Importers Facing “Significant Financial Hardship” May Defer Duty Payments for 90 Days

Date: 04/20/2020

On April 18, 2020, President Trump issued an Executive Order providing authority to the Secretary of the Treasury, under 19 U.S.C. § 1318, to extend the deadline for payments of certain estimated duties, taxes, and fees for importers suffering significant financial hardship during the national emergency created by the COVID-19 novel coronavirus pandemic. Pursuant to the Executive Order, the Department of the Treasury and U.S. Customs and Border Protection (“CBP”) jointly issued a Temporary Postponement of the Time to Deposit Certain Estimated Duties, Taxes, and Fees During the National Emergency Concerning the Novel Coronavirus Disease (COVID19) Outbreak (the “Temporary Final Rule”), which temporarily postpones for 90 days the deadline for importers with a significant financial hardship to deposit certain estimated duties, taxes, and fees that they would ordinarily be obligated to pay as of the date of entry, or withdrawal from warehouse, for consumption.
This temporary postponement applies to merchandise entered, or withdrawn from warehouses, in March or April 2020, and no interest will accrue for the deposit of the estimated duties, taxes, and fees during the 90-day postponement. The Temporary Final Rule explains that “significant financial hardship” means:
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.
Qualifying importers do not need to file any additional documentation with CBP to be eligible for the temporary postponement, but the importer must maintain documentation demonstrating “significant financial hardship” as qualification for the postponement.

Importantly, the temporary postponement does not apply to entries subject to certain trade remedies, including antidumping and countervailing duties, and Section 301 (tariffs on Chinese goods), Section 232 (steel and aluminum tariffs), and Section 201 duties. The Temporary Final Rule also provides that “any entry summary that includes merchandise subject to those trade remedies is not eligible under this rule.” Additional information is contained in CBP Cargo Systems Message #42423171. The attorneys at Torres Law are monitoring the situation and are ready to assist.