On Sunday April 19th, President Trump issued an Executive Order using the National Emergency Authority to temporarily extend deadlines for certain estimated payments of import tariffs. Simultaneously with the Presidential Proclamation, U.S. Customs and Border Protection (CBP) issued instructions and guidelines in a CSMS bulletin titled “90 Day Postponement of Payment for the Deposit of Certain Estimated Duties, Taxes, and Fees.” For entries that meet certain requirements, CBP will postpone owed payments for 90 calendar days following the deadline for payment for any entries made in March 2020 or April 2020, but will not return deposits of estimated duties, taxes, and fees that have already been paid.
The extension of certain tariff payment deadlines is designed to provide relief to importers “experiencing a significant financial hardship due to the coronavirus disease (COVID-19).” According to the CSMC bulletin, CBP has established that eligible importers do not need to file documentation with CBP to take advantage of the deferrals, but must maintain documentation in its books and recordkeeping that can prove the importer meets the requirement for relief. CBP defines its standard for “significant financial hardship” as follows:
- [the company has] experienced a full or partial suspension of government operations due to COVID-19 related government orders; and
- Its “gross receipts are less than 60 percent of the gross receipts for the comparable period in 2019.
The temporary postponement only applies to formal entries of merchandise entered, or withdrawn from a warehouse, for consumption in March, 2020 or April, 2020. However, there are certain exceptions. The deferral does not apply to duties through various trade actions listed below:
- Section 301 Duties
- Countervailing Duties (“CVD” Duties
- Antidumping Duties (“AD” Duties)
- Section 232 Duties
- Section 201 Safeguards Actions
Furthermore, the temporary postponement does not apply to deadlines for the payments of other debts to CBP, including but not limited to “deadlines for the payment of bills for duties, taxes, fees, and interest determined to be due upon liquidation or reliquidation, deadlines for the payment of fees authorized pursuant to 19 U.S.C. 58c (except for merchandise processing fees and dutiable mail fees), or deadlines for the payment of any penalty or liquidated damages due to CBP.” Finally, the timeframe for entry summary filing has not changed.
It remains to be seen if the Trump administration will direct CBP to apply temporary duty postponements for entries in May or beyond if the financial hardships from COVID-19 continue. Companies that import goods have continued to push the administration for temporary relief to address cash flow issues while domestic industry associations have opposed such measures.