CSMS Message: 04-001997

TO : ALL ABI BROKERS.

FROM : RICHARD B WALLIO

SEPTEMBER 7, 2004

TO: DIRECTORS, FIELD OPERATIONS

FROM: EXECUTIVE DIRECTOR, TRADE COMPLIANCE AND
FACILITATION, OFFICE OF FIELD OPERATIONS

SUBJECT: EXPANSION OF RECONCILIATION PROTOTYPE BENEFITS

THE PURPOSE OF THIS MEMORANDUM IS TO INFORM CUSTOMS AND BORDER
PROTECTION (CBP) AND INTERESTED IMPORTING PARTIES OF THE EXPANSION
OF THE RECONCILIATION PROTOTYPE TO ALLOW POST-ENTRY IMPORTATION CLAIMS
ARISING UNDER THE UNITED STATES-CHILE FREE TRADE AGREEMENT (US-CFTA).

BACKGROUND:

A FEDERAL REGISTER NOTICE DATED SEPTEMBER 2, 2004 ANNOUNCED THAT A
POST-ENTRY 1520(D) CLAIM FOR PREFERENTIAL TARIFF TREATMENT UNDER THE
US-CFTA CAN BE MADE UNDER THE RECONCILIATION TEST IN THE SAME WAY AS
A POST-ENTRY NAFTA CLAIM.

THIS ALTERNATIVE REQUIRES THAT AN IMPORTER FOLLOW THE RECONCILIATION
TEST PROCEDURE, WHICH REQUIRES ACTION AT THE TIME OF ENTRY. THAT ACTION
IS TO FLAG THE ENTRY SUMMARY FOR RECONCILIATION AND LATER FILE A
RECONCILIATION ENTRY WITHIN ONE YEAR OF THE APPLICABLE IMPORTATION.
AS PROGRAMMING FOR US-CFTA RECONCILIATION IS NOT YET COMPLETE, FOR THE
TIME BEING, A PARTICIPANT WISHING TO FILE A US-CFTA RECONCILIATION MUST
FOLLOW THE NAFTA RECONCILIATION PROCESS BY FLAGGING THE ENTRY SUMMARY
FOR NAFTA AND PLACING "CFTA" IN THE REMARKS FIELD OF THE HEADER FIELD.
WHEN PROGRAMMING IS COMPLETE, PARTICIPANTS WILL BE NOTIFIED WITH
INSTRUCTIONS ON HOW TO MAKE A POST-ENTRY US-CFTA RECONCILIATION CLAIM.

CBP EMPHASIZES THAT ONCE AN IMPORTER FLAGS AN ENTRY SUMMARY FOR
US-CFTA ISSUES UNDER THE RECONCILIATION TEST, THE ONLY MEANS OF
PERFECTING THE US-CFTA CLAIM IS BY COMPLETING THE RECONCILIATION
PROCESS BY FILING A TIMELY RECONCILIATION ENTRY. THE SEPTEMBER 27,
2002 FEDERAL REGISTER NOTICE PROVIDES EXPLANATION OF THIS SAME
LIMITATION RELATIVE TO NAFTA ISSUES. IN THIS WAY, THE FLAGGING OF
AN ENTRY SUMMARY CONSTITUTES A COMMITMENT BY THE IMPORTER TO PERFECT
THE US-CFTA 1520(D) CLAIM THROUGH THE RECONCILIATION PROCESS. THUS,
ONCE A RECONCILIATION PROGRAM PARTICIPANT FLAGS AN ENTRY SUMMARY TO
MAKE A US-CFTA 1520(D) CLAIM UNDER THE RECONCILIATION PROCESS, CBP WILL
NOT ACCEPT A CLAIM FILED UNDER THE ORDINARY SECTION 1520(D) PROCEDURE.

CBP NOTES THAT A NAFTA 1520(D) CLAIM AND A US-CFTA 1520(D) CLAIM
CANNOT BE MADE TOGETHER ON THE SAME RECONCILIATION ENTRY. THEY MUST BE
FILED AS SEPARATE RECONCILIATION ENTRIES.

CBP RECOMMENDS THE USE OF THE RECONCILIATION TEST FOR MAKING POST-
ENTRY US-CFTA CLAIMS BECAUSE THE TEST PROCEDURE PROVIDES THE IMPORTER
WITH SEVERAL BENEFITS. FIRST, USING THE TEST PROCEDURE IS A SIMPLER
MEANS OF FILING CLAIMS: I.E., THE IMPORTER IS ABLE TO MAKE POTENTIALLY
THOUSANDS OF US-CFTA CLAIMS ON ONE RECONCILIATION ENTRY. SECOND, THE
IMPORTER CAN RECEIVE ONE CHECK FROM CBP RATHER THAN MANY UPON CBP
LIQUIDATION OF A RECONCILIATION ENTRY AND ISSUANCE OF A REFUND. THIRD,
BECAUSE PROCESSING US-CFTA CLAIMS UNDER RECONCILIATION IS SIMPLER
FOR CBP, THE REFUND DELIVERY SYSTEM IS MORE EFFICIENT. THE TEST
MODIFICATION DISCUSSED ABOVE WILL BE EFFECTIVE OCTOBER 4, 2004.
THE RECONCILIATION TEST PROCEDURE FOR MAKING POST-NAFTA CLAIMS IS
EXPLAINED IN THE FEBRUARY 6, 1998, AND THE DECEMBER 29, 1999, FEDERAL
REGISTER NOTICES.

ACTION:

THIS NOTICE SHOULD BE DISTRIBUTED TO ALL PORT DIRECTORS; ASSISTANT PORT
DIRECTORS, IMPORT AND ENTRY SPECIALISTS; BROKERS; IMPORTERS AND OTHER
INTERESTED PARTIES.

QUESTIONS FROM THE IMPORTING COMMUNITY CONCERNING THIS NOTICE SHOULD
BE REFERRED TO THEIR LOCAL CUSTOMS PORT OF ENTRY. THE CUSTOMS PORT
MAY REFER QUESTIONS TO RICHARD WALLIO, SUMMARY MANAGEMENT BRANCH, AT
(202) 344-2556, OR VIA E-MAIL.

/S/

ELIZABETH G. DURANT