90-Day Duty Deferral Ordered for COVID-19

Customs & Border Protection has issued a CSMS notice alerting the trade to an emergency order from the White House to defer the collection of some duties for goods entered between March 1 and April 30, 2020.

The text of the summary of the corresponding Federal Register Notice is as follows:

SUMMARY: In light of the President’s Proclamation Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19) (Presidential Proclamation 9994) under the National Emergencies Act on March 13, 2020, and the President’s Executive Order entitled “National Emergency Authority to Postpone The Time to Deposit Certain Estimated Duties, Taxes, and Fees” authorizing the Secretary of the Treasury to exercise the authority under section 318(a) of the Tariff Act of 1930, issued on April 18, 2020, the Secretary of the Treasury, in consultation with the designee of the Secretary of Homeland Security (U.S. Customs and Border Protection (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. 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. 

The CSMS notice is here. A follow up notice on payments is here.

There are important caveats to this, which may blunt the usefulness of this apparent effort to be helpful. First, the notice is clear that the duties that are likely the most worrisome to importers are not covered by this deferral. Specifically, the notice excludes antidumping duties, countervailing duties and tariffs imposed under Section 201, 232 and 301 (you know, the ones that hurt the most).

Moreover, if duties were already deposited, the government is not issuing refunds. That means this whole thing might be useful for the next 10 days and for companies on periodic monthly statements.

In other words, your mileage may vary and it seems may be less than anticipated.

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