CBP reconciliation for flagged entries: what can be flagged, the clocks per entry and how to find them in an export

What is reconciliation, and when does an importer use it?

Some entry elements cannot be known when the entry summary is filed: a related-party price that is trued up at year end, the cost of foreign repairs under heading 9802 that is invoiced later, a classification that depends on a ruling still pending, or a trade-agreement claim waiting for origin evidence. Reconciliation is the statutory way to file with the best information available and settle the rest later.

19 U.S.C. 1484(b)(1) lets a party "elect to file a reconciliation with regard to such entry elements as are identified by the party". CBP runs it as the ACE Reconciliation Prototype, a test under 19 CFR 101.9(b) announced in the Federal Register on February 6, 1998 (63 FR 6257). CBP's ACE Reconciliation External Guidance (version 2.0, August 2020) says the test began on October 1, 1998, was extended indefinitely from October 1, 2000, and moved from the old system to ACE on February 24, 2018. CBP's Reconciliation page says any party electing to reconcile entries under 1484(b) "may do so only through this prototype", and that the prototype is the exclusive means for post-summary adjustments to value, heading 9802, certain classification changes and free trade agreements.

The mechanics have three steps:

1. Flag. When the entry summary is filed and the estimated duties deposited, the filer sets an electronic flag naming the issue. Flags can be set entry by entry or as a blanket flag the importer or broker programs; CBP stopped applying blanket flags on importers' behalf from January 14, 2017 (81 FR 89486).
2. Liquidate the underlying entry. CBP liquidates the flagged entry "for all aspects of the entry except those issues that were flagged". A protest of that liquidation covers the unflagged issues.
3. File the type 09. The reconciliation entry carries the final information for the flagged issues. It is "treated as an entry for purposes of liquidation, reliquidation, and protest", and its protest may only address the flagged issues.

Participation is open to any importer without an application, as long as it has a continuous bond and a reconciliation bond rider on file for each importer number, suffix included (ACE Reconciliation FAQ). The rider has to be valid when the entries are flagged, not when the type 09 is filed. CBP's guidance adds that the rider is tied to the continuous bond rather than to an importer number, so one rider on a bond covers every importer number on that bond, and that all flagged entries on one reconciliation must share the same surety and continuous bond. Non-ABI manual filers cannot use it.

What can be flagged, and on which entry types?

The eligible entry types are 01, 02 and 06. Quota/visa entries can be reconciled for everything except classification. Zone entries with antidumping or countervailing duty merchandise are not eligible, and a zone entry can carry a trade-agreement flag only if the product qualified in the condition in which it entered the zone. An entry can carry several flags at once. AD/CVD reconciliation is provided for in the statute with its own 90-day clock, but CBP's page lists only the four issues above.

Size a USMCA claim with the fee in it. CBP's July 1, 2020 notice (85 FR 39576) said the USMCA Implementation Act excluded MPF from refunds under 1520(d), so a USMCA reconciliation would refund duty but not the fee. That carve-out did not last: the Consolidated Appropriations Act, 2021 (Pub. L. 116-260, December 27, 2020) amended 1520(d), and CBP's CSMS 45309245 (December 29, 2020) says it authorizes CBP to refund the fee on USMCA post-importation claims, naming 520(d) and reconciliation claims, retroactively to July 1, 2020. The 2020 notice also says the certification of origin need not be presented with the type 09 but must be in the importer's possession.

Which clocks run on a flagged entry?

Three details change how the clocks behave in practice:

• The oldest entry sets the deadline for the whole reconciliation. A single type 09 can cover up to 9,999 underlying entries, so an importer that groups a year of flagged entries on one reconciliation is bound by the first one.
• There are no extensions. CBP's page says so plainly. The date CBP receives the type 09 is the date the filer gets the "Recon Accepted Error Free" message, but CBP's guidance says a type 09 with money due is not timely until the payment is received. If the information is still not in hand at the deadline, the guidance's route is to file on time with the best available information and ask the assigned Center in writing to extend liquidation of the type 09; that route cannot carry a trade-agreement claim past one year from importation.
• A trade-agreement flag needs no type 09 if there is no refund to claim. Value, classification and 9802 flags do: a no-change reconciliation must still be filed, as an aggregate entry listing only the underlying entry numbers (81 FR 89486). Where an entry has both an FTA flag and a value flag, CBP recommends filing the FTA reconciliation first so the special program indicator is established.

Compare these with the clocks on an unflagged entry in how long you have to fix a past entry: a value issue that could only be corrected within the post-summary correction window, or protested within 180 days of liquidation, stays open for 21 months from the oldest summary date when it is flagged.

How does interest work on a reconciliation?

19 U.S.C. 1505(c) ties interest to the reconciliation, not only to the underlying entry. Interest on an underpayment accrues "from the date the importer of record is required to deposit estimated duties, fees, and interest to the date of liquidation or reliquidation of the applicable entry or reconciliation". Interest on an overpayment accrues from the date of deposit or, for a 1520(d) claim, from the date the claim is made. The same section allows CBP to prescribe a mid-point interest method based on aggregate data, and CBP publishes guidance on reconciliation interest calculations alongside its Reconciliation page.

