Customs Modernization Group Displeased With Shift in CBP Deferral Policy; Domestic Industry Groups Celebrate

CBP's abrupt shift in policy for case-by-case customs duty deferrals amounts to additional risk to the smaller companies that are facing existential threats due to the COVID-19 pandemic (see 2003260047), the Business Alliance for Customs Modernization said in a March 26 email. “BACM is disappointed with CBP’s decision to stop accepting individual requests to defer the payment of customs duties, taxes and fees,” said Sidley Austin lawyer Ted Murphy, who represents the group. “We understood that this was meant to be a short-term measure to help primarily small and medium-sized companies deal with the devastating impact COVID-19 is having on the U.S. economy, while CBP pursued a more comprehensive solution applicable to all importers,” he said in response to a request for comment. “CBP’s decision will hurt those small and medium-sized businesses the most.” CBP announced on March 26 it would no longer take requests to defer payments of customs duties, less than a week after saying it would consider such requests.

While the notice “does not explicitly state that CBP is no longer working on that comprehensive solution, BACM is concerned and will be seeking to confirm with CBP Headquarters,” Murphy said. “A short term deferral of the obligation to pay customs duties, taxes and fees would really help a lot of companies right now.”

The Coalition for a Prosperous America celebrated the development in a news release. “We’re very pleased to see Customs retract its ‘stop-collecting-duties’ proposal,” said Michael Stumo, CEO of the CPA. “This is a victory for domestic manufacturers. We won, and we’re grateful to the administration for heeding the message of millions of concerned workers throughout the nation,” Stumo said. “Continuing tariff collections is particularly important at this time. The U.S. Treasury benefits from the collection of funds during a time of national emergency. CBP should continue to enforce current standards and see that Treasury is supported in this time of need.” The group was among the domestic industry organizations that pushed back against the idea (see 2003250034).

A domestic shrimp group also agreed with CBP's new stance and continued to make its case against deferrals in a March 27 letter to the agency. “Proposals to provide deferrals of deposits on antidumping and countervailing duties are targeted towards the narrow portions of American supply chains polluted with unfairly-traded imports,” the Southern Shrimp Alliance said. Supporters of the deferral idea that said it is similar to the delayed tax deadline “obfuscated the fact that a substantial portion of goods imported subject to antidumping and countervailing duties are done through foreign entities, not American businesses,” the group said. “Similarly, importing interests have elected not to explain that a broad duty deposit deferral period would facilitate the importation of huge volumes of goods from China at a time when that country’s manufacturing facilities and export infrastructure roar back into operation and American producers and manufacturers now confront the virus that had previously shuttered them.”