OD Global: Trade Legislation H.R. 2832

Recently, The President of the United States signed Trade Legislation H.R. 2832. Among other things, it increases the Merchandise Processing Fee (MPF) on formal entries from 0.21% to 0.3464%. The time frame for enactment is for 9 years, beginning October 2011 through June 2021. The changing of the MPF rate did not change the existing minimums and maximums of $25 and $485.

So, what does this mean to you and what is the effect on your duty payments to US Customs & Border Protection (CBP)?

If you are an importer and the entered dutiable value of your goods is between $7500 and $250,000, you will see an increase. For example, if the value of your goods is $75,000, you will pay $102.30 more or a total of $259.80 for the MPF under the increased value. If your goods are valued at $200,000, you will still pay the MPF maximum limit of $485. While the percentage increase is below 60%, you will still pay $65.00 more than you had to pay before with this new law taking effect.

While this increase was effective on October 1, 2011, it was not signed into law until October 21, 2011. Creating more issues is that CBP is not ready and they continue to work on internal system programming to address accepting the change in the MPF. CBP is also working on a cost effective plan for collecting those additional monies generated in the time before their systems were ready to accept the new MPF charges. There have been several statements made that CBP will issue invoices for the lapsed time period against entries where the MPF duties total a difference of $20 or more per entry. Those invoices will be going directly to the importer of record to the address on file with CBP’s ABI or ACE system. The invoices will not be issued by CBP Headquarters, but by the individual CBP Ports of Entry on an entry by entry basis. CBP has not issued a statement as to when this additional billing process will begin. CBP issued a message to the trade on November 1, 2011 that on November 5, 2011 after 7:30 a.m., their system changes will allow the trade to submit the new MPF rate for summaries that have a duty computation date of 10/1/2011 or later.>

If you have any questions at all regarding your entries with a duty computation date of 10/1/2011 or later, please contact your Old Dominion's Global Department for further assistance.