This past weekend, U.S. Customs and Border Protection (CBP) announced that in light of COVID-19, they would amend the regulations to temporarily postpone the deadline for payment of duties, taxes, and fees for 90 days for those importers facing significant financial hardship.
Under the National Emergencies Act on March 13, 2020 and the President’s Executive Order entitled “National Emergency Authority to Postpone the Time to Deposit Certain Estimated Duties, Taxes, and Fees,” CBP states that they will be:
“..amending the CBP regulations to temporarily postpone the deadline for importers of record with a significant financial hardship to deposit certain estimated duties, taxes, and fees that they would ordinarily be obligated to pay as of the date of entry, or withdrawal from warehouse, for consumption, for merchandise entered in March or April 2020, for a period of 90 days from the date that the deposit would otherwise have been due but for this emergency action.”
This temporary deferral of duties does not include items subject to antidumping duties, duties assessed pursuant of Sections 232 of the Trade Expansion Act of 1962 or 301 the Trade Act of 1974. In addition, it also does not apply to entries or withdrawals from warehouse that are subject to certain specified trade remedies or any entry summary including merchandise subject to those remedies.
The full text can be found in the Federal Register. In terms of filing, CBP anticipates importers to file separate entities for shipments containing merchandise eligible for the temporary postponement and merchandise that is not eligible.
Qualifying for Postponement
To qualify for the postponement of duties, an importer must:
- Demonstrate a significant financial hardship,
- Have or have had operations be fully or partially suspended during March or April 2020 due to orders from a competent governmental authority limiting commerce, travel, or group meetings because of COVID-19, AND;
- As a result of such suspension, the gross receipts of such importer for March 13-31, 2020 or April 2020 are less than 60 percent of the gross receipts for the comparable period in 2019.
An eligible importer does not need to file additional documentation with CBP to be eligible for this relief but must maintain documentation as part of its books and records establishing that it meets the requirements for relief.
When Postponement Does Not Apply
In addition to the ineligible items listed above, this temporary postponement also does not apply to:
- Deadlines for the payment of other debts to CBP, including but not limited to:
- Deadlines for the payment of bills for duties, taxes, fees, and interest determined to be due upon liquidation or reliquidation
- Deadlines for the payment of fees authorized pursuant to 19 U.S.C. 58c (except for merchandise processing fees and dutiable mail fees)
- Deadlines for the payment of any penalty or liquidated damages due to CBP.
CBP has also issued separate instructions via the Cargo System Messaging Service which can be found by clicking on the following links:
- Payment COVID-19 – 90 Day Postponement of Payment for the Deposit of Certain Estimated Duties, Taxes, and Fees
- COVID-19 – 90 Day Postponement of Payment for the Deposit of Certain Estimated Duties, Taxes, and Fees
For more information on how this may affect your business, please contact Export Solutions for a free consultation.
Rebecca Yeager is a Trade Compliance Consultant for Export Solutions -- a full-service consulting firm that specializes in helping companies comply with U.S. and international import/export regulations.