Details of CBP's New Uniform Procedures for Entry Deletion & Entry/Summary Cancellation

September 22, 2011 by Marie Rapport|Customs and Ports

U.S. Customs and Border Protection has issued a new document entitled “Guidance on Entry Deletion and Entry or Entry Summary Cancellation” in order to provide uniform national procedures for requesting such actions in ACS and ACE, and for requesting entry substitutions for EIP/RLF and at land border ports. The Guidance includes a deletion/cancellation worksheet and also discusses liquidated damages.

Requests for deletion or cancellation that fall outside of the scope of these guidelines will be handled by CBP on a case-by-case basis.

(See ITT’s Online Archives or 09/21/11 news, 11092115, for BP summary announcing its availability.)

Highlights of this guidance document includes the following:

Worksheet for Cancellation & Deletion Requests

CBP provides as an attachment to the guidelines an “Entry Cancellation/Deletion Request” Worksheet for entries and entry summaries in the Automated Commercial System (ACS), the Automated Commercial Environment (ACE), and for Electronic Invoice(EIP)/Remote Location Filing (RLF) and land border port entry substitutions.

CBP states that its personnel must process all requests for deletion and cancellations as soon as possible. Entry deletions and entry summary cancellations performed more than ten days after cargo release may result in unnecessary liquidated damages cases.

Entry/Summary Cancellations -- CBP to Monitor for Excessive Use

Entry or entry summary cancellation refers to rendering entry summary data inactive in the system of record. It allows CBP to retain the entry summary data for historical purposes.

A request for entry or entry summary cancellation should be submitted to CBP as soon as the filer becomes aware of the need for the cancellation. The request for cancellation must be submitted on company letterhead stating the reason for the request (see Worksheet). Filers may not use a PEA coversheet for this purpose.

Filers should not wait for notification from CBP on outstanding entry summaries or for CBP to issue liquidated damages before filing such requests. The request should be submitted to the CBP office where the merchandise was entered and released. The only individual authorized to sign the request letter is the importer of record or an agent authorized to act on the importer's behalf (i.e., licensed customs broker with a valid power of attorney).

Valid reasons for cancellations include (but are not limited to) merchandise that has been seized, or certain merchandise denied admission by a participating government agency (PGA) after release from CBP custody. CBP will process any cancellation refund of duties, fees and taxes as an administrative refund, if eligible.¹

CBP states it will monitor filers for patterns of excessive or unnecessary requests and provide feedback via the informed compliance process under the Customs Modernization Act. However, CBP notes that there are many situations in which cancellation is a legitimate and acceptable action, as long as the filer provides documentation to substantiate the request. The cancellation process enables CBP to account for 21st century logistics and just-in-time inventory, as well as other government agency entry refusals.

Entry Deletions -- Very Limited Use

Entry deletion refers to completely removing entry data from the system of record. The entry information is no longer stored in the system of record once an entry is deleted.

Entry deletions should be used in very limited circumstances. CBP will only allow filers to delete entry data prior to cargo release processing. Once cargo release processing occurs and a provisional release notification is generated, the data is considered to be in CBP status. At this point, the entry or entry summary cancellation function must be used.

While deletions are not for entry summaries, in cases where the cargo did not arrive, and the entry summary was filed, CBP may delete the entry, as long as the filer provides adequate documentation to substantiate the deletion.²

According to CBP, entry deletion relieves the importer of liability for payment of duties, taxes, and fees related to that entry or entry summary.

Entry Substitution -- at Land Borders and for EIP/RLF

Entry Substitution (also known as "Alt substitution" or "turnover") generally occurs at land border ports. If a shipment is released via immediate delivery, and it is later discovered that another broker is responsible for filing the entry summary, the filer may request an entry substitution.

The new filer must file an entry and entry summary with an unused entry number, using only the Worksheet. The Worksheet must contain the reason for the substitution request and the concurrence of both filers. The receiving broker must present a copy of the documents used to obtain release and an unused entry number. When necessary, CBP may request that the filer submit original forms and supporting documents.

CBP will cancel the original entry and entry summary in ACS or in ACE, and note the new entry number and release the substituted using the release date established on the original entry.

In the case of electronic invoice/remote location filing entries (EIP/RLF), the entry substitution may require the original filer to hire a sub-agent to provide the substitute entry. Ports will monitor substitutions for potential broker compliance issues.

Liquidated Damages -- Late Files and No Files

With respect to late files, entry summaries filed beyond the normal 10-day filing period are subject to liquidated damages for late filing of the entry summary. The liquidated damages must be assessed against the bond obligated on the original entry and the original entry number. Even though the summary was filed late under the new entry number, the original bond is liable for timely filing of summary documents. Bond liability is not transferred until the new entry summary is accepted.

Regarding “no-files”, there are two options for payment of a liquidated damages case for failure to file an entry summary (also known as a "no-file" liquidated damages case). The violator may file the entry summary, pay the duties, taxes and fees due, and CBP will convert the "no-file" case to a "late file" case. Or the violator may choose to pay full value of the shipment (assessed amount) without filing the entry summary. If the violator pays the assessed amount without filing the entry summary, the summary will be canceled.

¹If CBP approves the cancellation request and the filer has transmitted payment of duties, fees, and taxes, CBP may issue a refund. Examples of when a duty refund is appropriate are as follows:

Merchandise denied entry by a PGA after release from CBP custody, which is destroyed under government supervision or exported under CBP supervision: Duties, fees, and taxes collected are eligible for an administrative refund (19 CFR 142.18, 158.41). (All other cases whereby merchandise has been released from CBP custody and then exported or destroyed are not eligible for a refund of duties, taxes, and fees via an entry summary cancellation. A refund in these cases must be requested via a drawback claim.)

Non-arrival of merchandise or duplicate entry: CBP may issue an administrative refund for the duties, fees, and taxes, provided that the requirements outlined in 19 CFR 158.3 are followed. A manifest discrepancy report (MDR) shall be filed (19 CFR Parts 4.2, 18.6, 18.8, 19.44, 122.49, 122.95, 122.120, 123.9, 146.37, 158.2, 158.5).

²Additional supporting documentation may include, but is not limited to, the CBP form 7501 (original or copy); a copy of the replacement CBP form 3461 or CBP form 7501; a copy of an in-bond exportation document verified by CBP; the CBP form 3499; documentation certifying refusal by a participating government agency; or a certification by the carrier that the merchandise was lost, short-shipped, or misdelivered. Supporting documentation is required for both paper-required and paperless releases. Electronic copies of the request letter and supporting documents are permitted.

CSMS#11-000219 (dated 09/21/11) available here

Five page guidance (attachment) available here.