On April 18, 2020, President Donald Trump signed an Executive Order in an effort to support U.S. businesses that have faced significant financial hardship due to the COVID-19 pandemic response by allowing deferment of duty payments. The order gives the Treasury Department and U.S. Customs and Border Protection (CBP) the flexibility to allow for a 90-day deferment period on certain payments for importers, and will apply to payments for goods imported from March 1 to April 30, 2020.
Pursuant to this authority, the Treasury Department and CBP have issued a joint Temporary Final Rule. This regulation states that “An importer will be considered to have a significant financial hardship if the operation of such importer is fully or partially suspended during March or April 2020 due to orders from a competent governmental authority limiting commerce, travel, or group meetings because of COVID-19, and as a result of such suspension, the gross receipts of such importer for March 13-31, 2020 or April 2020 are less than 60 percent of the gross receipts for the comparable period in 2019.” CBP has indicated that an eligible importer will not need to file additional documentation with CBP to be eligible, but must maintain supporting documents “as part of its books and records establishing that it meets the requirements for relief.”
Treasury and CBP have confirmed that no interest will accrue during this 90-day period, and also that no penalties, liquidated damages claims, or other sanctions will be imposed for the delayed deposits of any estimated duties, taxes and fees. This temporary postponement does not permit return of any deposits of estimated duties, taxes, and/or fees that have been paid. Further, this duty deferment does not apply to imports subject to duties associated with antidumping and countervailing duties (AD/CVD), and Section 201, 232 and 301 trade remedies are not included in this duty relief effort. While CBP has stated that additional details on full implementation are forthcoming, it has released the following two CSMS messages:
- CSMS #42423171 – COVID-19 – 90 Day Postponement of Payment for the Deposit of Certain Estimated Duties, Taxes, and Fees
- CSMS #42421561 – COVID-19 – Payment Instructions for 90-Day Postponement of Payment for the Deposit of Certain Estimated Duties, Taxes, and Fees
While this temporary final rule is effective as of April 22, 2020, Treasury and CBP have opened this rulemaking for a thirty-day public comment period. Comments should be submitted via the Federal eRulemaking Portal at http://www.regulations.gov. Follow the instructions for submitting comments via Docket No. USCBP–2020–0017. CBP specifically invites comments that relate to the economic, environmental, or federalism effects that might result from this regulatory change, and notes that comments that will provide the most assistance “will reference a specific portion of the rule, explain the reason for any recommended change, and include data, information, or authority that support such recommended change.”