Special Quest™

April 20, 2020

COVID-19: 90-Day Postponement of Duties FAQ

CBP has posted an FAQ regarding the 90-day Postponement. In addition to CBP's FAQ, Avalon's President, Lisa Gelsomino who is the Trade Co-Chair for COAC and has participated in multiple trade calls has summarized the following FAQs for more information:

1) What is the criteria for an importer to qualify for the 90-day postponement?
As outlined in the FRN and CSMS messages from CBP, an importer of record (based on the importer of record number obligated for entry/entries) must demonstrate financial hardship due to COVID-19. This means an eligible importer's operation must be 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 or April 2020 are less than 60 percent of the gross receipts for the comparable period in 2019.

2) Is approval from CBP required for this postponement?
No, but the importer of record is responsible for maintaining records to evidence this hardship and provide authorization to the customs broker as well as to CBP upon request for audit purposes. We also recommend customs brokers obtain written authorization from their importer clients, and the NCBFAA has provided suggested wording.

3) Can a broker acting as importer of record also request this 90-day postponement for underlying importers?
No, it comes down to the importer of record number that is provided on the entry/entry summary. This is the legal entity and party that is entitled to the 90-day postponement due to hardship.

4) What if the importer of record is submitting payment to the customs broker who is handling under a broker statement. Can these importers be taken off a customs broker’s statement to postpone the payment of duty for up to 90 days?
Yes, the customs broker has up until midnight tonight, 4/20 to pull any entries off the statement due tomorrow on 4/21. Brokers have the option of changing the payment due date in ACE to reset when payment is due whether on daily statement and/or monthly statement for either broker or importer pay. Per CBP, ACE has been updated so importers and brokers can now remove entries from a statement even if made via Remote Location Filing (RLF). These entries won’t need to be put on a single pay, you can move to the next statement or up until any statement when the 90 day period ends. For future statement dates, importers and customs brokers would need to be sure to update the day before payment is due to continue to take advantage of the 90-day duty deferral through 7/29/2020 for single pay or August based on statement dates.

5) What if the customs broker has already authorized the statement for payment?
Yes, customs brokers still have the ability to remove entries from the statement today under these circumstances.

6) What if an entry was already removed from a Period Monthly Statement (PMS) and changed to Single Pay? Can this now be put back on PMS and changed to pay type 1, can this be put back on PMS to get the benefit of monthly deferral at a later date?
Yes, the modifications made in ACE will allow you to do this. Please refer to the CSMS messages for the examples provided on the different statement dates and when they would be due with the 90-day postponement schedule.

7) There are many importers that want to defer entries that are eligible before Midnight tonight. Will CBP consider a snow day to provide additional time?
CBP does not have authority to issue snow days under this pandemic and why the Presidential Executive Order and FRN had to be issued so no additional time can be provided.

8) What if the importer has regular duties, taxes and fees as well as AD/CVD or Trade Remedies for Section 201, 232 or 301?
For the statement due on 4/21, there is not much customs brokers can do to pull these entries since they were already consolidated. If there is any AD/CVD entry type (03, 07, etc.) or Trade Remedies as part of the entry including Quota, the whole entry summary must be paid in its entirety. Going forward, CBP has provided authorization to submit separate entries, one entry for the regular duties, taxes and fees that can be postponed for 90 days and another entry for the AD/CVD and Trade Remedies that must be paid timely.

9) What if there is an Exclusion Order?
If the exclusion applies to all line items on an entry and there is no other AD/CVD or Trade Remedy transactions as part of an entry, the payment for this entire entry summary can be delayed by 90 days. If there is any AD/CVD or Trade Remedies still attached to the entry, it would not be eligible for postponement.

10) What about entries that were already filed timely without payment, will CBP allow these payments to be delayed and will there be liquidated damages for late payment?
Yes, these payments are eligible for postponement and no interest should accrue and no liquidated damages should be issued. Per CBP, all ports have been advised to use discretion. Avalon will be working with our customs broker and importer clients to cancel or mitigate any liquidated damages issued for entries or transactions in March or April where extenuating circumstances from the pandemic caused any delay including Importer Security Filings, AMS Filings, etc. Please reach out to our Bond Claims Department for any assistance needed at bclm@avalonrisk.com.

11) What about reconciliation entries that have been scheduled to be paid in March or April, can these be delayed?
No, since the entry dates occurred outside the dates of the pandemic. Any increased duty bills and/or supplemental bills and/or reconciliation payments are still due on time or will continue to accrue interest and will be subject to liquidated damages for late payment.

12) What about air passenger fees, can these be delayed beyond payment due on 4/30?
No, these are not entries and not eligible for the 90-day postponement since the fees were collected outside the March-April period that is covered by the FRN. Please see the FRN and CSMS messages for further details on this.

13) What about importers of record who are open on-line or had their suppliers shut down?
CBP indicated that as long as the importer of record could prove hardship of partial closure AND receipts being down from closure of supply chain in some way, they could be eligible. However, CBP is looking to clarify this more in an FAQ.

14) Does the importer of record apply at the 9-digit or 11-digit level when an importer has different trade names or divisions covered under the same bond?
CBP indicates they would like to handle this on an account basis at the 9-digit level, but is seeking guidance from legal counsel and will clarify this in an FAQ.

15) How will other brokers or sureties know that an importer is postponing payment?
ACE will be updated with a new Payment Date that will be visible to any importer or customs broker on the entry transaction. Sureties are currently working with CBP to get this data in our Automated Surety Interface (ASI). If we are not able to obtain through our ASI data, we may need to reach out to the importer or customs broker for additional clarification, especially if we receive liquidated damages for late payment of duties that should not have been issued. We appreciate your patience since sureties have limited visibility to any line level data.

16) What is the likelihood of extending beyond March or April? Should the FRN be used to provide comment on these issues?
CBP will be collecting information on how much duty is being deferred and how many importers are being impacted but does not know if any extension will be considered. If so, CBP would hope to give the trade more lead time by having this information they collect over the next couple weeks and the comment period. CBP encourages everyone to submit any comments they have about the process.

17) What about FedWire as options for payments?
CBP indicated this would only be allowed on a case by case basis. Please contact the Credit Gateway Customer Care at 1-877-815-1206 or 314-425-1841.

18) What about post summary corrections?
These cannot be filed until the entry is paid.

If you have any questions, please refer to the referenced links in the Special Quest or email Lisa Gelsomino at lgelsomino@avalonrisk.com.

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