US Postponement and the Drawback Process

Posted by Lawrence Tobia

Tradelane-Header2

As many of our readers are aware, on April 19th, 2020, US Customs and Border Protection (CBP) announced the postponement of duties for formal entries of merchandise entered, or withdrawn from a warehouse for consumption in March and April 2020 for importers experiencing significant financial hardship due to COVID-19. 

At this time, CBP’s message defined a significant financial hardship as:

  • Operations are fully or partially suspended during March or April due to government orders limiting commerce, travel, or group meetings due to COVID-19
  • The importer’s gross receipts for March 13-31, 2020 or April 2020 are less than 60% of the gross receipts of the comparable period in 2019

CBP’s message also noted that an eligible importer does not need to submit financial or qualification documents at the time of entry, but it must be available to CBP upon request. Duties, taxes, and fees on eligible entries can also be postponed up to 90 calendar days. 

Entries subject to anti-dumping, countervailing duties, or trade remedies under Section 232, 301, or 201 are not eligible for postponement.

CBP will not return deposits of estimated duties, taxes, and fees that have already been paid. 

Further clarification for our US Duty Drawback customers, based on CBP’s FAQs, relates to the viability of drawback claims if the payment on estimated duties is deferred.  Customs clarified that drawback claims should not be filed and that claims may be liquidated only after estimate duties are deposited with CBP. 

So, filers who are delaying duty payments should not file drawback claims until payments have been properly made on the import entries. 

We continue to wish everyone the best in these difficult times.  If you need us, we are here to help.

New Call-to-action

Lawrence Tobia

Written by Lawrence Tobia

For more than 25 years, Larry has been working with the U.S. trade community designing, implementing and managing Customs duty and fee recovery programs. He's worked for companies in every industry, including automotive, chemical, retail, and pharmaceutical. Nearly half of that time was spent as the Vice President of a prominent drawback specialist and customhouse brokerage firm in New York City. Since 1999, Larry has been Principal for Drawback Services at Tradewin.