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Blanket Flagging for Reconciliation to be Eliminated as of Oct. 1

Friday, August 12, 2016
Sandler, Travis & Rosenberg Trade Report

U.S. Customs and Border Protection has notified importers that as of the Oct. 1 effective date for mandatory use of the Automated Commercial Environment 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 an importer to identify undeterminable information (other than that affecting admissibility) at the time an entry summary is filed and provide that information at a later date. The importer identifies the outstanding information by means of an electronic “flag” placed on the entry summary at the time it is filed and payment (applicable duties, taxes and fees) is made. 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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