It has been almost one year since the industry filed its first reconciliation entry in ACE. While there have been many hurdles and many successes, we thought that we would share our top 5 lessons of what we have learned so far.
- Values still matter: In ACE, the idea was that the trade would only need to transmit tariff lines from entry summaries that had changes to be made. The ACE module populates the entry totals of duties/fees to CBP specialists at the entry level and ignores the original amount the filer transmits. As you can imagine, this has caused all sorts of manual rejections because the figures don’t line up. This was particularly the case for NAFTA filings. We are working with CBP on these issues to resolve anomalies as they crop up.
- It’s not all paperless: One of the goals with recon in ACE was to eliminate the need for physical documents to be submitted. For the most part, we are where we expected to be – no CDs and no entry packets necessary. However, in cases where Liquidated Damages are issued, a paper petition is required to be sent to the issuing fines, penalties, and forfeitures office. CBP will then mail out a decision letter offering mitigation.
- Aggregate vs. Entry-by-Entry: There really is not much of a difference between aggregate and entry-by-entry filings in ACE. We do know that an aggregate filing will prevent any value changes from being included in a Duty Drawback claim. It will also still force a waiver of any refunds that could have been obtained with an entry-by-entry. However, tariff line level data is still required to be reported on each type of filing.
- Liquidations of recon entries are slower in ACE. It appears that most no-change filings are scheduled to liquidate first. This makes sense as there isn’t much to review with a no-change, however many of them are not set to liquidate by CBP until the end of 2019, which is much longer than under ACS. Value changes and NAFTA/FTA filings are also being scheduled to liquidate, but it is taking quite a bit of time for CBP to review them. We have learned that filings may not be reviewed until all of the underlying entry summaries have liquidated. This does not mean that filings don’t need to be turned in on time. We’ve also found that importers who actively work with their Centers of Excellence appear to have a much quicker turnaround time for their Recons to be reviewed.
We should also note that as of January 7th, CBP is not processing refunds for any type of entry due to the government shutdown. Entries are still being liquidated, and interest may accrue on any refunds that are not processed.
- There are a lot more companies filing Recon: It appears that the Trade community is catching on to the need/requirement of declaring value adjustments to their imports. Many more of our new clients are now adjusting values for Transfer Pricing and Assists. We are also helping folks who are participating in recon that are impacted by the current Trade Actions. Both increases and decreases to value apply to tariff items that pick up the additional duties from these remedies.
The rocky road that the trade saw when reconciliation under ACE first began is starting to smooth. We are happy to help with any questions that you may have. Please feel free to contact me or reach out to the Tradewin team. Enjoy the ride.