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10-24-2011 - Merchandise Processing Fee (MPF) Increase

The merchandise processing fees (MPF) assessed on imports increased by more than 60%. MPF is collected by CBP on a per entry basis and defined as “a fee assessed to process merchandise entering into the U.S. and ensures compliance with customs laws and trade rules”.

The increase is complicated by the fact that conflicting language was included in multiple trade legislation bills including: Colombia, Korea and Panama FTAs and the renewal of the Generalized System of Preferences (GSP). Nonetheless, it appears as though the MPF increase will be implemented as follows: 

  • MPF will increase from 0.21% to 0.3464% for the period October 1, 2011 to June 30, 2021.
  • Minimum MPF of $25.00 and maximum MPF of $485.00 will not change.
  • CBP is updating systems to accept the higher MPF and will give the trade one week’s notice prior to implementing the higher rate.
  • CBP will issue bills to importers for the difference in MPF from October 1, 2011 through the day before the higher rate goes into effect.
  • Bills will be generated on a per entry basis for entries in which the amount to be collected exceeds $20.00.

In an effort to accommodate offsets in fiscal years a rather unique accounting tactic is proposed in that Congress is requiring the MPF be pre-paid for entries filed between October 1, 2012 and November 12, 2012. Prepayment is required by September 25, 2012 with the payment amount based upon entries filed between October 1, 2011 and November 11, 2011. Differences between the prepayment amount and the actual amount will be reconciled at a later date.

Geo. S. Bush will continue to monitor the MPF changes and keep clients apprised of recent developments. Meanwhile, please contact your GSB representative for questions or email, info@geosbush.com.