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Customs Announces 90-Day Deferral of Certain Import Duty Payments for Importers Affected by COVID-19 Customs Announces 90-Day Deferral of Certain Import Duty Payments for Importers Affected by COVID-19

Customs Announces 90-Day Deferral of Certain Import Duty Payments for Importers Affected by COVID-19

On April 19, 2020, President Trump signed an Executive Order that allows the U.S. Department of Homeland Security’s Customs & Border Protection (CBP) to grant a 90-day postponement of certain duties, taxes, and fees that would have otherwise been due to CBP by importers across the United States.

In the Temporary Final Rule implementing the Executive Order, CBP stated that, due to the COVID-19 pandemic, CBP

…is amending the CBP regulations to temporarily postpone the deadline for importers of record with a significant financial hardship to deposit certain estimated duties, taxes, and fees that they would ordinarily be obligated to pay as of the date of entry, or withdrawal from warehouse, for consumption, for merchandise entered in March or April 2020, for a period of 90 days from the date that the deposit would otherwise have been due but for this emergency action.

Additionally, it provides that “no interest that would otherwise accrue upon such estimated duties, taxes, and fees will accrue during the 90-day postponement period.”

Among other things, the Temporary Final Rule sets out to alleviate certain issues and immediate cash flow pressures that importers are facing due to the pandemic and economic crisis.

Am I Eligible to Postpone Customs Payments?

The Temporary Final Rule requires importers seeking to postpone import duties, taxes, and fees to demonstrate “a significant financial hardship.” To establish this, an importer must establish the following:
 
  1. That, the importer’s operation are fully or partially suspended during March or April of 2020 due to orders from a competent governmental authority limiting commerce, travel, or group meetings because of COVID-19; and
  2. As a result of such full or partial suspension of operations, the gross receipts of such importer for March 13-31, 2020, or April 2020 are less than 60 percent of the gross receipts for the comparable period in 2019.
How Do I Postpone Customs Payments?

An importer who wants to postpone payments is not required to provide evidence supporting its claim for eligibility for relief. However, importers must maintain the supporting documentation as part of the importer’s books and records for inspection by CBP, upon request.

What Payments Cannot Be Postponed?

The 90-day postponement does not apply to other CBP payment deadlines, such as those related to bills for duties, taxes, fees, and interest deemed owed through liquidation or reliquidation, payment of liquidated damages, as well as antidumping and countervailing duties. Notably, the postponement will also not apply to the Trump administration’s duties on Chinese products, steel, or aluminum.

Conclusion

For many businesses reliant upon imports, this temporary postponement of import duty, tax, and fee payments may provides a timely reprieve. The CBP put the postponement program into effect on April 20, issuing the Temporary Final Rule to administer it and inviting the trade to comment by May 20.

If you have questions about the 90-day postponement, please contact Ice Miller attorneys Dale Stackhouse(at dale.stackhouse@icemiller.com or 317-236-2401), Meghann Supino (at meghann.supino@icemiller.com or 317-236-2107), or Christian Robertson (at christian.robertson@icemiller.com or 202-807-4021).

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.
    
 
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