Liquidation is the process through which Customs completes its review of an entry and finalizes its position as to the duties. You may ask, what about those duties paid at the time of entry? When duties are paid at the time of entry they are referred to as “deposits” because they are not considered Customs’ final assessment of duties owed. Generally, the entry remains “unliquidated” for a period of 314 days after the date of entry. During this interim period the entry information may be revised regarding country of origin, classification, valuation, etc. The 314th day marks liquidation. An entry is “deemed” liquidated by operation of law through Customs inaction within (1) year from the date of entry or reconciliation, unless extended.
An entry can be liquidated in one of three ways:
1. No change as to the way the goods were declared or duty deposited.
2. Customs may issue a bill of underpayment due to reasons such as change in classification or valuation.
3. Customs may issue a refund for overpayment.
Liquidation is important because it signifies the final calculation as to the payment of duties for a given entry. Further, the date of liquidation triggers the statutory limitations period where the importer may challenge Customs decision. For example, an importer who wishes to challenge Customs classification, the importer must file an administrative protest within 180 days from the date of liquidation. As a result, it is important for the importer to monitor liquidations.
