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Reconciliation Changing Under USMCA as MPF No Longer Refundable

Posted June 23, 2020

Guidance included in the latest USMCA Implementing Instructions issued last week confirms that importers will still be able to access U.S. Customs and Border Protection’s voluntary Reconciliation program once the United States–Mexico–Canada Agreement takes effect next month.  
DHS Seal, Change Jar, NAFTA Flags
There will, however, be an unwelcome change when it comes to treatment of the Merchandise Processing Fee, the U.S. government’s nominal user charge on imports, currently assessed at 0.3464% of the value of the goods with a minimum $26.79 and a maximum of $519.76 for formal entries.  

Unlike the North American Free Trade Agreement which allowed for refund of the MPF, the new USMCA does not. Consequently, after July 1, the MPF will no longer be refundable on post-import claims, including those entered using CBP’s Reconciliation program.

Note: A bill introduced to Congress earlier this month seeks to amend this the USMCA, but is not expected to be passed before the July 1st deadline.


Post-NAFTA Reconciliation Process

To help ensure the MPF is properly refunded when applicable, once the USMCA goes into effect, separate Reconciliation Entries should be made for goods that fall under the USMCA (entered on/after July 1st) and for goods covered under the provisions of NAFTA (entered before July 1st).


Bottom Line

The policy change means that if an importer claims their goods qualify for duty-free treatment subsequent to importation, a refund can be sought only on duties paid but not the MPF.

This underscores the importance of providing USMCA certificates to your customs broker prior to shipping or together with the cargo documentation. Failure to do so can lead to a post-import refund claim having to be made, resulting in you being unable to recover the full amount of monies that were initially paid.


Need More Information

If you have any questions about this issue or how other administrative or regulatory changes in the USMCA from its predecessor might impact your company, don’t hesitate to contact one of our knowledgeable trade experts today.


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