Adjustments to MPF and HMF in 2018!

Money Dollar bills on digital stock market financial exchange information and Trading graph
On November 1 st, 2017, CBP published a General Notice in the Federal Register titled ‘COBRA Fees To Be
Adjusted for Inflation in the fiscal year 2018 CBP Dec. 17–17’.  This announces a change to current import entry fees, which importers need to be aware of.

By way of background, CBP explains that “On December 4, 2015, the Fixing America’s Surface
Transportation Act (FAST Act, Pub. L. 114–94) was signed into law. Section 32201 of the FAST Act
amended section 13031 of the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 (19
U.S.C. 58c) by requiring certain customs COBRA user fees and corresponding limitations to be adjusted
by the Secretary of the Treasury (Secretary) to reflect certain increases in inflation ”.

The long-and-short of it for the majority of importers, is that the Harbor Maintenance Fee (HMF) will be
adjusted to a minimum of $25.67. The Merchandise Processing Fee (MPF) cap will be adjusted to $497.99.

This change will go into effect on January 1, 2018.

The latest on ACE

seal_aceHighlights from US Customs’ July 2014 ACE Monthly Trade Update:

The July 2014 ACE  update is available here.


New ACE functionality deployed

seal_aceHere’s a quick summary for new ACE capabilities that US Customs deployed recently:

  • Expansion of the ACE Cargo Release (Simplified Entry) pilot to include:
    • In-bond movements and partial quantities for ocean and rail shipments
    • Basic processing for truck shipments
    • Ability for filers to certify for ACE Cargo Release from their ACE Entry Summary record for air, ocean and rail shipments (Certified from Summary)
  • New ACE entry summary validations for Merchandise Processing Fee (MPF) and Complex Duty Calculations (i.e., those entry summary lines with two HTS classifications
  • Migration of the AES to the ACE platform for CBP and PGA users, and support for new Census Bureau and Bureau of Industry and Security regulations

CBP and the trade are also testing Cargo Release transactions for ocean shipments and PGA Message Set transaction for the USEPA, which when vetted, will be deployed in a future ACE release.

Reminder:  Mandated use of certain ACE functionality will commence in May 2015 and mandated use of ACE for all trade processing will be required by October 2016.  Make sure now that your ABI software is ACE-certified to avoid any problems next year!

GSP set to expire on July 31

From a recent CBP website posting:

The Generalized System of Preferences (“GSP”) trade preference program is due to expire on July 31, 2013.  CBP has no information as to whether or not this preference program will be renewed and if it is renewed, whether there will be a lapse period, or whether there will be a retroactive clause providing for a refund of claims made during such a period.

When this last happened in 2011, Congress ultimately acted to retroactively extend the GSP and allowed for reimbursement for duties paid on GSP-eligible merchandise that was entered during the expiration period.  However, Congress simultaneously increased the MPF rate to offset the estimated cost of lost tariffs associated with expanding the GSP benefits.


CBP updates “informal entry” threshold

Effective January 7, 2013, US Customs will increase the threshold value to $2,500 for merchandise to qualify for “informal entry” treatment.

From the Federal Register website:

Currently, for any merchandise valued over $2,000, CBP requires importers to provide a surety bond, complete CBP form 7501, and pay a minimum of $25 in Merchandise Processing Fees (MPF). The final rule increases the limit, from $2,000 to $2,500, for which merchandise may qualify for an “informal entry”, thereby eliminating the need for a surety bond, expediting the customs clearance process, and reducing the required MPF amount to $2 (assuming the entries are filed electronically). CBP is increasing the informal entry limit to mitigate the effects of inflation and in addition, to meet a commitment of the Beyond the Border Initiative between the United States and Canada, to increase and harmonize the value thresholds to $2,500 for expedited customs clearance from the current levels of $2,000 for the United States and $1,600 for Canada.

Retroactive MPF — no interest should be assessed on timely payments

In a recent blog post, we noted that importers have been receiving invoices from CBP for payment of additional merchandising processing fees (MPF) for entries filed between October 1 and November 5, 2011 (due to an increase in MPF that was not assessed last year).

Now, there are reports that at least one port, Atlanta, has been sending these retroactive invoices with interest assessed up front (i.e., not assessed for payment after due date).    This is inconsistent with the posting on US Customs’ MPF web page that “CBP will not assess interest on bill amounts for the increased MPF.”

Of course, CBP may assess interest on payments made after the due date of the retroactive invoices.  But if importers have paid these bills in a timely manner, they can avoid the interest penalty.

Some Customs personnel have reported that there is a backlog in processing the payments, and as a result, interest may be inadvertently be assessed for timely payments.  In these instances, contact your Customs Specialist to discuss.  It’s likely that the matter will be resolved when the backlog is cleared and subsequent invoices issued.

To prevent confusion, we recommend that importers follow Customs’ advice for paying MPF:  “[M]ultiple bills may be paid with one check, as long as a supplemental spreadsheet is provided, which lists each bill number and bill amount.”  By providing this documentation, you can provide clear evidence of timely payment and avoid incorrect interest charges.

Paying now for last year’s MPF increase

US importers may be noticing a surprise in their mailboxes.  Many have been receiving invoices from US Customs for payment of additional merchandise processing fees (MPF) for entries filed between October 1 and November 5, 2011.

Why now?  If you recall, CBP increased the MPF rate last October 1.  Unfortunately, the agency did not complete programming to reflect the new rate for over a month, so entries filed in that window of time reflected the old rate.  Now, CBP is retroactively billing entry filers for the difference in MPF charged.

Details are available here.

Merchandise fee for processing (MPF) entries increases

On Friday, October 21, 2011, H.R. 2832 became law.  The main purpose of the statute is to extend the Generalized System of Preferences (GSP), which expired on December 31, 2010, through July 31, 2013.   However, to offset the estimated cost of lost tariffs associated with expanding the GSP benefits, H.R. 2832 increases US Customs’ MPF, or merchandise fee for processing entries, (Class Code 499) from 0.21% to 0.3464%.

Currently, Customs is modifying the Automated Broker Interface to accept the new rate, which will apply to entries filed via ACS and ACE between October 1, 2011 and June 30, 2014.  CBP has indicated that it will provide the trade with one week’s notice before it is able to accept the new MPF rate.

Customs’ official notice regarding the rate increase can be found here.