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COVID-19 Trade Update: Potential Duty Payment Deferrals and Border Shutdowns

The coronavirus (COVID-19) is affecting all elements of society – with changes coming every day. These changes include the import, trade and transportation sectors. We will keep you updated on these changes as they occur.

The Department of Homeland Security and US Customs and Border Protection have announced key updates in the past few days:

  1. Closing the US- Canada and US-Mexico border to “non-essential” traffic for 30 days
  2. Potential Duty payment deferrals

CBP has also announced the impact of COVID-19 on operations. For the time being, cargo shipments remain unaffected. The latest details can be found below.

Allowing Potential Delays in Paying Customs Duties/Fees

CBP has announced it will consider providing additional time for importers to pay duties and fees during the emergency on a case-by-case basis by submitting a request to CBP. Recently Customs officials have acknowledged that they are considering the idea of a broader policy to defer duty payments and to delay other filing deadlines. There are several proposals for 90-day deferrals of duty payments, similar to the delay already approved for many tax payments being proposed by the trade. CBP officials have indicated they should be ready to announce their decision on this new policy soon, as early as next week.

In the interim, we can help companies prepare duty payment delay requests. The most recent message from CBP is provided below.

CSMS #42097586 - Additional Days for Payments due to COVID-19

Due to the severity of Novel Coronavirus Disease (COVID-19), U.S. Customs and Border Protection (CBP) will approve on a case by case basis additional days for payment of estimated duties, taxes and fees due to this emergency. Please note we are working on a future message that will provide further information. Please watch your CSMS messages.

NOTE: CBP has confirmed that the March 20, 2020 debit authorizations for the Periodic Monthly Statements and the daily statements have been transmitted to the Department of Treasury. Please work directly with your financial institution if you wish to prevent these funds from being withdrawn. 

Requests should be directed to the Office of Trade, Trade Policy and Programs at OTentrysummary@cbp.dhs.gov.

Closing the Border to Non-Essential Travel (i.e., tourism)

The Administration has announced that the United States would temporarily close the US borders to Canada and to Mexico for non-essential traffic due to rising COVID-19 concerns. Those restrictions have already gone into effect. The Administration has posted Federal Register Notices for these policy changes for the US-Canada border and the US-Mexico border.

NOTE: According to the notices, this policy does not apply to legitimate commercial trade or travel.

The notice indicates that the following will be considered “essential” travel that will continue to be permitted (the list is to illustrate types of travel – other travel may be permitted also):

  • US citizens and lawful permanent residents returning to the United States;
  • Individuals traveling for medical purposes (e.g., to receive medical treatment in the United States);
  • Individuals traveling to attend educational institutions;
  • Individuals traveling to work in the United States (e.g., individuals working in the farming or agriculture industry who must travel between the United States and Canada/Mexico in furtherance of such work);
  • Individuals traveling for emergency response and public health purposes (e.g., government officials or emergency responders entering the United States to support Federal, state, local, tribal, or territorial government efforts to respond to COVID-19 or other emergencies);
  • Individuals engaged in lawful cross-border trade (e.g., truck drivers supporting the movement of cargo between the United States and Canada/Mexico);
  • Individuals engaged in official government travel or diplomatic travel;
  • Members of the US Armed Forces, and the spouses and children of members of the US Armed Forces, returning to the United States; and
  • Individuals engaged in military-related travel or operations.

The notices specifically cite tourism as non-essential travel that will not be permitted.

The notice states that the limits only “apply to passenger rail and ferry travel” at the present time, but in order to fully enforce the measures it will likely impact all modes of transportation.

The notices state these restrictions are temporary in nature and shall remain in effect until 11:59 p.m. EDT on April 20, 2020 (i.e., 30 days).

Potential COVID-19 Effects on Customs Operations

CBP Releases Update on Binding Ruling Requests

CBP released an update (CSMS #42092162) on the processing of binding ruling requests by the National Commodity Specialist Division. These rulings cover many basic customs issues, principally tariff classification, and have been used very often by companies who have questions for coverage of Section 301 to products of eligibility for duty drawback. While CBP continues to issue rulings, the agency asks that all ruling requests by filed via eRulings whenever possible (i.e., filing ruling requests online through the CBP website).

The message notes:

Please be aware that paper binding ruling requests and requests that include or necessitate a sample may be delayed in processing and/or issuance. During this time, it is recommended that all ruling requests be made through the use of eRulings, and include detailed photographs or short videos of the product to be submitted in lieu of samples. However, we recognize that certain commodities require a sample in order for a determination to be made. In such cases, delays may occur. The National Import Specialist assigned to work on your ruling will reach out to you to discuss your options and whether a determination can be made without a sample.

We can help with electronic filing (e-Filing) of ruling requests as well as customs protests.

Effects on Port Operations

The spread of COVID-19 could affect the movement of goods through ports and customs clearance. Just this week, CBP announced a temporary suspension of operations in Houston over a COVID-19 issue:

CSMS #42080912 - Information on Suspension of Operations at Two Port of Houston Authority (POHA) Shipping Terminals

Please be advised that the Port of Houston Authority (POHA) has suspended operations at Bayport and Barbours Cut Shipping Terminals temporarily due to a COVID-19 issue. CBP will work with POHA to ensure orderly business resumption once a decision is made to reopen the terminals. In the meantime, interested trade community members with specific questions regarding cargo matters may contact the Houston Seaport Cargo Resolution team at (713) 454-8049 or the 24/7 help desk at (713) 454-8002.

Happily, CBP reported operations at those two terminals were back to normal the next day. However, the message does point out the potential for disruptions at ports or operations at the border due to the spread of the virus.

Conclusion

We will be providing further tips soon on how to handle these issues through Arent Fox’s COVID-19 task force website. Monitoring the website is a great way to keep track of current developments as they arise.

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