WHAT IS NAFTA Reconciliation AND WHAT LED TO ITS INCEPTION?

In essence, it is a method by which the importer can correct the prices on a commodity post entry summary.

This is why Reconciliation is introduced. In 1993, a new act called the Modernization Act (Mod Act) was passed that takes in factors like “Shared responsibility” and “Reasonable care.” With the reconciliation process, it allows future submission of indeterminable information to the CBP to enhance the entry summary process. The reconciliation process was named the ACS reconciliation prototype and later renamed to ACE Reconciliation Prototype. The ACE reconciliation was published on February 6, 1998.

With Reconciliation, the importer can file entry summaries with CBP with reasonable care. The filing is done under the mutual understanding that certain variables such as declared value will remain in an outstanding state. And after a later date, the importer again files a Reconciliation that states the final and correct information. Then the Reconciliation is liquidated using refund or single bill, as needed.

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Value Reconciliation

Many elements of a transaction may be indeterminable at the time the merchandise is entered. For example, the final value of the equipment provided as an assist may not be known until the close of an accounting period. So, the correct value of the merchandise is not known until that time.

Customs allows importers to bring in merchandise at an estimated value with the understanding that the importer will determine actual costs and submit this information according to what CBP has determined.