Flagged or Not

Posted by The Tradewin Team
Blog originally posted on 14/05/2015 09:54 AM


Just a quick note to give all of you blanket flaggers and possibly even some of you Entry by Entry flaggers a heads up. Five times in the past three weeks I have been advised by importers that information pulled from ACE does NOT show 100% of their summaries with reconciliation flag (indicator) codes. Some might say that common sense should tell you that as a blanket flagger you should KNOW that all of your imports are being flagged for reconciliation. But, reality is – well, reality! People tasked with preparing reconciliation filings aren’t always “in the know” with respect to their company’s flagging set ups and the first thing they do after pulling a report from ACE is to dump all the summaries that don’t have reconciliation indicator codes.

The first instance started with the issuance of a NO FILE liquidated damages penalty. Upon receipt of the notice the first thing the importer did was log into ACE and look for the 001 (001 indicates the summary is flagged for Value and has not been reconciled) code in the OTHER RECON INDIC column. It was blank. The importer wanted to know why, so they called me! I wasn’t able to answer that question nor was I able to appease them. In somewhat of a panicky voice I heard, the report was wrong, the penalty notice shouldn’t have been issued, I’m going to lose my job, yada, yada, yada, just make the penalty go away!!! A decision was made to process and file a reconciliation entry to close the flag out (in lieu of fighting the case), wait for the mitigated amount, and pay it. However, the importer is currently reviewing their 2014 ACE data set and will most likely be approaching their account manager with their findings.

The second instance involves another importer and a significantly greater number of summaries. A report from ACE covering a 9 week period shows a handful of summaries with reconciliation indicator codes of 001 – flagged for Value, not reconciled. (Keep in mind this is an importer with a blanket flag request on file). The remaining summaries – several hundred of them - show nothing in the indicator code column. All were indeed flagged and a reconciliation entry was filed only a few days before liquidated damages applied.

The third, fourth, and fifth instances are iterations of the first, all involving liquidated damages notices. It just so happens that all of the importers in question flag for Value only, but it is quite likely this problem exists for other reconciliation flag types as well.

So what’s my point? (I have to ask myself because sometimes I get going on something and completely lose sight of where I want to end up!). Simply put, we still cannot rely on the information in ACE with respect to reconciliation flag indicators, and based on what I’ve seen recently, the problem is getting worse, not better.

  1. If ACE data appears to be inaccurate assume every eligible summary is flagged – blanket flaggers only, not recommended for entry by entry flaggers. Better to include all summaries in a filing and remove any that aren’t, versus assuming they aren’t and receiving a surprise liquidated damages notice down the road. (Let ABI confirm the recon flag.)
  2. Advise your Customs assigned account representative, the ACE helpdesk, and the recon helpdesk that you believe your reconciliation flag data is inaccurate. The more people that say something, the more attention this problem will get (or at least we can hope so anyway.)
  3. If you are currently using ACE data – specifically the recon indicator data column – in you reconciliation process, I recommend using at least one other CBP data source (ITRAC or the Extract reports from the National Finance Center) to ensure no flagged summaries are missed.

Issues with ACE aren’t necessarily new – and not just for reconciliation flag information -  but because ACE is supposed to become a one stop shop over the next 6-18 months the more importers that make CBP aware of this problem, the better.

Topics: Best Practices

Blog originally posted on 14/05/2015 09:54 AM

The Tradewin Team

Written by The Tradewin Team

Since 1997, Tradewin has been providing expert import and export advice to clients all over the world. Combined, our skilled team of Customs brokers, lawyers, accountants and other professionals possess more than 400 years of experience. Together, we've helped thousands of clients save more than $50 million in duties, guiding them through the ever-changing and complex arena of international regulations as effortlessly as possible.