CBP Considering Multi-Tiered MPF
CBP is considering a four-tiered fee structure to replace the current framework of the merchandise processing fee to implement MPF changes dictated by the Trans-Pacific Partnership, said Jon Kent, a lobbyist for the National Customs Brokers & Forwarders Association of America. An actual switch from an ad valorem to a flat-fee rate, as required in the TPP (see 1512150082), is still a ways off, but would likely have to be incorporated in any TPP implementing legislation, he said. The revised fee, however, would likely apply to all imports, not just those within the TPP’s scope, he said.
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The impact of such a structure is an open question, said Kent. “Frankly, I don’t know whether that’s something that trade can embrace or not,” Kent said. “Brokers function as the collector and transmitter of the MPF, but they aren’t paying the freight, and so the question will have to reside with the importing community as to whether they take to these proposals that are being developed.” CBP is “getting close” to engaging industry on how to implement the new fee structure, but there’s also “no rush,” as TPP’s deadline for the changes is three years after implementation. MPF is currently assessed at a 0.3464 percent rate on formal entries, with per-entry minimums and maximums. CBP did not comment.
It would be no surprise if CBP has not started reaching out to Congress yet about the changes, but the agency knows it has to, after it collects sufficient industry input, Kent said “It’s the chicken and the egg,” he said. “Do you get something that you can defend and that you’ve vetted a little bit with the private sector before you go to Congress, or do you go to Congress, get Congress signed on, and then have the entire private sector go up for grabs?” At least since December, Congressional staffers have been working on a bipartisan basis to address concerns that TPP’s MPF provisions have spurred regarding concerns over U.S. revenue stability and losses to importers.
A congressional staffer said the House Ways and Means Committee asked CBP to study the issue and evaluate potential options. The staffer described the collaboration between the Congress and the agency as “a work in progress,” while the committee explores all options. Ways and Means is working to ensure that a flat fee doesn’t create “winners and losers,” especially at small businesses, the staffer said. Mike Mullen, executive director of the Express Association of America, said CBP is still in the internal discussion stage, and several outstanding questions do not yet have answers.
One question, Kent said, is how the government will tackle MPF’s structural changes presumptively alongside MPF cost-of-living increases required by April by the Fixing America’s Surface Transportation Act (see 1512070011). “So far, I’m not getting any answers from CBP, but I’m inquiring,” Kent said.