90-Day Duty Deferral Update

U.S. Customs and Border Protection has provided the following additional guidance about its 90-day duty postponement of certain estimated duties, taxes, and fees.

• The following entries do not qualify for the deferment:
  1. Products subject to China Section 301 additional tariffs, including Lists 1, 2, 3, 4A, and 4B
  2. Goods that benefit from the retroactive application of Section 301, Section 232, and Section 201 tariff exclusions (trade remedies) after the time of entry;
  3. Entries in which the broker, who does not meet the criteria for significant financial hardship, acts as the importer of record (IOR);
  4. Reconciliation entries; or
  5. Entries subject to an AD or CV case in which no rate has yet been established or that has a zero rate applicable.

 

• The following entries qualify for the deferment:
  1. Goods that benefit from Section 301, Section 232, and Section 201 tariff exclusions (trade remedies) if the exclusions are in effect at the time of entry
  2. Cotton and cotton products which are assessed the Cotton Fee

 

• If the IOR is a wholesaler that sells their goods to retailers whose operations have been suspended due to COVID-19 orders, the wholesaler must meet the significant financial hardship criteria in order to be eligible for the deferment.

 

• The duty deferral only applies to goods entered or withdrawn from warehouse or foreign-trade zone for consumption in March or April. The time of entry, pursuant to 19 C.F.R. § 141.68, establishes when an entry for consumption is made.

 

• CBP is adopting the definition of “gross receipts” used at 26 CFR 1.993-6, which can be reviewed by clicking here.

 

• Filers using the duty deferment should not file any drawback claims, either accelerated or non-accelerated, until payments have been properly made on the import entry.

 

• A post-summary correction will not be allowed for any entry that has deferred duty until after the duty is paid.

 

• While importers who meet the significant financial hardship criteria do not need to file documentation with CPB to confirm eligibility, customs broker may, at their discretion, choose to secure documentation from the importer to confirm that it meets the significant financial hardship criteria prior to filing the entry.

As such, OCEANAIR requires a letter certifying that the importer meets the significant financial hardship and, thus, qualifies for the 90-day duty deferral.  The letter must be on company letterhead and signed by an officer of the company/corporation.  The following statement must be included in the letter:

 

“I understand that CBP has provided for a 90-day duty postponement for importers with operations that have been 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 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. I confirm that my company satisfies this requirement and I understand that I may be required to submit proof of our qualification to CBP.”

 

Letters of certification should be sent to:

U.S. Customs & Border Protection

c/o OCEANAIR, Inc.

186A Lee Burbank Highway

Revere, MA 02151

 

• Filers should not to cancel entries previously filed so that they can refile new entries in order to take advantage of the 90-day deferment.