Steel Importers will See Little Benefit from 90 Day Duty Postponement Order
U. S. Customs and Border Protection (CBP), in conjunction with the Treasury Department, issued a notice on April 20, 2020 postponing Customs duty payment liability for certain importers able to demonstrate significant financial hardship due to COVID-19. This postponement is very limited, covering only formal entries made during March and April, 2020; excluding any entries with products covered by Section 232, Section 201, or Section 301 additional duties; and excluding any entries covered by antidumping or countervailing duties. The postponement would last for 90 days from the date the duties were due, and would be payable in full, but without interest, at the end of the 90 day period. CBP will not return deposits of estimated duties, taxes, and fees that have already been paid.
The postponement eligibility is further limited to companies that demonstrate substantial financial hardship. This is defined as having the operation of the company fully or partially suspended during March 2020 or April 2020 due to orders from a competent governmental authority limiting commerce, travel, or group meetings due to COVID-19, and as a result of such suspension, the gross receipts of the importer for March 13-31, 2020 or April 2020 are less than 60 percent of the gross receipts for the comparable period in 2019. Documentation of financial need does not have to be filed with CBP but must be kept on file for possible review. The financial hardship must apply to the importer of record.
Entries are not eligible for the postponement if any line item is covered by the exclusions listed above. Products that have been granted an exclusion under Section 301 are eligible if the exclusion covers the entire entry. CBP has authorized the splitting of shipments and filing of separate entries for portions that are eligible for the postponement.
The procedure is more applicable to importers using statement processing (monthly payment) as opposed to those making single entry payments. Many brokers have expressed concern over trying to handle different payment arrangements for different importers, or different arrangements for a single importer based on eligible and ineligible products. Sureties are expected to look at potential underwriting issues if their duty exposure increases by use of the postponement procedure.
Multiple industry associations representing domestic steel companies have expressed opposition to the postponement process, although their opposition is largely already mooted by the exclusion of products covered by Section 232 and/or antidumping and countervailing duty liability. Associations representing import interests are seeking extension of the postponement to entries filed after April 2020, and modification of the procedures to make them more applicable to single payment filers.
Additional details regarding the postponement process are available at https://content.govdelivery.com/bulletins/gd/USDHSCBP-2875383?wgt_ref=USDHSCBP_WIDGET_2?utm_source=search.usa.gov&utm_medium=search.usa.gov&utm_term=undefined&utm_content=undefined&utm_campaign=(not%20set)&gclid=undefined&dclid=undefined&GAID=1202709889.1586375054?utm_source=search.usa.gov&utm_medium=search.usa.gov&utm_term=undefined&utm_content=undefined&utm_campaign=(not%20set)&gclid=undefined&dclid=undefined&GAID=1202709889.1586375054.
Steven W. Baker
AIIS Customs Committee Chair