importers and brokers to streamline customs procedures, an increasingly important mechanism as trade volumes continue to break records and reach all-time highs.

Enacted in 1993 through the Modernization Act, reconciliation enables importers to use the best available information to determine valuation—simply by flagging the estimated values, the Customs Border Patrol (CBP) understands that actual information will be received later. This is particularly useful in cases where it is difficult to quickly ascertain exact entry figures, and it enables the importer to maintain timeliness yet avoid substantial penalties for declaring inaccurate values at the time of entry.

Three types of entries are eligible for reconciliation:

Entry type 01: Free and dutiable formal consumption entries
Entry type 02: Quota/Visa consumption entries
Entry type 06: Foreign Trade Zone (FTZ) consumption entries

Entries may contain incorrect information for any of the following four categories, either individually or in combination:

Value (Assists, Royalties, etc.),
HTS 9802 Tariff code
Eligible free trade agreements (FTAs), such as USMCA, Chile FTA, Colombia TPA, Korea FTA. Etc.
In certain situations (pending rulings, protest, court actions), a tariff classification will also be an element for reconciliation.

Each of these categories have distinct deadlines by which a reconciliation must be filed. For FTA issues, the deadline is 12 months from the date of importation. The remaining three categories (value, 9802, classification) have a longer timeline—the reconciliation needs to be filed no later than 21 months from the date of entry summary. It is critical to note that no extensions are granted beyond these deadlines.

After filing for reconciliation, the entries are then liquidated, rejected, or change liquidated. Depending on whether entry duties were underpaid or overpaid, either a payment to Custom Border Patrol (CBP), or refund from CBP, will be processed (respectively).

If you would like more information on how reconciliation process could work for your business, please contact us at sales@allynintl.com.

Contributor: Matheus Silva

About Allyn International

Allyn International is dedicated to providing high quality, customer centric services and solutions for the global marketplace. Allyn's core products include transportation management, logistics sourcing, freight forwarding, supply chain consulting, tax management and global trade compliance. Allyn clients range from small local businesses to Fortune 500 firms. Allyn conducts business in more than 20 languages and has extensive experience in both developed and emerging markets. Highly trained experts are positioned throughout North and South America, Europe and Asia. Allyn’s regional headquarters are strategically located in Fort Myers, Florida, U.S.A., Shanghai, P.R. China, Prague, Czech Republic, and Dubai, U.A.E. For more information, visit www.allynintl.com