CBP Reconciliation Program: Bonds, Deadlines, and Penalties

The CBP Reconciliation Program is a Customs and Border Protection process that lets importers file an entry summary with estimated figures and then submit the final numbers later, instead of getting everything right on day one. Its authority sits in 19 U.S.C. § 1484(b), which allows the importer to declare at entry that a reconciliation will follow.¹ Flagging an entry stops CBP from liquidating it on the estimates alone, and once you’ve flagged, reconciliation is the exclusive route for correcting those estimated figures.²

What Can Be Reconciled

Only four categories of entry data are eligible.³

Value under 19 U.S.C. § 1401a, including price paid plus adjustments for assists, royalties, selling commissions, and packing. This is the most common use, because those costs are often unknown at entry.⁴
Classification, but only when a ruling request, protest, or court action is pending. Uncertainty about the right code is not enough on its own.
HTSUS Heading 9802 entries involving American-origin goods returned after foreign assembly, where the importer needs to document domestic component value to reduce the dutiable amount.
Free Trade Agreement claims under 19 U.S.C. § 1520(d), which allows reliquidation and refund of excess duties when a qualifying certificate of origin is filed within one year of importation.⁵

Anything else falls outside the program. Antidumping and countervailing duties, in particular, are not eligible issues under the current prototype, even though § 1484 contemplates AD/CVD reconciliation elsewhere.¹

Which Entries You Can Flag

The ACE Reconciliation Prototype accepts three entry types:³ Type 01 standard consumption entries (free and dutiable), Type 02 quota and visa consumption entries, and Type 06 Foreign Trade Zone consumption entries. FTZ entries containing AD/CVD merchandise are excluded. Temporary importations under bond, warehouse withdrawals, and other entry types cannot be flagged at all.

Bond Requirements to Participate

There is no application form and no formal agreement. You need two things on file: a valid continuous bond, and a reconciliation bond rider covering each importer of record number (including the two-digit suffix).³ With both in place, you’re eligible.

The rider extends your continuous bond to cover any additional duties, taxes, or fees that surface when the final numbers come in. Your broker or surety adds it to the existing bond. Size the coverage against the total potential duty exposure across every entry you plan to flag. The statute requires bond or other security before you can file any reconciliation.¹

Aggregate or Entry-by-Entry Filing

When you file the reconciliation you pick one of two methods, and the choice is permanent.⁶ Entry-by-entry filing (code “E”) tracks revenue changes at both summary and line level for each underlying entry, and it preserves your right to claim drawback on the reconciled amounts. Aggregate filing (code “A”) tracks changes only at the line level and permanently forfeits any future drawback claim on those entries.

If you don’t work with drawback, aggregate is simpler. If drawback is part of your business, entry-by-entry is the only way to keep it available. You cannot switch after filing.

Deadlines for Filing

Deadlines run from the oldest flagged entry in the reconciliation and depend on the issue:³

Value, classification, and 9802: 21 months from the entry summary date of the oldest flagged entry. This deadline is set by statute.¹
Free Trade Agreements: 12 months from the importation date of the oldest flagged entry.

The reconciliation itself is filed as Entry Type 09, transmitted electronically through the Automated Broker Interface into ACE.⁶ The filing must include an association file identifying, by filer code and entry number, every underlying entry summary being reconciled. If the final figures show additional duties owed, payment is due at filing. If you overpaid, CBP processes a refund.

Interest and Liquidation

Interest on additional duties runs from the date you deposited estimated duties through the date the reconciliation is liquidated or reliquidated. Interest on overpayments runs the same way, with CBP paying you from the deposit date to liquidation. The Secretary sets the rate.⁷ A balance still unpaid more than 30 days after liquidation becomes delinquent and accrues additional interest in 30-day increments until paid.

Once CBP accepts and reviews the filing, it liquidates the reconciliation entry. That liquidation is the final legal determination of duty liability on those transactions.

Records You Must Keep

Under 19 U.S.C. § 1508, all supporting documents must be kept for up to five years from the date of entry or the date the reconciliation is filed, whichever applies.⁸ That includes commercial invoices, revised HTS codes when classification is at issue, and the final valuation documentation replacing your original estimates.

If CBP demands records and you can’t produce them due to negligence, the penalty is up to $10,000 or 40% of appraised value per release, whichever is less. Willful failure raises the ceiling to $100,000 or 75% of appraised value per release.⁹

Penalties for Missing a Deadline or Filing Inaccurately

Flagging creates an obligation. If you flag entries and then never file, CBP does not let the matter drop. The agency expects either a timely reconciliation or a “no change” filing confirming the estimates were correct. Doing neither exposes you to liquidated damages against your bond.¹⁰ If you cannot meet a deadline, request an extension of liquidation from CBP rather than let it pass.

Inaccurate reconciliations carry the same penalty exposure as any other entry. Under 19 U.S.C. § 1592, penalties are tiered by culpability:¹¹

Negligence: up to the lesser of the domestic value of the merchandise or two times the lost duties and fees. Where the error didn’t affect duty, the cap drops to 20% of dutiable value.
Gross negligence: up to the lesser of domestic value or four times lost duties. Where duties were unaffected, the cap is 40% of dutiable value.
Fraud: up to the full domestic value of the merchandise.

A prior disclosure filed before CBP opens a formal investigation sharply reduces the exposure. For negligence or gross negligence, prior disclosure limits the penalty to interest on the unpaid duties rather than a multiple of them. Genuine clerical errors are not treated as violations unless they form a pattern of negligent conduct.¹¹

Fixing or Protesting a Reconciliation After Filing

If you find an error after filing, the standard Post-Summary Correction process is not available. CBP’s PSC system does not include reconciliation entries among eligible entry types, and the reconciliation issue code itself cannot be changed through PSC on any entry.¹² Corrections have to be worked directly with the CBP Center of Excellence and Expertise handling your account.

To challenge how CBP liquidated the reconciliation, file a protest under 19 U.S.C. § 1514, which lists “reconciliation as to the issues contained therein” as a protestable decision.¹³ You have 180 days from the date of liquidation. A denied protest can be escalated to the U.S. Court of International Trade. Miss the 180 days and the liquidation is final and conclusive.

1
Office of the Law Revision Counsel. 19 USC 1484 – Entry of Merchandise
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U.S. Customs and Border Protection. Reconciliation
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U.S. Customs and Border Protection. Reconciliation
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Office of the Law Revision Counsel. 19 USC 1401a – Value
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Office of the Law Revision Counsel. 19 USC 1520 – Refunds and Errors
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U.S. Customs and Border Protection. ACE ABI CATAIR – Reconciliation Entry Summary Create/Update
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Office of the Law Revision Counsel. 19 USC 1505 – Payment of Duties and Fees
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Office of the Law Revision Counsel. 19 USC 1508 – Recordkeeping
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Office of the Law Revision Counsel. 19 USC 1509 – Examination of Books and Witnesses
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U.S. Customs and Border Protection. Trade Reconciliation Webinar Questions and Answers May 12, 2022
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Office of the Law Revision Counsel. 19 USC 1592 – Penalties for Fraud, Gross Negligence, and Negligence
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U.S. Customs and Border Protection. Post Summary Corrections
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Office of the Law Revision Counsel. 19 USC 1514 – Protest Against Decisions of Customs Service