For a finance team that means two things. A flagged value increase is a known liability that accrues interest from each entry's deposit date until the type 09 liquidates, often two years or more. And a flagged decrease earns interest over the same span, which is one reason to file it promptly rather than wait for the deadline.

Worked line: a related-party value flag on a stacked line

A steel article entered on May 12, 2026, HTS 7208.39.00, general rate Free, with the Section 232 duty that Proclamation 11021 applies at 50 percent to the full customs value of steel articles entered from April 6, 2026 (clauses 1 and 2(a)). The buyer and seller are related, and the transfer-pricing policy sets the final price at year end, so the entry is flagged for value.

The adjustment is 5 percent of value, but every ad valorem layer on the line moves with it, and here the Chapter 99 layer is the only duty there is. Had the adjustment gone the other way, the same table would show a $10,000 refund with interest, and the guidance requires an entry-by-entry type 09 to get it: an aggregate reconciliation may report a decrease only if the importer waives the refund. At $400,000 the entry is above the value at which the MPF reaches its fiscal-year maximum ($651.50 for entries dated in fiscal year 2026, reached at $188,077.37), so the fee does not change; on a smaller entry it would, as the MPF and HMF page shows. The oldest flagged entry in this example sets the 21-month deadline: an entry summary dated May 2026 means the type 09 is due in February 2028. Check the stack for any entry date with the duty calculator.

What goes into a related-party price, and which adjustments count, is in what counts in customs value.

How do you find flagged and should-have-been-flagged entries in an export?

The flag is set on the entry summary, so ask your broker for an export that includes it at entry level, with the issue or issues flagged; field names vary by broker. Then build three lists.

1. Flagged and still open. Every entry with a flag, its entry summary date (or importation date for FTA flags), the issue flagged and the reconciliation it belongs to. Compute each reconciliation's deadline from its oldest entry and sort by date. Anything inside six months is urgent, because there are no extensions.
2. Flagged and never reconciled. Flagged entries whose deadline has passed with no type 09 on file. 19 U.S.C. 1504(a)(1)(D) runs the reconciliation's liquidation clock from the date the reconciliation should have been filed. For value, classification and 9802 flags, CBP's guidance says it issues one consolidated no-file liquidated damages claim per importer, surety, bond and month, covering every flagged entry not reconciled by its deadline that month; filing a type 09 for exactly those entries, with the duties, fees and interest due, is the petition for mitigation. A large claim can use up the bond and suspend flagging until the bond is raised or the claim paid. An unfiled trade-agreement reconciliation draws no liquidated damages; the importer only loses the 1520(d) claim. Take each one to your broker or counsel.
3. Should have been flagged. Unflagged entries where the value or claim was not final at filing:
   • related-party purchases under a transfer-pricing policy with year-end adjustments;
   • assists, royalties or license fees paid on a schedule that does not match the shipments;
   • 9802 entries where the foreign repair or processing cost was estimated;
   • entries where an origin certification arrived after filing and a trade-agreement claim was still possible;
   • lines whose classification is under protest or awaiting a ruling.

For entries on the third list that are still unliquidated, ask whether CBP would grant a retroactive flag; the request must reach CBP at least 60 days before the scheduled liquidation date, and the decision is discretionary. Otherwise the correction routes are the ordinary ones: a post-summary correction before liquidation, a protest after it, or a prior disclosure for an underpayment.

Value differences found on unflagged related-party entries are findings in either direction. An upward adjustment that was never reported is an underpayment, and the reconciliation notices themselves draw the line between identifying undeterminable information and disclosing a violation. If the adjustment was knowable and not reported, the route may be prior disclosure, not reconciliation.

How does reconciliation affect IEEPA refunds and other recoveries?

A flagged entry stays partly open until its type 09 liquidates, which matters when a recovery depends on liquidation status. CBP's CSMS 69066837 of June 29, 2026 lets importers include in a CAPE declaration entries flagged for reconciliation (types 01, 02 and 06) for which the type 09 has not been filed, limited to unliquidated entries and entries liquidated within 80 days of the declaration. The routes for each case are in IEEPA refunds: which entries qualify.

Zone entries can be flagged too, within the limits above; foreign trade zone entries and stacked tariffs covers how type 06 lines are rated.

What should you do next on your own entries?

Pull every 01, 02 and 06 entry for the last 24 months with its reconciliation flag, summary date and importation date. Group the flagged entries by the reconciliation they will go on, compute each deadline from the oldest entry, and list the related-party, assist, royalty and 9802 entries that carry no flag. Hand the lists to your broker, who files the type 09; confirm the treatment of any missed or retroactive flag with your broker or customs counsel.

TariffSense reads entry summaries and broker exports and checks each line's value, classification and Chapter 99 stack against the measures in force on its entry date, so the effect of a value change on every duty layer is visible line by line. The post-entry audit guide covers the other checks on each line.