04.23.2020 Payment of Certain Import Duties, Taxes and Fees Postponed for 90-Days
President Trump issued an Executive Order on April 19, 2020, authorizing the Secretary of Treasury to temporarily extend deadlines for the payment of deposits of certain estimated import duties, taxes and fees for importers suffering “significant financial hardship due to COVID-19.”
The scope of relief, as set out by U.S. Customs and Border Protection (CBP), provides that the payment of deposits of such estimated duties, taxes and fees will be postponed for 90 calendar days. The postponement applies to formal entries of merchandise entered for consumption in March 2020 or April 2020, but does not apply to entries in which the merchandise is subject to one or more of the following:
- Antidumping duties;
- Countervailing duties;
- Duties assessed pursuant to Section 232 of the Trade Expansion Act of 1962;
- Duties assessed pursuant to Section 201 of the Trade Act of 1974; and
- Duties assessed pursuant to Section 301 of the Trade Act of 1974.
In order to take advantage of the 90-day postponement period, importers/filers must ensure their entries do not include merchandise that is ineligible for the postponed payment.
An importer is considered to have suffered “significant financial hardship,” and is thus eligible for the deferral of payments, if: (i) the importer’s operation is fully or partially suspended during March 2020 or April 2020 due to orders from a competent governmental authority limiting commerce, travel or group meetings due to COVID-19; and (ii) as a result of such suspension, the importer’s gross receipts for March 13-31, 2020 or April 2020 are less than 60% of the gross receipts for the comparable period in 2019. The importer is not required to file documentation with CBP to be eligible for the duty deferral relief. However, the importer must maintain documentation that demonstrates it meets the requirements for relief as part of its books and records and be prepared to provide the documentation to CBP if requested.
According to CBP guidance, the temporary postponement 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), or deadlines for the payment of any penalty or liquidated damages due to CBP. The timeframe for entry summary filing is not changed.
The relief is subject to additional details and conditions set forth in the CBP release available here and the CBP Federal Register release issued on April 22, 2020.
We will follow this alert with guidance on the payment of the duties, taxes and fees that have been deferred by the importer.
Please note: This alert contains general, condensed summaries of actual legal matters, statutes and opinions for information purposes. It is not meant to be and should not be construed as legal advice. Readers with particular needs on specific issues should retain the services of competent counsel.