CBP, Treasury Reviewing Effect of Cost of Living Increases on MPF Proposal

CBP and the Treasury Department are working together to look at how recent statutory changes to the merchandise processing fee affect changes to the MPF required by trade agreement, said CBP in a presentation on the issue. The Fixing America’s Surface Transportation (FAST) Act, signed into law late last year (see 1512070011), required the MPF to move along with the Consumer Price Index. Meanwhile, the Office of the U.S. Trade Representative and CBP are briefing Congressional committees and industry members on the planned MPF changes, which are necessary to align with Trans Pacific Partnership provisions (see 1603090030).

Within a group of frequently asked questions about the proposed MPF changes (here), CBP said it and Treasury are coordinating to " to determine the implications of the FAST Act on the new MPF structure." The TPP-related proposal calls for a four-tiered MPF approach meant to satisfy TPP provisions that prohibit ad valorem import fees.The first shift to the MPF based on CPI, if deemed necessary by Treasury, was to happen April 1, the FAST Act said. The Treasury Department didn't comment.

The TPP-related changes would also have a limited effect on Foreign Trade Zones, said CBP in the presentation. "The new structure does not alter how importers can use FTZs or file FTZ entries," it said. "Our analysis shows that the impact to FTZ entries is minimal in the aggregate as less than 2% of all FTZ entries are subjected to MPF under our analysis." As next steps, CBP and USTR "will continue to meet with the trade community to obtain feedback on the proposed structure" and devise a "an implementation strategy," CBP said.

CBP’s Office of the Chief Financial Officer oversaw "the initiative to include coordinating requirements and feedback among other government agencies." In considering alternative MPF structures, CBP sought to find a structure that would result on similar MPF assessments and would be feasible for industry and government to implement, the agency said. CBP looked at the "the entire portfolio of entry summaries subjected to MPF in FY2015" and found the top 25 importers by value made up 18.5 percent of all import value during the year, it said. Nearly half, 49 percent, of entry summaries were valued at $19,000 or below, while 15 percent were worth $100,000 and above, said CBP.