The government is considering how quickly it can get through a legislative fix to U.S.-Mexico-Canada Agreement implementation provisions that allow for duty refunds on post-importation preference claims, but not a refund of merchandise processing fees, said Maya Kumar, director of textiles and trade agreements at CBP. She said on May 22 that CBP officials “do not think that was the intent of the law.” Kumar, who was speaking at the National Association of Foreign-Trade Zones virtual conference, said that if it's at all possible, CBP would like to see that fixed by Congress before USMCA's entry into force July 1. “We’re trying to work with [the office of the U.S. Trade Representative] as well as Congress and see how quickly they can do that,” she said.
Drawback
A duty drawback is a refund by CBP of the duties, taxes, or fees paid on imported goods, which were imposed upon importation as prescribed in 19 U.S.C. 1313(d). More broadly, a drawback also includes the refund or remission of other excise taxes pursuant to other provisions of law.
The delayed due dates for customs duties in Canada don't apply to debts due before March 25, the Canada Border Services Agency said in an April 11 email. “Debt due before March 25, 2020 is payable on the due date identified on the” Statement of Accounts, it said. “Debt due on or after March 25 2020, is payable on June 30, 2020. Only debt due on and after March 25, 2020 is eligible for the June extension,” it said. The CBSA recently extended the due date for regular customs duties to June 30 (see 2003270053).
The deadline for customs payments to the Canada Border Services Agency will be extended due to the COVID-19 outbreak, the agency said in bulletin on March 27. “The timeframe for all payments due to the Agency (duties and taxes on regular imports, re-assessments, penalties, etc) is extended to June 30, 2020,” it said. “This also includes charges on the statement of account of March due on April 1. The CBSA will change the due date automatically, there is no need for companies to apply for the extension.”
A top Commerce Department official tempered fears that the U.S. wants to stifle industry competitiveness (see 2003100044 and 2002180060) as it considers further restricting exports to Huawei and China, saying that is not the administration's goal. “Why would you restrict a U.S. company if you're only going to be enabling their competitor?” said Rich Ashooh, Commerce’s assistant secretary for export administration. “That’s a very important principle to engage in.”
Malaysia’s amended trade and customs-related legislation took effect Jan. 1, according to a Jan. 10 Baker McKenzie post. The changes include replacing the country's customs regulations and free-trade zone regulations and introducing a new format for customs declaration forms. Other changes include the Customs Act of 2019, which increases the power of customs authority to enforce customs laws, collect underpaid duties and penalize non-compliant entities. Malaysia also created record-keeping requirements for a period of seven years for certain importation and exportation activities in free-trade zones. In addition, Malaysia customs now has the ability to offset “any amount of drawback or refund” that is due against “any unpaid amount of customs duty, excise duty, sales tax, service tax … or any other money payable.”
Michael Cerny, previously a lawyer with Sandler Travis, joined Charter Brokerage as chief legal officer, Charter said in a news release. Both Charter and Cerny specialize in drawback issues.
The Government Accountability Office and the Department of Homeland Security Inspector General each released a report on Dec. 17 that noted various issues within CBP's drawback program. The GAO's report suggested that CBP work to flag excessive export submissions and “establish a reliable system of record for proof of export,” among other things. The DHS IG report found that CBP “lacked appropriate documentation retention periods to ensure importers and claimants maintained support for drawback transactions” and didn't scrutinize prior drawback claims enough for claimants during 2011 to 2018.
Export Compliance Daily is providing readers with some of the top stories for Dec. 9-13 in case you missed them.
Automated Export System and Electronic Export Information filings are not yet considered proof of exportation for drawback purposes, according to a Dec. 9 alert from the National Customs Brokers & Forwarders Association of America. NCBFAA said it received the “advice” from CBP after “many inquiries and some confusion” about proof of export rules.
The trade war that President Donald Trump began with China 16 months ago is creating pain for businesses, but there's a deeper strategic mistake to consider, said Matthew Goodman, senior vice president for Asian economics at the Center for Strategic and International Studies. Goodman, who was speaking during the first session in a Congressional Trade Series on Nov. 19, said, “I still don't know what the basic strategic goal is here." He said he didn't know whether the administration wants to get structural changes to China's economy, as it claims, or whether it wants to reduce the bilateral trade deficit, or to contain China's rise.