With many companies experiencing significant financial hardship as a result of the social isolation policies put in place to fight the #COVID-19 pandemic, a Temporary Final Rule gave eligible Importers of Record the option to temporarily postpone the payment of some duties on goods entered in March and April, 2020. While CBP will not refund any duties already paid, for companies experiencing financial hardship it may not be too late to take advantage of the program.

This blog post explores –

  1. Which companies are eligible for the 90-day duty postponement?
  2. Exactly which duties have been postponed?
  3. If my company has taken the postponement when must the duties be paid?
  4. What can I do if I have already filed my entries?

The Temporary Final Rule of April 20th, 2020 implementing the program recognizes that, in response to #COVID-19, many companies have been required by state and/or local authorities to fully or partially suspend their operations between March to April, 2020. These requirements may have imposed limits on commerce, travel, or group meetings, negatively impacting sales and revenue. The requirements to work remotely may also have hampered the ability of Importers of Record to authorize the necessary payments for duties, taxes, and fees on imported merchandise.

 Demonstrating Financial Hardship

To take advantage of the program, the party identified as the Importer of Record on the entry must be able to demonstrate that as a result of government-imposed actions to address #COVID-19 which suspended or limited their operations, their gross receipts for March 13-31, 2020 or for April 2020 are less than 60 percent of the gross receipts for the comparable period in 2019.

What Payments are Eligible for the 90-Day Postponement?

The program authorizes that:

  • Eligible Importers of Record may postpone for up to ninety (90) days the payment of estimated duties, taxes, and fees for goods entered or withdrawn from warehouse for consumption in March or April, 2020;
  • No interest will accrue upon the postponed payments during this 90-day period, (including on merchandise processing and dutiable mail fees);
  • No penalty, liquidated damages, or other sanction will be imposed for the postponed payments during this 90-day period;
  • This waiver also applies to those entries where the time of entry is in any way contingent upon the deposit of the estimated duties, taxes, and fees.

What Payments are NOT Eligible for the 90-day Postponement?

Duties owed as a result of trade remedy or extraordinary tariffs measures are excluded from the program and so are still due at time of entry or warehouse withdrawal. These are –

  1. Antidumping or countervailing duties;
  2. National security tariffs on steel and aluminum (Sec. 232 tariffs);
  3. Safeguard duties;
  4. China tariffs (Sec 301 tariffs).

Also, NOT eligible for the 90-day postponement is payment of any debts other than the estimated duties, taxes, and fees ordinarily due at time of entry. Deadlines for post-liquidation payments or for customs services therefore remained unchanged.

How to Participate?

There is no additional or special documentation required to take advantage of the program. However, to be eligible the Importer must note that:

  • The timeframe for entry summary filing remained unchanged;
  • To determine the amount of estimated duties, taxes, and fees owed, the date used for calculation remained the date that would have otherwise applied in the absence of the 90-day postponement period;
  • Separate entries must have been filed for a shipment that contained both merchandise that is eligible and ineligible for the 90-day postponement;
  • The participating Importer of Record is solely responsible for meeting the new payment deadline. CBP will not adjust statement dates or provide new notification for postponed payments. The agency has, however, made adjustments in ACE to facilitate the program.

The Importer that elected to take the relief must also maintain documentation as part of its books and records establishing that it meets the requirements for relief. CBP may conduct a review of the documentation at a future date to ensure compliance with the requirements.

General Guidance

With social distancing orders still in place in many states in May, it is not improbable that the Temporary Rule could be extended to cover future entries. The Temporary Rule remains open for comments until May 20th. Importers of Record or other persons affected by how the program is being implemented should take the opportunity to comment.

This article provides general guidance only. If you are an Importer of Record, for information specific to your situation or for additional information, of if you would like assistance in submitting a comment please contact us.