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Changes to Merchandise Processing Fee under Consideration

The U.S. government is considering a plan to restructure the merchandise processing fee in light of a provision in the Trans-Pacific Partnership that prohibits the MPF from being levied on an ad valorem basis. The MPF is currently assessed at 0.3464 percent of merchandise value for entries above US$2,500, capped at US$485 per entry.

Sources state that the proposal is intended to be revenue neutral, be easily administered and have minimal impact on importers. With these goals in mind, the proposal would apply to all formal entries of merchandise imported into the United States and  impose a minimum US$30 MPF on entries valued between US$2,501 and US$20,000, which represents approximately 50 percent of formal entries filed in 2015. A US$120 MPF would be imposed on entries valued from US$20,001 to US$55,000 and a US$260 MPF would be imposed on entries valued from US$55,001 to US$130,000. The MPF for all entries valued at more than US$130,000 would be capped at US$500.

Current exemptions from MPF assessment (e.g., under preference programmes) would remain in place. MPF for informal entries valued between US$800 and US$2,500 and shipped to the United States via air, ship and international mail is imposed at a set fee of US$2, US$6 or US$9 and will be unchanged. No MPF is assessed on entries below US$800 (pursuant to the recently enacted customs reauthorisation bill that amount was increased from US$200 effective 11 March).

According to sources, 47 percent of importers would see a decrease in the amount of MPF they pay annually under this proposal, with an average decline of US$760. The remaining 53 percent of importers would be expected to see an average increase of US$119.

Input is still being gathered and the proposal could be revised before its anticipated inclusion in TPP implementing legislation that the White House hopes to submit for congressional approval later this year.

Content provided by Picture: HKTDC Research
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