A valid type 1 continuous bond is required for participation in the Reconciliation Prototype. Customs automated commercial system requires the bond to be recorded in the system in order to allow flagging.

Unfortunately, the portion of ACS that tracks bond status was designed long ago, without anticipating the Reconciliation Prototype.

The result is that as soon as a bond is *scheduled* to terminate in ACS, the flagging capability is turned off. Even if the bond is scheduled to terminate weeks in advance, the date when the termination date is input is the date the flagging is stopped. The input of the termination date is the only system event that can be used to monitor bond coverage for reconciliation participants, so there is currently no way to administer these changes any differently.

When entries for importers in this situation are filed, with flagging attempted, the filer will get the "Not a Reconciliation Importer" message.

For blanket flagging, the result is not as apparent. There is no notification to Customs, the importer, or the filer, that entries are no longer being flagged for reconciliation.

In order to minimize inconvenience for everyone involved, the Reconciliation team recommends that:

1. Importers and brokers be aware of transitions in bond status

   The new bond be secured in advance, to minimize "downtime"

2. The reconciliation bond rider for the new bond be secured at the same time the new bond is obtained
3. Filers communicate with the bond desk and be aware of the input of bond termination date
4. Filers request the bond desk to input the new bond into ACS at the same time the old bond's termination date is input.

If the new bond is already in the system, the reconciliation team can immediately reactivate the importer for flagging. So it is advisable for filers to make sure the new bond is input concurrently with the old bond's termination, and coordinate with the Reconciliation Team to provide the new rider and have the flagging capability restored.

The reconciliation team periodically runs a report to find importers whose flagging capability has been terminated by ACS, and will notify the point of contact we have on file.

As soon as the new bond is valid and input into ACS, and the Reconciliation Team receives a faxed copy of the new rider (referencing bond number of the new bond), we will immediately reinstate the importer's ability to flag entries.