The "How To" Guide for Postponing Payment of US Duties, Taxes and Fees under COVID-19

Last week the US Treasury and U.S. Customs and Border Protection (CBP) announced that importers can benefit from the postponement of some duty, tax and fee payment for 90 calendar days.

We break down how to do it in a simple and straightforward way.

Who can benefit?

Importers who enter or withdraw goods from a warehouse or warehouse, for consumption (including entries for consumption from a Foreign Trade Zone) can benefit from this temporary postponement.

What's the catch?

You need to have experienced significant financial hardship due to the coronavirus disease (COVID-19)

What's significant financial hardship? There are two conditions:

  1. Your operation was fully or partially suspended during March 2020 or April 2020 because officials imposed restrictions which limit or stop your commerce, travel, or group meetings due to COVID-19.

  2. You can show that the gross receipts for March and April 2020 are < 60 % of the gross receipts for the same time in 2019. The IRS defines gross receipts as "the total amounts the organization received from all sources during its annual accounting period, without subtracting any costs or expenses."

How do I need to prove financial hardship? Just maintain documentation as part of its books and records establishing that it meets the requirements for this relief

How can you say it correctly in formal words?

Where applicable, the requirement to pay the deposit of estimated duties, taxes and fees for the purpose of establishing the time of entry stated in 19 CFR § 141.68 is waived.

What fees are you talking about?

Examples are the merchandise processing fees and dutiable mail fees.

When can payment be postponed?

For entries made in March 2020 or April 2020.

Temporary Authorization of 90 additional calendar days without penalty

No interest will accrue, no penalty, liquidated damages, or other sanction will be imposed if you do not pay when you normally should.

Attention to Exclusions

  • CBP will not return deposits of estimated duties, taxes, and fees that have already been paid.

  • Does not apply where goods are subject to Investigations (Sections 232,201 and 301) and Additonal Duties are imposed (like in the case of China), Antidumping duties or Countervailing duties). Be careful here: CBP says that if if you import goods subject to antidumping duties, AND not subject to antidumping duties, the entire entry will NOT be eligible for the 90-day postponed payment. The workaround is to submit two separate entries ( 19 CFR § 141.52), one for goods subject to antidumping duties and one for goods not subject to ADD,

How do I pay? CBP says importers and filers should use the Automated Clearinghouse (ACH). You can pay as a single-pay check, ACH Daily and Monthly Statement, or Periodic Monthly Statement (PMS). Those that use PMS with the delayed payment have the responsibility to schedule payments accordingly. CBP will not adjust statement dates.

How will ACE be adjusted to provide this flexibility? The ACE Statement Update (SU) transaction will be changed to give the importer/filer more flexibility when removing entries from a PMS: 1. Entries removed from statement no longer have to be submitted as single pay. The importer/filer can reschedule entries that were removed from one statement for another statement. 2. The importer/filer can now remove Remote Location Filing (RLF) entries from a PMS, including the April PMS, and schedule those entries for another statement. 3. The importer/filer can now schedule the month further out than two months, so that they do not have to further push the Periodic Daily Statement (PDS) date. This will allow the importer/filer to file an entry with an April PDS date and schedule for the July monthly statement.

Find out more

Please refer to the entire CBP information in CSMS #42423171, CSMS #42421561 and CSMS #42423171 for more details.

CBP COVID-19 Updates and Announcements

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