Reconciliation or Post Entry Correction

U.S. Customs and Border Protection (CBP) requires importers to exercise reasonable care when declaring data elements like valuation, classification, and free trade eligibility. Part of this requires importers to ensure the information they submit to CBP is accurate and make any necessary corrections to their customs entries. Post summary corrections (PSC) are often used to make these corrections; however, it is not always the best option.

PSCs should only be used to correct data elements that could have been determined at the time of entry. The excessive use of PSCs can be construed as a failure to exercise reasonable care by the importer and can result in penalties.

Understanding the reasons why you are filing PSCs will help determine whether your company should investigate the CBP reconciliation program as a preferable way to correct certain data elements after entry.

The first step to corrections

Importers should first review the types of corrections they are routinely making and determine which data elements could have been determined at the time of entry and which data elements are reasonably indeterminable at the time of entry.

What is the CBP reconciliation program?

Reconciliation is a voluntary program that allows importers to flag entries for customs, identifying that, at the time of entry, there are indeterminable data elements (issues) that will be corrected at a later time. There are only four specific issues allowed by customs to be updated under a reconciliation entry.

Issue	What Is Eligible	Time to Reconcile
Value	All types of valuation issues can be flagged: assists, royalties, price transfer adjustments, year-end adjustments, etc.	Mandatory filing 21 Months from original entry summary filing
Classification	Classification flags can ONLY be used if the classification is pending an administrative ruling, protest, or pending a court action.	Mandatory filing 21 Months from original entry summary filing
9802 HTS	Goods entered in HTSUS subheadings 9802.00.60–9802.00.90, which are goods manufactured abroad with U.S. components.	Mandatory filing 21 Months from original entry summary filing
520(d) Free Trade Agreements (FTA)	Duties are paid at time of entry, but then refunded if it is later determined the goods are eligible for one of the free trade agreements.	Optional filing If filed, must be completed within one year from date of import

How do importers participate in reconciliation?

Reconciliation is open to all importers. But it may not be right for everyone. Use the information below to take your first steps.

Confirm you are a good candidate

Do any of the below scenarios apply to your company? If your process involves any of the examples below, your company might be a good candidate for CBP’s reconciliation program:

Regularly apply assist charges to entries after the fact
File a large number of PSCs due to a change in value after the time of entry
Have a valuation methodology more complex than “price actually paid or payable”
Have related party transactions that are subject to year-end transfer pricing changes requiring entry valuation to be corrected
Routinely file 520(d) to add USMCA or other Free Trade Agreements that require 520(d) filings
Import product on consignment using an estimated value that needs to be adjusted after product is sold
Use a classification for your product that is dependent on the outcome of a binding ruling request or protest

The above list is not exhaustive and there are many more examples that would apply as well.

Secure guidance and support

Review CBP’s reconciliation web page and external guidance document for more information. Our U.S. customs clearance guide and checklist can also be helpful, offering items importers should routinely review to ensure all data elements declared are up to date while also strengthening your overall trade compliance program.

Get started with customs reconciliation

If you’ve determined the program would be a good fit for your business, you will want to ensure you’re ready to begin before participating:

Have a continuous bond and a valid reconciliation bond rider
Determine which transactions may be eligible and which issues apply
Advise your customs broker to flag applicable entries with the issue flags—customs brokers may flag all transactions or specific entries individually, but the importer must provide guidance on which entries to flag and for which issue
Establish an internal compliance process to monitor and manage the required changes, adjustments, or corrections at the time of the reconciliation filing
Establish an internal compliance process to actively monitor and manage the customs defined deadlines for reconciliation filing
Get an Automated Commercial Environment (ACE) portal account to effectively monitor flagged entries, track deadlines, and obtain customs entry data for flagged entries
Work with customs brokers to file reconciliation entries and close out flagged issues before the deadline
Pay any additional duties and taxes owed, which can be processed through either your or your customs broker’s automated clearinghouse (ACH) account

Keep in mind, reconciliation resulting in refunds will be paid to the importer, with interest, via check or ACH refund. A periodic monthly statement (PMS) is not an option.

Looking for additional reconciliation resources?

C.H. has a dedicated team who can discuss setting up or enhancing a reconciliation program and filing process. Reach out to you C.H. Robinson representative for more information or to connect with our in-house experts.