“To qualify for this temporary postponement, an importer must demonstrate a significant financial hardship,” CBP said in a prepublication version of a temporary final ruling posted here.
What importers should make note as it relates to the deferrals:
- The importer’s operation must be fully or partially suspended due to orders from governmental authority because of COVID-19, and that as a result the gross receipts of such importer for March 13-31, 2020 or April 2020 are less than 60% of the gross receipts for the comparable period in 2019. CBP’s FAQ’s has clarified that the definition of gross receipts is not just the value of the import transaction, clarification is at 26 CFR 1.993-6 found here.
- This temporary postponement does not apply to any entry, or withdrawal from warehouse, for consumption, where the entry summary includes merchandise 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 (Additional Steel & Aluminum tariffs)
- Duties assessed pursuant to Section 201 of the Trade Act of 1974 (Additional tariffs on Solar panels & Large Residential Washers)
- Duties assessed pursuant to Section 301 of the Trade Act of 1974 (Additional China tariffs)
For example, an entry containing Section 301 excluded products is eligible as long as the exclusion was in place at the time of entry, and it does not contain any other merchandise that is subject to AD/CVD, Section 201, 232 or 301 Trade Remedy duties. For entries that are not already filed, importers may want to consider split entries if shipments contain merchandise that is subject to the ineligible duties and merchandise that is not.
Further, “an eligible importer need not file additional documentation with CBP to be eligible for this relief but must maintain documentation as part of its books and records establishing that it meets the requirements for relief,” it said.
CBP stated in the first CSMS message posted here. “No interest will accrue for the postponed payment of such estimated duties, taxes, and fees during this 90-day postponement period,” it said. “No penalty, liquidated damages, or other sanction will be imposed for the postponed payment of the deposit of estimated duties, taxes, and fees in accordance with this temporary postponement.”
In a second CSMS message posted here, CBP clarified that “this temporary postponement applies to formal entries of merchandise entered, or withdrawn from warehouse, for consumption (including entries for consumption from a Foreign Trade Zone) in March or April 2020,” and that “CBP will not return deposits of estimated duties, taxes, and fees that have already been paid.”
Finally, note this action does not apply to “payments of other debts to CBP” such as increased duty bills or payments of penalties or liquidated damages.
See the full Executive Order from President Trump posted here.
Importers who believe they may meet the postponement criteria should contact their Mallory Alexander Representative for further information.
Further, as all importers are making the determination for qualification of the 90-day postponement, we encourage all importers to consider signing up for Importer ACH Debit or Credit, and Importer ACH Refund. More information is available here or by contacting your Mallory Alexander Representative.