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Did you know? Customs & Border Protection to Begin Retroactive Billing for Merchandise Processing Fee Increase

Posted on 1 August 2012

This “Did You Know?” is brought to you by Mainfreight International, Inc – and is designed to help you and your supply chain navigate changing rules and regulations.

U.S. Customs and Border Protection has announced that it will begin billing importers for the Merchandise Processing Fee increase that went into effect October 1st 2011. 

The problem:  The law was signed by the President in the 3rd week of October 2011, but the MPF, which was increased from 0.21% to 0.3464% of a shipment’s value.  This was done as a form of “Paygo” – to pay for the retroactive extension of the Generalized System of Preference (a duty preference program for developing countries), the MPF was increased as well. 

The problem is that the Congress made the fee increase retroactively effective to Oct. 1, 2011.   However, CBP’s system was not able to accept the new MPF rate until Nov. 5.  At that time we expected CBP to issue retroactive billings.  However, CBP wasn’t able to do so for merchandise entered between Oct. 1 and Nov. 4 until the refund processing was completed for the Generalized System of Preferences, Andean Trade Preference Act and Andean Trade Promotion and Drug Eradication Act retroactive renewals that were part of the same legislative package.

What this means:  For entries cleared for YOUR company between Oct 1 and Nov 4 2011, CBP will calculate the “new” higher MPF amount – if the difference between the “old” MPF rate and the “new” MPF rate is greater than $20.00? You will receive a bill from US Customs & Border Protection.

Please do not ignore these billings! If you don’t pay? Your continuous bond will be “deactivated” and you will likely face being placed on “National Sanction” by US Customs. This will mean greater costs to you, slower Customs releases, and a great amount of (unnecessary) frustration for you. 

Remember - Differences of less than $20 are de minimis and as such will not be processed for retroactive MPF.   The exception? Entries flagged for reconciliation will have the MPF increase accounted for via the reconciliation entry.  CBP began this process last week and is planning to process up to 20,000 entries per week. 

Please contact your local Mainfreight International Inc Customs Brokerage office with any questions.  Thank you.