MPF

Retroactive Merchandise Processing Fee (MPF) Billing

Most importers are aware that the MPF was increased last year from 0.21% to 0.3464%. The minimum and maximum remained at $25 and $485 respectively. It was signed into law on October 21, 2011 with a retroactive date of effect of October 1, 2011. However Customs did not complete their programming of their computer systems to accept the new rate until November 5, 2011. All entries from October 1, 2011 and November 4, 2011 were initially entered at the old rate of 0.21%. Customs advised that these entries would be billed for the difference at a later time.

Customs did not get around to retroactive billing of MPF until the week of June 11, 2012. Importers who had entries from October 1, 2011 through November 4, 2011 should slowly begin to receive bills from Customs. Customs indicates that the additional bills will be sent out in batches from June to September 2012. Please note that de minimis amounts (increases of less than $20) will not be billed.

There are a few issues I would like to point out to our importers now that I have started to see the billings come in.

  • CBP has indicated that they will not assess interest on bill amounts for the increased MPF. However if you look closely at the CBP bills, you will likely find two amounts to be paid as well as an interest rate. One amount represents the additional MPF due. The other amount represents the amount due if the payment is received late. We urge importers to quickly send their payment to Customs before the “late date” in order to avoid paying interest for a late payment.
  • Please check closely to make sure that the bill from Customs is for an entry that was actually entered between October 1, 2011 and November 4, 2011. One importer already showed us a bill from Customs for an entry that was entered in September 2011, before the MPF increase. Furthermore, we received a message from Customs today acknowledging that they did make some errors in billing. Entries prior to October 1, 2011 should NOT have received this additional billing. If you receive an additional billing for an entry prior to October 1, 2011, please check with the Customs broker to confirm if the bill should be paid. Customs has indicated they will reliquidate these incorrectly billed entries by October 4, 2012 at the original rate of 0.21%. If you have already paid the additional amount, you should see a refund in the next couple of months. If you don’t received a refund by the end of October 2012, it is important that you discuss with your Customs Broker to file a Protest to claim back the incorrectly paid MPF.
  • Importers can pay Customs with one check, as long as a supplemental spreadsheet is provided, which lists each bill number and bill amount.

For those of you who have MPF additional bills that must be paid, get the payment sent out to Customs ASAP. Failure to pay bills due to Customs can lead to sanctioning. Feel free to contact us if you have any questions.

-Jimmy Ting

jimmyting@great-world.com