CBP Recommends Delaying Reconciliation Entries for USMCA Until MPF Fix Is Clearer

Importers may want to delay filing for U.S.-Mexico-Canada Agreement reconciliation because the USMCA currently doesn't allow for post-entry refunds of merchandise processing fees, CBP officials said during a National Association of Foreign-Trade Zones webinar on June 16. Maya Kamar, CBP director for textiles and trade agreements, said that although the Office of the U.S. Trade Representative is working with Congress for a legislative fix to the issue, CBP doesn't yet have clarity on whether such a bill will pass (see 2006050034).

Kamar said she also doesn't know if the legislative fix will be retroactive, if importers filed post-importation preference claims and paid the MPF. “Definitely flag the entry, but if you can, don’t file the recon,” she said. “I hope to have a better answer before the end of the year.”

Customs officials talked about other issues with the transition from NAFTA to USMCA during the presentation, such as the fact that there will be informed compliance because of the challenges of a mid-year change and because of the impact of the COVID-19 pandemic on operations. Kamar said that will be six months for nearly all sectors, but added that “we're probably going to do the first year” for the auto sector because of the unprecedented complexity of auto rules of origin. Those rules of origin don't just touch the contents of the product being imported, but the conduct of producers over the past year, in pay and in purchasing.

One of the elements of that informed compliance will have to do with producing documentation for preference claims, she said. “We usually give you 30 days to give such documentation,” she said, and now will probably offer 120 days to respond. But Kamar cautioned that companies should not ignore requests, noting that “25% of all the claims we deny, it’s because we have radio silence.”

One of the attendees asked CBP whether errors in the uniform regulations would be corrected before being published in the Federal Register. Kamar said CBP does recognize the errors, but because the uniform regulations are negotiated between the three countries, USTR has to work with Mexico and Canada to fix them, and she believes they're working on that. On June 16, CBP updated its implementing instructions to incorporate the uniform regulations.

Adam Sulewski, USMCA Center project leader at CBP, said that there will be an opportunity after July 1 to make technical corrections.

Under NAFTA, importers mark goods as either MX or CA, and under USMCA, goods will be marked “S,” though some agricultural products should be entered as “S+.” A list of all the Harmonized Tariff Schedule codes that are S or S+ has not yet been published, even though entry into force is 14 days out. Kamar said CBP understands the urgency, as she said “we need it to program [ACE] as well. We feel your pain.”