On April 19, 2020, President Trump issued an executive order instructing the secretary of the treasury to temporarily extend deadlines for estimated duty, tax, and fee payments for importers suffering significant financial hardship as a result of the COVID-19 national emergency declaration and shutdowns. U.S. Customs and Border Protection put the deferral program into effect today – April 20 – issuing a temporary final rule to administer it and inviting the trade to comment by May 20.
Today is the last day to defer monthly payments due today. Any importers making payment via the April periodic monthly statement must work with their filers today to ensure eligible entries are pulled from statement prior to 11:59 p.m. EDT on Monday, April 20.
ST&R will hold a conference call today at 2:00 pm EDT to explain the duty postponement. Please click here to sign up.
Eligible Deferrals. Estimated duties, fees, and taxes for importers experiencing a “significant financial hardship” due to COVID-19 are eligible for postponement. The deferral applies to formal entries of merchandise entered or withdrawn from warehouse for consumption, including entries from foreign- trade zones, in March or April 2020.
Significant Financial Hardship. An importer of record meets the “significant financial hardship” requirement if (a) its operations are fully or partially suspended during March or April due to orders from a competent governmental authority related to COVID-19 and, as a result, (b) its gross receipts for March 13-31 or April 2020 are less than 60 percent of its gross receipts from the comparable period in 2019. Importers need not apply to CBP for deferral or obtain an approval from CBP but should maintain documentation as part of their records establishing compliance in the event CBP conducts a post-entry review or audit to ensure compliance.
Eligible Entries. Only entries with no ineligible merchandise may receive duty postponement. Ineligible goods are those subject to antidumping or countervailing duties or Section 232, 201, or 301 duties. Alternatively, CBP is authorizing the filing of two entries for a single entry – for instance, one for goods subject to AD duty and one for goods not subject to AD duty.
Duty Bill, Fee, and Claim Payments. The deferral does not apply to deadlines for payment of (1) bills for duties, taxes, fees, and interest determined to be due upon liquidation, reliquidation, or reconciliation, (2) fees under 19 USC 58c, or (3) any penalty or liquidated damages claim due to CBP.
Interest and Enforcement Claims. CBP will not assess interest during the 90-day postponement period nor impose any penalty, liquidated damages, or other enforcement actions on appropriately postponed entries.
Payment Timeframes. Estimated duties, taxes, and fees paid on a single pay basis or daily statement may be postponed up to 90 days from the payment due date. Estimated internal revenue tax payments may be postponed up to three months from the payment due date. Estimated duties and fees paid via periodic monthly statement may be postponed up to three months, as defined by the 15th working day of the third month.
Payment Instructions. CBP encourages filers to utilize Automated Clearinghouse to the greatest extent possible. Importers and filers are responsible for scheduling payments accordingly as CBP will not adjust statement dates. Any adjustments to the April PMS must be made prior to 11:59 p.m. EDT on Monday, 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 statement to be submitted as single pay, (2) removal of remote location filing entries from a PMS, and (3) scheduling the month further out than two months to avoid pushing the periodic daily statement date.
Additional Information. CBP advises the trade to monitor CSMS and the CBP “COVID-19 Updates and Announcements” webpage and to direct policy questions to the Office of Trade, Trade Policy, and Programs at OTentrysummary@cbp.dhs.gov.
For immediate questions or assistance, please contact customs attorney Lenny Feldman for specific CBP-related questions and to comment on the temporary final rule, or trade consultant Nicole Bivens Collinson for questions on legislative efforts to get additional duties suspended for all entries and for a longer time period.
CSMS 42423171 COVID-19 – 90 Day Postponement of Payment for the Deposit of Certain Estimated Duties, Taxes, and Fees
CSMS 42421561 COVID-19 – Payment Instructions for 90-Day Postponement of Payment for the Deposit of Certain Estimated Duties, Taxes, and Fees
Temporary Final Rule
CBP Temporary Final Rule