Customs Reconciliation Entries: How to Flag an Entry Before the Value Is Final

A related-party importer enters goods weekly at a transfer price that is final only when the group closes its books. A classification question sits at CBP Headquarters as a ruling request. Either way, the entry summary has to be filed now, with a number nobody can yet confirm.

CBP's Reconciliation program is the mechanism built for that gap. The importer files the entry summary on its best available information, places an electronic "flag" on the elements it cannot yet determine, deposits duty on the estimate, and later files a reconciliation entry, entry type 09, that settles the flagged issues for up to 9,999 entry summaries at once, with a single bill or refund. CBP allows four flags: value, classification, 9802 and FTA. Value, classification and 9802 must be reconciled within 21 months; FTA claims within 12 months of importation. There are no extensions.

For a finance team at a multinational running thousands of related-party entries a year, that is the difference between one type 09 and a correction on every entry. GingerControl is a trade compliance AI platform; its Tariff Calculator breaks the duty on a line into its components, which is the number a value adjustment moves. GingerControl does not flag entries or file reconciliations; the importer of record or its licensed broker does.

Last updated: October 2026

What is a customs reconciliation entry?

A reconciliation entry is a separate entry that delivers, after the fact, the elements of an entry summary that were undeterminable at filing. The legal basis is 19 U.S.C. 1484(b), added by the Customs Modernization Act:

"A party may elect to file a reconciliation with regard to such entry elements as are identified by the party pursuant to regulations prescribed by the Secretary. If the party so elects, the party shall declare that a reconciliation will be filed."

The same subsection caps the window: the reconciliation must be filed "not later than 21 months after the date the importer declares his intent to file the reconciliation," and the importer must post bond first.

Per CBP's guidance, the program runs as a National Customs Automation Program prototype test under 19 CFR 101.9(b), which lets CBP set test requirements by Federal Register notice. Per CBP's ACE Reconciliation External Guidance, Version 2.0 (August 2020), the test began on October 1, 1998, was extended indefinitely from October 1, 2000, and moved to ACE on February 24, 2018. The guidance is the operating manual, and CBP's Reconciliation program page (last modified June 1, 2023) summarizes it.

Three features make the mechanism distinct from every other post-entry route:

1. It is chosen before the number is known. The flag is set at entry summary, as the importer's notice of intent. A PSC, a protest or a 1520(d) petition all react to an error already made.
2. Flagging splits the entry. CBP liquidates the flagged entry summary for everything except the flagged issue. The flagged issue liquidates later, with the type 09.
3. It aggregates. One type 09 can cover up to 9,999 flagged entry summaries, and CBP issues one bill or one refund.

Which issues can you flag for reconciliation, and which can you not?

CBP's guidance limits the flag to four issues. Everything else that was knowable at entry has to be right at entry.

Bottom line: For a compliance manager deciding what to flag at the start of a fiscal year, the useful test is whether the number is unknowable at entry for a documented reason. Year-end transfer pricing true-ups, assists apportioned after production and U.S.-content ratios that settle at quarter end pass that test. Freight, quantity and supplier do not; CBP's guidance names all three as non-reconcilable.

Eligible entry types are electronically filed 01, 02 and 06. Under CBP's guidance, type 02 cannot be flagged for classification, and a type 06 foreign-trade zone entry cannot be flagged if it carries AD/CVD merchandise. Note that 19 U.S.C. 1484(b) also contemplates reconciliation for AD/CVD, but AD/CVD is not one of the four issues the current prototype accepts.

Two details trip importers. First, a value flag does not relax the duty to file a good estimate: CBP's guidance says the importer "must exercise reasonable care to provide a good faith value estimate, and deposit the corresponding appropriate duties, taxes, and fees at the time of entry summary." Second, the FTA flag is optional to act on. Except for FTA, the guidance says flagging "creates an obligation on the importer of record to file a Reconciliation entry resolving the flagged issue(s) regardless of where there are any changes." Our guide to the unclaimed FTA preference audit covers the 1520(d) side, and the 9802 and 9801 U.S.-content program guide covers how the 9802 claim is built in the first place.

Should you flag entry by entry, or blanket flag?

Either works, but CBP no longer does the blanket flagging for you. The program page states: "CBP will no longer apply blanket flags to underlying entries. Importers who wish to blanket flag entries must coordinate with their broker(s) in order to continue flagging in that manner. Importers can either flag each entry by entry manually or program software to perform blanket flagging."

