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What is Reconciliation?

A CBP program allowing importers to flag entries for later adjustment of value, classification, or trade program claims. In the context of U.S. customs and tariff recovery, understanding reconciliation is essential for navigating the CAPE refund process and ensuring accurate duty assessment.

Definition

Reconciliation is a CBP program that allows importers to flag certain entries at the time of filing for later adjustment of specific data elements — typically value, classification, or trade program (e.g., NAFTA/USMCA) claims. Rather than filing final data upfront, the importer files an initial entry with estimated data and a 'reconciliation flag,' then submits the final, reconciled data within 21 months. This is useful when information (such as transfer pricing adjustments between related parties) is not available at the time of entry.

How Reconciliation Relates to Tariff Refunds

Entries flagged for reconciliation may have incomplete or estimated duty amounts at the time of filing. When analyzing ES-003 data for CAPE claims, Tariffi identifies reconciliation-flagged entries and accounts for the fact that their duty amounts may be adjusted in the reconciliation filing. This prevents over- or under-claiming on CAPE declarations.

Example

A multinational imports goods from a related-party supplier. The transfer price is set at $100 per unit, but the final transfer pricing adjustment (required by tax authorities) may increase it to $110. The importer flags the entries for reconciliation and files the adjusted customs value later.

Frequently Asked Questions

What elements can be reconciled?
Value (transfer pricing adjustments), classification (pending ruling decisions), and free trade agreement eligibility (pending origin verifications) are the most common.
How long do I have to file reconciliation?
The reconciliation entry must be filed within 21 months of the earliest entry covered by the reconciliation. Extensions are possible but must be requested.

Related Terms

LiquidationCBP's final determination of the correct rate of duty and total amount owed on an import entry.Customs ValueThe declared value of imported goods used as the basis for calculating ad valorem duties, per 19 U.S.C. section 1401a.Entry SummaryCBP Form 7501 — the document that declares the value, classification, and duty owed on imported goods.ValuationThe process of determining the customs value of imported goods for duty assessment, governed by 19 U.S.C. section 1401a.ACEAutomated Commercial Environment — CBP's online portal for trade processing, entry filing, and data retrieval.

Legal References

  • 19 U.S.C. § 1401a(b) — Reconciliation
  • 19 CFR Part 401 — Reconciliation

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