When goods are imported into the United States, the importer pays the estimated duties within 10 days of the release of the goods. Many businesses assume that this constitutes the "end" of the entry and their obligations, but that's simply not the case.
What is liquidation?
Liquidation is the final calculation of money owed to CBP based on current knowledge of duty rates and the value of the imported goods. For the majority of imports, this is the final phase of importing.
At the time of entry, the importer pays the estimated duties based on the classification used. At the time of liquidation, CBP determines whether the estimated amount was correct. If CBP decides that a higher amount is owed than the amount paid, a supplemental duty bill will be issued for the amount still owed. If a lower amount was due, CBP will refund the difference back to the importer. Although, if the duty refund or advancement is less than $20, it will not be collected or reimbursed.
The following are a few reasons there may be a discrepancy in the amounts paid and owed to CBP:
- The incorrect HTSUS code was used for the goods at the time of entry.
- CBP may have had a ruling on similar merchandise, changing their original interpretation.
- A recent court decision may have been made on a similar commodity.
How long does it take an entry to liquidate?
The liquidation of an entry typically occurs within 314 days of the day it was imported into the United States. As long as liquidation has not been suspended or extended by CBP, the entry will automatically be liquidated using the estimated values provided upon the entry of the goods.
CBP can extend liquidation up to three times in one-year increments. By extending, Customs earns more time to review the accuracy of the entry. Some reasons to extend include the following:
- The importer has requested a lower duty rate or requested suspension while pending a formal ruling from CBP.
- CBP wants more information, the final rate has not yet been decided, or the value of goods have not been determined.
- The goods are subject to antidumping or countervailing duties.
How can an importer contest a ruling after liquidation?
Once an entry has been liquidated, it is considered complete for CBP purposes unless supplemental duties are owed. However, if an importer disagrees with CBP in their ruling on the entry, they are able to protest.
An importer as 180 days after an entry has liquidated to file a formal protest. In this case, the liquidation will not be considered final until the protest has been decided or the litigation settled.
If you have any questions concerning the liquidation or protest process, please contact email@example.com.