U.S. Customs and Border Protection (CBP) announced that paper applications for the reconciliation program will no longer be required, and its “blanket flagging” of entries for reconciliation will end as of 1 October 2016 when the ACS Reconciliation Prototype moves to CBP’s Automated Commercial Environment (ACE).
With the end of “blanket flagging” by CBP, all entries will need to be flagged by filers/brokers. Importers that elected blanket flagging on their reconciliation application need to consider contacting their customs brokers to define new flagging requirements.
Reconciliation is a mechanism by which importers may identify entries for which certain information is not available at the time of the entry filing, and may submit this information at a later date. Subject entries are identified via an “electronic” entry flagging.
As part of the reconciliation approval process, importers have been able to request "blanket flagging" reconciliation approvals for specific issues. If an importer is approved for "blanket flagging" reconciliation, CBP’s current system automatically sets up those summaries as being subject to reconciliation for the issue(s) approved in the blanket.
However, with the 1 October 2016 effective date for mandatory use of the ACE for reconciliation, all importers with bond riders filed with CBP will be automatically set up for reconciliation and will be able to flag entries for reconciliation without the need of paper applications and CBP prior approval for the program.
As part of this change, the “blanket” feature in ACS will no longer be available, and underlying entries will need to be flagged by filers/brokers at the time of filing the entry summary. Also, reconciliation flags may be monitored through various reports provided in ACE including AM-008 Entry Summary Line Detail Report. A reconciliation flagging indicator is included under the column “Other Recon Ind” and indicator codes vary depending on type of reconciliation flagging and whether the underlying entry is pending reconciliation or a reconciliation has been submitted. For instance, 001 indicates open underlying entries flagged for value, while 021 indicates reconciled value underlying entries (the table below provides additional issue codes).
The transition to ACE will ease the reconciliation process by ending the paper application requirement and subsequent CBP approval, and by allowing any importers with the required bond on file, to utilize the reconciliation program.
However, importers currently benefitting from blanket flagging need to consider contacting their customs brokers or updating their internal processes (for self-filers) to define new flagging guidelines. Filers cannot modify reconciliation flagging following entry summary filings. If reconciliation flags are not included at the time of entry filing, filers will need to make a formal request with CBP to retroactively flag the entries in question. Such requests will be granted on a case-by-case basis, and are to be used on an ad hoc basis only. When flagging is not made at the time of entry-summary submission, importers may need to rely on alternative mechanisms—such as 520(d) claims, post-entry amendments, and prior disclosures—to correct information previously submitted via reconciliation.
CBP is hosting a webinar on the changes concerning the reconciliation program on Friday, 19 August 2016, at 12:30 p.m. EST.
For more information, contact a professional with KPMG’s Trade & Customs practice:
Douglas Zuvich | +1 (312) 665-1022 | firstname.lastname@example.org
Andrew Siciliano | +1 (631) 425-6057 | email@example.com
Todd Smith | +1 (949) 885-5617 | firstname.lastname@example.org
Luis Abad | +1 (212) 954-3094 | email@example.com
John McLoughlin | +1 (267) 256-2614 | firstname.lastname@example.org
George Zaharatos | +1 (404) 222-3292 | email@example.com
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