Reconciliation Program (Post-Entry Adjustment)
/ˌrɛkənˌsɪliˈeɪʃən ˈproʊɡræm/ (/poʊst ˈɛntri əˈdʒʌstmənt/)
Reconciliation is a CBP program, authorized by 19 U.S.C. § 1484(b), that lets an importer flag an entry summary for elements that cannot be determined at the time of entry and finalize them later by filing a reconciliation entry (entry type 09). Value, HTSUS heading 9802, and free trade agreement eligibility can be reconciled, and classification can be reconciled only where it is pending a ruling, protest, or court action. The reconciliation entry is due 21 months from the oldest flagged entry summary for value, classification, and 9802 issues, or 12 months from importation for FTA claims.
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In Detail
Section 1484(b) of the Tariff Act of 1930, added by section 637 of the NAFTA Implementation Act, allows a party to elect to file a reconciliation for entry elements identified under CBP regulations; the importer must post a bond or other security before filing, and the statute requires the reconciliation within 21 months after the importer declares its intent to reconcile. CBP has not codified reconciliation in a dedicated CFR part. It operates as a National Customs Automation Program test under 19 CFR § 101.9(b), first announced on February 6, 1998, and transitioned to ACE as the ACE Reconciliation Prototype on February 24, 2018 (83 FR 2645).
The importer flags each underlying entry summary (entry types 01, 02, or 06) for the issue to be reconciled when the entry summary is filed, and later files a single reconciliation entry, entry type 09, covering the flagged entries for that issue. Value reconciliation is used where final prices, royalties, assists, or similar amounts are not known at entry; classification reconciliation is limited to issues pending a ruling, protest, or court action; 9802 reconciliation covers the value of U.S.-origin components in goods assembled abroad; and FTA reconciliation covers post-importation preference claims. CBP's guidance states that no extensions are allowed on reconciliation filing deadlines.
A common error is failing to flag the underlying entries, or to flag them for the right issue, at the time of entry summary; an unflagged entry cannot be brought into a reconciliation later. Another is treating classification reconciliation as a general correction tool: it is available only while the classification question is pending a ruling, protest, or court action. Missed deadlines and mismatches between the reconciliation and its underlying entries can result in loss of the adjustment or refund.
Classification Significance
Reconciliation does not shield an importer from its reasonable-care obligations. Entries that should have been flagged, or classification positions that were not genuinely pending a ruling, protest, or court action, remain exposed to demands for unpaid duties, interest, and penalties under 19 U.S.C. § 1592 if errors surface in an audit. Using reconciliation correctly, for elements that are genuinely undeterminable at entry, documents that the importer handled the open question deliberately.
How Kanon Handles This
Kanon's HTS classification engine is designed to produce an accurate classification at entry, minimizing reliance on classification reconciliation, which CBP limits to issues pending a ruling, protest, or court action. Where a classification question is genuinely pending, the Classification Support Package documents the reasoning behind the classification declared at entry and supports any adjustment made in the reconciliation.
Frequently Asked Questions
What types of information can be reconciled?
CBP allows four reconciliation issues: value, classification, HTSUS heading 9802, and free trade agreement eligibility. Classification reconciliation is limited to issues pending a ruling, protest, or court action. Value, classification, and 9802 reconciliations are due 21 months from the date of the oldest flagged entry summary; FTA reconciliations are due 12 months from the date of importation of the oldest flagged entry. Reconciliation entries are filed as entry type 09.
Is participation in the Reconciliation Program mandatory?
No. Reconciliation is an election under 19 U.S.C. § 1484(b). The importer must post a bond or other security and flag the underlying entries at entry summary. It is a structured way to finalize elements that cannot be determined at entry; it does not excuse inaccurate declarations of elements that were knowable at entry.