Reconciliation 

   The reality of modern international trade is that many elements of a transaction may be undeterminable at the time the merchandise is entered. For example, the final value of equipment provided as an assist may not be known until the close of an accounting period, so the correct value of the merchandise is not known until that time.

   Reconciliation allows the importer, using reasonable care, to file entry summaries with Customs 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 that provides the final and correct information. The Reconciliation is then liquidated, with a single bill or refund, as appropriate.

   In the ACS Reconciliation Prototype, the following issues are allowed Reconciliation:

   •Value (assists, royalties, etc.).

   •HTS 9802 value.

   •Classification.

   •NAFTA eligibility.

   Customs has designed a menu approach to Reconciliation. Importers will be able to select the methods which best suit their business needs.

   Notifying Customs: Entry summaries may be flagged individually or via a blanket application. The blanket application results in the automatic flagging of all entry summaries for a specified time period.

   Filing the Reconciliation: The Reconciliation may be filed with data showing entry-by-entry adjustments to duties, taxes, and fees, or with aggregate data showing only the adjustment without entry-level detail. For fiscal control reasons, the aggregate method will be allowed only when the Reconciliation does not claim a refund in duties, taxes and fees. Similarly, drawback claims against the reconciled amount will not be accepted. (The original underlying entry summaries remain eligible for drawback once the Reconciliation has been filed.) Also, refunds in duties may not be netted against duties owed on.

Reconciliation.

   When an importer files an entry summary while certain elements remain undeterminable, the entry summary is flagged (either individually or via a blanket application), thereby providing Customs a notice of intent to file a Reconciliation.

   The importer is obligated to use reasonable care in filing entry summaries, even when they are subject to reconciliation. For example, importers must provide their best estimates in declared value, rather than using values that bear no relation to the reality of the transaction.

   When the information becomes available, the importer files Reconciliation. Reconciliation can cover up to 9,999 underlying entry summaries. The Reconciliation is due within 12 months of the earliest entry import date for NAFTA Reconciliation, or within 15 months of the earliest entry summary date for all other issues.

   When the Reconciliation is filed (prior to the end of 12 or 15 months as described above), the payment of additional duties, taxes, fees, and interest (or claim for refund) is made. The Reconciliation is processed, subject to verification, if necessary, and liquidated.

   Reconciliation is treated like any other Customs entry for purposes of liquidation and protest.

How do I obtain a listing of my flagged entries?

   The tracking and timely reconciliation of flagged entry summaries is the responsibility of the importer (and filer/broker). To assist the importer in this regard, Customs has been providing importers with reports of their flagged entries upon request. Additionally, Customs has been providing importers with monthly reports of flagged entries coming due during the following month (known as the Heads-Up Report). However, due to workload considerations, continued issuance of these flagged entry reports has become unsustainable.

   Because Customs believes that a centralized, efficient clearinghouse for providing flagged entry reports is beneficial to both Customs and trade, it proposed an Internet-based lookup system in the Dec. 29, 1999 , Federal Register. This system was not developed but has been replaced with a fee-for-service procedure to be handled by Customs Accounting Services Division in Indianapolis , Ind. Thus, this document announces the fee-for-service report procedure as a modification to the prototype. Customs believes that the announced fee-for-service procedure will be more efficient and provide a better product than in the past. Additionally, Customs will be properly reimbursed for manpower and computer time spent downloading and compiling these reports.

   The new fee-for-service flagged entry reports are extensions of two reports Customs already provides: the Masterfile Extract and the Liquidation Extract. The Masterfile Extract reports all open bills and unliquidated formal entries. The Liquidation Extract reports all liquidated entries during a given fiscal year. Under the test, both reports will provide, among other things, dates of entry and entry summary; total duties, taxes, and fees paid on a given entry; whether the entry was flagged for reconciliation; and the particular issue or issues for which the entry was flagged (Value, Classification, 9802, NAFTA or a combination of these). Listed entries that do not reflect any flag data either were never flagged or the flags were already closed out on a previously submitted Reconciliation. Since flagged underlying entry summaries for a certain period may be liquidated or unliquidated, importers are encouraged to request both reports to maintain complete records.

   When the fee-for-service report system becomes operational, the free reports currently provided by the Reconciliation team, including the “Heads-Up Report,” will cease to be issued.

   As stated before, the Masterfile Extract will list all open bills and all unliquidated formal entries, and the Liquidation Extract will list all liquidated entries for a given importer number during a given fiscal year (October 1 - September 30). Under the new procedure, requests for reports must be in writing on company letterhead and include payment for processing fees. They also must specify the Importer of Record Number (the IRS number).

   The fees for Master File Extracts are as follows: $150 for the first importer number; $50 for the second importer number; and $25 for each additional importer number.

   The pricing for the Liquidation Extract is separate from the Master File Extract and is as follows: $200 for the first importer number for a given fiscal year, plus $50 for each additional fiscal year requested for that importer number; $100 for the second importer number for a given fiscal year, plus $50 for each additional fiscal year requested for that importer number; and $75 for each additional importer number for a given fiscal year, plus $50 for each additional fiscal year requested relative to those importer numbers.

   In addition to requesting reports in letterform, importers can request that Customs furnish a report via computer diskette. If the importer requests that Customs furnish the report on both computer diskette and paper, an additional fee of $50 will be charged. The written request, with payment in the form of a check made payable to the U.S. Customs Service, should be mailed to: U.S. Customs Service, Accounting Services Division, ATTN: Collections Section, 6026 Lakeside Blvd. , Indianapolis , Ind. 46278 . Each request requires approximately one week from receipt to process. If further information or assistance is needed to determine charges, please contact Debbie Wolfley at (317) 298-1200, extension 1363.

How to apply

   Parties interested in applying should send the following information:

   •Importer name and IRS number (include suffix).

   •Broker name(s) and filer code.

   •Surety name(s) and surety code(s).

   •Bond coverage (reconciliation rider mentioned in Federal Register notice of August 18, 1998 . The Reconciliation Bond Rider must be filed at the Customs port where the continuous bond is filed. A copy of the rider and identification of the port in which the continuous bond and rider are filed should be included with the application. In the event that a Reconciliation participant changes their continuous bond, copies of the replacement continuous bond, as well as a copy of the new bond rider need to be provided to the HQ Reconciliation team.

   •Commodities (description and/or HTS no.) covered under the Reconciliation.

   •Port(s) at which underlying entries will be filed.

   •Port location from where ABI transmission will be sent.

   •Number of entries anticipated to be covered by the Reconciliation.

   •Detailed description of specific issue(s) to be reconciled.

   •Point of contact and telephone number.

   The application may be submitted by the importer’s broker and/or attorney, if duly authorized. This information should be submitted to Reconciliation Team, U.S. Customs Service, 1300 Pennsylvania Ave, NW , Rm. 5.2A, Washing-ton , DC , 20229-0001 .