CBP Abruptly Ends Duty Deferral Request Process; Payments Due March 27

CBP will no longer take requests to defer payments of customs duties, and payments of previously deferred duties must be “initiated” by March 27, the agency said in a CSMS message. “Single payments, daily and periodic monthly statement payments of estimated duties, taxes and fees that should have been tendered from 3/20/2020 through 3/26/2020, must be initiated by 3/27/2020,” it said. “If a trade member did not pay CBP for estimated duties, taxes and fees due 3/20/2020 through 3/26/2020, payment should be initiated via FedWire or ACH credit by 3/27/2020.”

The notice marks an abrupt shift from the deferral policy announced less than a week ago and casts doubt on the eventual success of previously discussed plans to broadly defer customs duties during the COVID-19 pandemic (see 2003200038). “Although the temporary option was provided to extend payment due dates, if the money was withdrawn from the account, these funds are legally owed to CBP and a refund will not be issued,” it said. “Trade users need to work with their financial institutions to ensure that future ACH debit and ACH credit payments to CBP are processed appropriately.” CBP said it “will retain the right to allow additional days for narrow circumstances, including a physical inability to file entry or payments, due to technology outages or port closures,” the agency said.

It's not clear what prompted the change, but the CBP case-by-case deferral policy recently drew objections from domestic industry groups (see 2003250034). A recent Reuters report quoted White House adviser Peter Navarro as seemingly against deferred tariffs of any kind. It's unclear whether the deferral notion is all but scuttled or if CBP could limit deferrals to duties, taxes and fees that don't include trade remedy duties. Regardless, “this is a far cry from previous CBP references about working on a comprehensive solution for duty payment deferral,” Sidley Austin lawyer Ted Murphy said in a blog post. CBP didn't comment further.

The National Customs Brokers & Forwarders Association of America is working with its members to make sure the duties are paid as needed, NCBFAA President Amy Magnus said. Magnus said she is glad the guidance came sooner rather than later, and that the group is advising members to contact clients that were granted a deferral so a payment can be made by March 27. It's unclear what happens next in terms of any sort of duty deferrals, she said.

American Association of Exporters and Importers CEO Marianne Rowden speculated that several factors were involved. “I suspect there is a real split within the Administration on suspension and delay of duties collection, both regular and special (section 232/301) as we have been waiting for the Executive Order on Buy American of these critical products,” she said in a March 26 email. “I would not be surprised if either CBP was overwhelmed with requests or the Administration told CBP to stop granting such requests.” The AAEI was one of multiple trade groups that asked the Trump administration to defer duty collections to help reduce cash shortages (see 2003230039).