The trade-off is between coverage and obligation:

• Blanket flagging through the broker's software means no eligible entry is missed. It also means every flagged entry carries a filing obligation, so a type 09 is owed on all of them, including a "no change" reconciliation for entries where nothing moved.
• Entry-by-entry flagging keeps the obligation narrow, but an entry left unflagged by mistake is hard to fix. CBP will flag retroactively only on an email request to the importer's Center of Excellence and Expertise made at least 60 days before scheduled liquidation, and the guidance says CBP "intends to grant these requests sparingly and only as a courtesy." Liquidated entries cannot be flagged at all.

Per the guidance, repeated requests to change flags can be read as "a lack of reasonable care," so the flagging rule belongs in a written broker procedure set before the period opens.

What is the 21-month clock, and what happens if you miss it?

The clock runs from the oldest entry summary on the reconciliation. CBP's program page sets the deadline at "twenty-one (21) months from the date of entry summary of the oldest entry summary flagged" for value, classification and 9802, and "twelve (12) months from the date of importation of the oldest entry summary flagged" for FTA. It adds: "No extensions will be allowed on the deadlines for filing Reconciliations."

Quotable insight: The reconciliation deadline is set by the first entry of the period, not the last. An importer that groups a full year of value-flagged entries onto one type 09 has 21 months from the January entry, not from the December one, so the clock that matters starts the week the fiscal year opens. For a calendar-year transfer pricing policy, a January 15 entry summary sets an October 15 deadline the following year, regardless of when the true-up is booked.

If the data is still not ready when the deadline arrives, the guidance gives one route: file the type 09 on time with the best available information, and send a written request to the assigned Center asking CBP to extend liquidation of the reconciliation entry. That route is not available for FTA beyond one year from importation.

Missing the deadline is expensive in a specific way. For value, classification and 9802 flags, CBP issues a consolidated no-file liquidated damages claim per importer, per surety, per bond, per month, covering every flagged entry summary not reconciled by its deadline. Filing the type 09 with all duties, fees and interest serves as the petition for mitigation. The guidance warns that a no-file claim "could saturate the importer's bond" given the value on flagged entries, which can suspend flagging until the bond is increased or the claim paid. For FTA flags there are no liquidated damages; the importer only loses the 1520(d) claim. CBP's free ACE report ES-501 lists flagged entries with no type 09 on file.

How do you join the program, and what does the bond rider do?

There is no application. CBP's Reconciliation FAQ (last modified September 30, 2024) states: "There is no application process to participate; all importers are eligible if they have a valid continuous bond and a valid Reconciliation bond rider on file."

What the guidance requires of the bond:

1. A continuous bond plus a reconciliation bond rider, valid when the entry summary is flagged. The rider does not have to be valid when the type 09 is filed.
2. The rider attaches to the continuous bond, not to an importer number, so one rider covers every importer of record number associated with that bond.
3. One surety and one continuous bond across the reconciliation. The bond number, rider number and importer number on the type 09 must match the flagged entry summaries.
4. Adequate coverage, which matters most when a no-file claim lands against a large flagged value.

The filing itself is customs business under 19 U.S.C. 1641. A broker filing a type 09 needs a valid license and a local or national permit, and all type 09s go through ABI; CBP's FAQ says reconciliation "is not an option for Non-ABI manual filers." Our customs bonds guide covers continuous bond sizing.

How does reconciliation handle transfer pricing adjustments?

This is where the program earns its keep. CBP's ruling HQ W548314 (May 16, 2012) allows post-importation transfer pricing adjustments, upward and downward, to count toward transaction value when the group's policy meets five conditions set out in the ruling. On the vehicle for those adjustments, the ruling is direct:

"CBP recognizes the various concerns presented by the trade community and agrees that while Reconciliation is the most efficient mechanism for claiming these adjustments the use of Reconciliation is not mandatory. CBP strongly encourages importers who may anticipate post-importation adjustments to use the Reconciliation program."

It also sets the cost of going without: "If importers claim the adjustments outside of the Reconciliation program, they are expected to demonstrate at the time of entry that the price is at arm's length and to provide supporting information."

Without reconciliation, the guidance describes the only other lawful method: "each import shipment must be individually appraised and adjustments applied to the individual entries." In practice that means a PSC on each unliquidated entry, a protest for refunds on entries that have already liquidated, and a prior disclosure for additional duty owed on them. A hypothetical case shows the scale.

