Trade Adjustment Tariffs & Duty Payments

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For decades, Customs brokers have been in the precarious position of advancing Customs duty on behalf of importer clients, being reimbursed at a later date. With many businesses not paying for 30-60 days, high duty outlays strain a Customs brokers cash flow and can, on occasion, jeopardize their ability to service clients. In rare cases, Customs brokers can be forced out of business due to the inability to cover duty.

Unfortunately, the significant duty increases now occurring as a result of Sections 232 & 301 Trade Adjustment Tariffs are severely exacerbating this problem. When one considers, rationally, the cost of money, and that Customs brokers generally do not charge the cost of money in the act of bankrolling an importer’s business, it should not be seen as unreasonable that the industry is now asking importers to begin paying their duty direct. Additionally, this serves as a protection to the importer, in the event of non-payment by the broker.

Accordingly, it has become necessary for FgL to request, and in some cases require, clients to provide advance payment of duty on pending shipments. In order to accomplish this, the importer will be provided a CBP7501 reflecting the duty amount, and bank information by which to remit the funds using the importer’s bank’s wire transfer or ACH facility. Upon confirmed receipt of the funds, the entry will be filed.

Additionally, importers are strongly encouraged to apply for participating in CBP’s direct ACH payment program – click here for more information.

  • FgL is not currently equipped to generate advance duty only invoices. For this reason, the CBP7501 will serve as substantiating documentation.
  • FgL cannot provide direction on how to create a wire transfer or ACH payment; consult your accounting department or bank for assistance.

RESOURCE: http://fglogistics.com/duty-outlay-policy/