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90-Day Duty Deferral Granted but Eligibility Limited

Tuesday, April 21, 2020
Sandler, Travis & Rosenberg Trade Report

Importers of record suffering a significant financial hardship due to the COVID-19 pandemic may postpone for 90 days their deposit of certain estimated duties, taxes, and fees. However, there are significant limitations on eligibility for this deferral and a midnight April 20 deadline for associated adjustments to periodic monthly statements for April.

In the meantime, businesses are still pushing for legislation that would suspend additional tariffs, for all entries, for a longer period. Those interested in participating in this initiative should contact trade consultant Nicole Bivens Collinson.

Deferral timeframe  – Estimated duties, taxes, and fees paid on a single pay basis or daily statement may be deferred up to 90 days from the payment due date. Estimated internal revenue taxes may be deferred up to three months from the payment due date. Estimated duties and fees paid via periodic monthly statement may be deferred up to three months, as defined by the 15th working day of the third month.

Eligibility – The deferral applies to formal entries of goods entered or withdrawn from warehouse for consumption, including entries from foreign-trade zones, in March or April 2020.

To qualify, importers must have had their operations fully or partially suspended during March or April due to orders from a competent governmental authority related to COVID-19 and, as a result, have gross receipts for March 13-31 or April that are less than 60 percent of their gross receipts from the comparable period in 2019. Importers need not file additional documentation to be eligible for this relief but must maintain documentation establishing compliance as part of their books and records. CBP may conduct post-entry reviews or audits to ensure compliance.

Exceptions – The deferral does not apply when the entry summary includes any goods subject to antidumping, countervailing, section 201 (e.g., clothes washers and solar products), section 232 (e.g., steel and aluminum), or section 301 (e.g., imports from China) duties. When a shipment contains goods that are eligible for the deferral as well as goods that are not, CBP anticipates that importers will file two separate entries.

The deferral also does not apply to the payment of other debts to CBP, including (1) bills for duties, taxes, fees, and interest determined to be due upon liquidation or reliquidation, (2) fees under 19 USC 58c (except merchandise processing fees and dutiable mail fees), or (3) any penalty or liquidated damages due to CBP.

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

Payment instructions – Importers and filers who take advantage of this deferral are responsible for scheduling payments accordingly, and CBP will not adjust statement dates. Any adjustments to the April periodic monthly statement must be made prior to 11:59 p.m. EDT on April 20. CBP is deploying updates to the ACE SU statement transaction to provide importers and filers with more flexibility when removing entries from a PMS, including (1) no longer requiring entries removed from the statement to be submitted as single pay and allowing entries removed from one statement to be rescheduled for another, (2) allowing remote location filing entries to be removed from a PMS and scheduled for another statement, and (3) allowing importers and filers to schedule the month further out than two months to avoid further pushing the periodic daily statement date.

Interest and penalties – CBP will not assess interest during the 90-day deferral period or impose any penalty, liquidated damages, or other enforcement actions on appropriately deferred entries.

CBP has issued a temporary final rule amending its regulations to reflect this deferral and is accepting comments on it through May 20.

For questions or assistance, please contact customs attorney Lenny Feldman at (305) 894-1011 or trade consultant Nicole Bivens Collinson at (202) 730-4956.

You can also click here to register for and watch a free webinar by ST&R professionals on the details of this duty deferral.

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