Bottom line: For a tax and trade team at a multinational with 2,400 related-party entries a year, a 4 percent true-up at a hypothetical 9 percent rate moves $216,000 of duty either way. Flagged for value, it settles on one type 09. Unflagged, it becomes thousands of entry-level filings across three procedures. Use the real rates and entry counts, not these. GingerControl identifies and documents the opportunity; your licensed broker or counsel files.

Two rules shape a downward true-up. A refund requires an entry-by-entry reconciliation; an aggregate type 09 reporting a decrease is allowed only if the importer waives the refund. And netting is limited: an increase on one entry cannot offset a decrease on a different entry, although lines within the same entry may offset as long as the entry as a whole shows an increase. The five-factor test and the tax-versus-customs tension are covered in our transfer pricing and customs valuation guide.

How does reconciliation compare with a PSC, a protest or a 1520(d) petition?

They are not substitutes. Each fits a different moment and a different kind of fact.

Bottom line: For a compliance lead choosing a correction route for a value change, the deciding question is whether the value was knowable at entry. If it was, a PSC or protest fits, and CBP's guidance warns that "importers that excessively use PSC's may be penalized for failing to exercise reasonable care." If it was not, reconciliation is the route designed for it. Our guide to recovering overpaid import duties maps the after-the-fact routes. GingerControl identifies and documents the opportunity; your licensed broker or counsel files.

One 2026 interaction matters for IEEPA refunds. Per CSMS # 69035485, sent June 23, 2026, CAPE accepts entries flagged for reconciliation (types 01, 02 and 06) from June 29, 2026, only where the type 09 has not been filed and, as in CAPE's first phase, only for unliquidated entries and entries within 80 days of liquidation, and "the CAPE process removes the IEEPA duties from the flagged entries prior to the filing of the reconciliation entry." Entries with a reconciliation already on file are excluded "in this phase." Check for later CAPE phases before acting on this.

When is reconciliation the wrong answer?

Reconciliation is voluntary, and CBP's guidance lists the alternatives in its own section. It is the wrong tool when:

• The issue was knowable at entry. Freight charges, quantity and supplier cannot be flagged, and flagging determinable information is listed as a violation.
• The adjustment is a latent defect found after importation. The guidance excludes it from the value flag.
• The classification question has no pending ruling, protest or court action. Without one, there is nothing to flag.
• The importer cannot run the discipline. Tracking flagged entries and filing on time are, in CBP's words, "solely the responsibility of the importer." An importer without a calendar, a broker procedure and a monthly ES-501 check is building liquidated damages exposure.
• Adjustments are rare and small. CBP's listed alternatives include extending liquidation and adjusting entries individually.

Where this fits in your entry review

Reconciliation solves a timing problem. It does not tell an importer which entries carry value that is still moving, or how much duty rides on it.

GingerControl's Tariff Calculator returns the full U.S. tariff stack for an HTS code, origin and entry date, with each component broken out, so a team can size what a value adjustment moves on a given line. GingerControl's HTS Classification Researcher produces GRI reasoning with CROSS ruling citations, which is the documentation a pending classification ruling request rests on. Neither flags entries nor files anything with CBP.

For importers who want their import entries and duty payments audited, flagged entries included, a GingerControl compliance audit is the starting point. GingerControl identifies and documents the opportunity; your licensed broker or counsel files.

References

1. U.S. Code, 19 U.S.C. 1484, Entry of merchandise, subsection (b), Reconciliation. GovInfo, 2023 edition. Retrieved 9 October 2026.
2. U.S. Customs and Border Protection, Reconciliation program page. Last modified 1 June 2023. Retrieved 9 October 2026.
3. U.S. Customs and Border Protection, ACE Reconciliation External Guidance, Version 2.0, Publication 1197-0820, August 2020. Retrieved 9 October 2026.
4. U.S. Customs and Border Protection, ACE Reconciliation Frequently Asked Questions. Last modified 30 September 2024. Retrieved 9 October 2026.
5. U.S. Customs and Border Protection, HQ W548314, May 16, 2012, Transaction Value; Formulas; Post-Importation Adjustments; Revocation of HRL 547654. Retrieved 9 October 2026.
6. eCFR, 19 CFR 101.9, Test programs or procedures. eCFR up to date as of 6 October 2026. Retrieved 9 October 2026.
7. U.S. Customs and Border Protection, CSMS # 69035485, UPDATE, CAPE for IEEPA Refunds, Entries Flagged for Reconciliation, sent 23 June 2026. Retrieved 9 October 2026.