| Title: | INFO: RECONCILIATION PROTOTYPE |
|---|---|
| Date: | 1999-03-02 |
| To: | abi |
| Links: | previous, next |
TO : ALL ABI BROKERS.
FROM : DON LUTHER
SUBJECT : INFO: RECONCILIATION PROTOTYPE
DATE : 02/19/1999
NEWS ABOUT THE ACS RECONCILIATION PROTOTYPE
MID-POINT INTEREST
THE UNITED STATES HOUSE OF REPRESENTATIVES HAS PASSED A
LEGISLATIVE PACKAGE THAT INCLUDES THE PROVISION FOR MID-POINT
INTEREST CALCULATION ON RECONCILIATIONS. THE ACT IS PENDING IN
THE SENATE, WITH ACTION EXPECTED SOON. IF THIS STATUTORY CHANGE
MATERIALIZES, CUSTOMS WILL ALLOW THE USE OF MID-POINT DATE
CALCULATION OF INTEREST FOR RECONCILIATIONS, RATHER THAN
REQUIRING THE MORE LABOR-INTENSIVE ENTRY-BY-ENTRY CALCULATION
CURRENTLY REQUIRED BY LAW. IMPORTERS FILING RECONCILIATIONS WILL
HAVE THEIR CHOICE OF WHICH METHOD THEY USE IN CALCULATING
INTEREST THEY PAY TO CUSTOMS.
VALUE DECREASES REPORTABLE ON AGGREGATE RECONCILIATIONS
IN AN UPCOMING FEDERAL REGISTER NOTICE, CUSTOMS WILL ANNOUNCE A
SIGNIFICANT ENHANCEMENT TO THE ACS RECONCILIATION PROTOTYPE.
PARTICIPANTS WILL BE ALLOWED TO REPORT DOWNWARD VALUE ADJUSTMENTS
VIA AGGREGATE RECONCILIATIONS, SUBJECT TO CERTAIN CONDITIONS.
THE AGGREGATE RECONCILIATION, WHERE IMPORTERS DO NOT REPORT
ADJUSTMENTS ON A PER-ENTRY BASIS, IS CURRENTLY ALLOWED ONLY FOR
INCREASES OR NO-CHANGE IN DUTIES, TAXES, AND FEES. THIS NEW
OPTION WILL ALLOW THE IMPORTER TO REPORT DECREASES IN VALUE VIA
AN AGGREGATE RECONCILIATION, ON THE CONDITION THAT THEY WAIVE ANY
REFUND THAT WOULD BE ASSOCIATED WITH THE DECREASES IN VALUE.
THIS OPTION IS MADE AVAILABLE IN THE SPIRIT OF THE "MENU
APPROACH" OF THE PROTOTYPE. SOME IN THE TRADE COMMUNITY HAVE
SAID THAT TRACKING SMALL DECREASES IN VALUE TO INDIVIDUAL ENTRIES
IS MORE COSTLY THAN THE REFUND THEY WOULD RECEIVE, AND IN SUCH
CASES, THEY WOULD GLADLY WAIVE THE REFUND IN ORDER TO TAKE
ADVANTAGE OF THE EASIER AGGREGATE METHOD OF RECONCILIATION.
REFUNDS OF MONIES IN THE AGGREGATE IS NOT POSSIBLE FOR FISCAL
REASONS, (I.E. PREVENTING DOUBLE REFUNDS IN THE CASE OF DRAWBACK
AND THE LIKE.)
IMPORTERS WHO DO WANT TO OBTAIN RECONCILIATION REFUNDS TO WHICH
THEY ARE ENTITLED MAY STILL USE THE ENTRY-BY-ENTRY RECONCILIATION
AS WAS ALLOWED BEFORE. THE CHANGE DISCUSSED HERE ONLY ADDS A NEW
OPTION.
IMPORTERS AND OTHER INTERESTED PARTIES MUST BE AWARE THAT THE
PROHIBITION AGAINST NETTING ON AGGREGATE RECONCILIATION IS STILL
IN EFFECT. WHILE UPWARD AND DOWNWARD VALUE ADJUSTMENTS WILL BE
ALLOWED ON A SINGLE AGGREGATE RECONCILIATION, THEY WILL BE
REPORTED IN SEPARATE SECTIONS OF THE SPREADSHEET, AND IMPORTERS
MAY NOT NET DECREASES AGAINST INCREASES.
SPECIFICS OF HOW THESE CHANGES ARE TO BE REPORTED WILL BE MADE
AVAILABLE IN THE UPCOMING FEDERAL REGISTER NOTICE, AND ON THE
RECONCILIATION INFORMATION PAGE OF THE CUSTOMS WEBSITE.
THE ACS RECONCILIATION PROTOTYPE IS THE FIRST FULL-SCALE
OPERATIONAL TEST OF THE ENTRY RECONCILIATION CONCEPT PROVIDED FOR
BY THE CUSTOMS MODERNIZATION ACT. RECONCILIATION ALLOWS
IMPORTERS TO MAKE ENTRY OF MERCHANDISE WHEN CERTAIN INFORMATIONAL
ELEMENTS, SUCH AS DUTIABLE VALUE, ARE NOT FULLY DETERMINED. THE
IMPORTER FILES A RECONCILIATION ENTRY UP TO 15 MONTHS LATER,
WHICH FINALIZES THE DATA AND MAKES THE APPROPRIATE FINANCIAL
ADJUSTMENTS. A RECONCILIATION CAN SERVE TO AMEND THOUSANDS OF
UNDERLYING ENTRIES AT ONCE.
OVER 1000 IMPORTERS OF RECORD HAVE APPLIED FOR PARTICIPATION IN
THE PROTOTYPE. TO DATE, MORE THAN 200,000 ENTRY SUMMARIES HAVE
BEEN FLAGGED FOR RECONCILIATION. ON FEBRUARY 3RD, 1999, CUSTOMS
ANNOUNCED THE READINESS OF ABI TO ACCEPT TEST FILING OF THE TYPE
'09' RECONCILIATION ENTRY.
FOR MORE INFORMATION ON RECONCILIATION, VISIT THE CUSTOMS WEBSITE
RECONCILIATION PAGE OR CALL SHARI MCCANN AT (202) 927-1106 OR DON
LUTHER AT (202) 927-0915.