April 20, 2020

Dear Member:

On April 18th, President Trump signed an Executive Order to provide additional economic support for U.S. businesses, including critical supply chains for U.S. manufacturers, during the COVID-19 pandemic.

The order gives the Administration the flexibility to allow for a 90-day deferment period on certain payments for importers who have faced a significant financial hardship due to the COVID-19 pandemic response. Pursuant to this authority, the Treasury Department and U.S. Customs and Border Protection issued a joint Temporary Final Rule.

Here are some more useful details:

  • Click here for a press release from the U.S. Department of Homeland Security
  • Click here for the Temporary Final Rule temporarily postponing the time to deposit certain estimated duties, taxes, and fees

Here’s a key point made in the rule: “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.”

President Trump’s special tariffs on Chinese goods and steel and aluminum imports weren’t included in the tariff-deferral offering, and other punitive tariffs on dumped and subsidized products also can’t be delayed, according to the temporary rule.

Some other key points from the rule follow:

  • Companies have 30 days to respond or submit comments to the proposed rule (linked above).
  • Some import duties (not Sec 301 or 232 tariffs) will be suspended from collection for 90 days.
  • To qualify for the extension, a company’s business operations must be fully or partially suspended during March or April as a result of coronavirus-induced federal travel and commerce restrictions.
    • Their gross receipts for mid-March to the end of March or April must be less than 60% of those in the prior year period.
  • This temporary postponement does not permit return of any deposits of estimated duties, taxes, and/or fees that have been paid.
  • This temporary postponement also does not apply to entries, or withdrawals from warehouse, subject to certain specified trade remedies, and any entry summary that includes merchandise subject to those trade remedies is not eligible under this rule.
  • Importers will file separate entries when a shipment contains both merchandise that is eligible for temporary postponement and merchandise that is ineligible.

This member exclusive update has been provided in consultation with our Washington, DC-based government affairs and global business advisory firm, The Vogel Group – www.vogelgroupdc.com

Share this