How long has the reconciliation program been around? The prototype – yes prototype – will celebrate its’ 16^th birthday this coming October 1^st. So imagine my surprise when I was recently contacted by an importer that had been “kicked out” of the program. Since that phone call several months ago I have been made aware of no less than five importers that have either received the “boot” or been “put on notice.”

Historically Customs and Border Protection (CBP) has put up with importers that are habitually late with their reconciliation filings. Meaning CBP – via FP&F – issues the NO FILE liqudated damages notices, the importer has their filer process and file a reconciliation entry, CBP mitigates the penalty, the importer pays the Option 1 amount, and we repeat the process again next month. Works for everyone involved right? CBP gets a little more money via the Option 1 amount, the importer doesn’t have to increase headcount or reallocate resources, and the recon filer gets more filings this way. These habitually late importers – and they know who they are – seem to have taken the stance that they would rather pay $500.00 each month for late files rather than address the problem.

So, what do you have to do to get shown the door? Sorry folks, this is not an exhaustive list:

1)      No continuous bond on file (lapse in coverage)

2)      No bond rider on file – with either the NFC or with CBP HQ

3)      Summaries consistently appearing on the monthly NO FILE lists

4)      With number 3, repeated liquidated damages cases

5)      Repeat requests for retroactive flagging

And what must be done to gain re-admittance? At this point in time, the answer to that question is not entirely clear. I do know that items one through five above must be addressed and taken care of, and that an importer must reapply after a certain period of time. I believe it is safe to assume that the importer will need to show responsible supervision and reasonable care and control, probably through a process improvement plan. This is new territory for all parties and CBP has yet to issue any guidance to the trade on this subject. Based on what I have seen and heard there may not be any guidance forthcoming. And for now it appears that CBP HQ will be addressing each importer’s situation with respect to regaining acceptance into the program on a case by case basis.