Details of "New and Different" MPF Provisions in Senate-Passed GSP/MPF/TAA Bill
On September 22, 2011, the Senate passed H.R. 2832, a bill to reinstate the GSP program retroactive to its expiration date and renew and revise Trade Adjustment Assistance. The Senate-passed version would raise the MPF and then decrease it, and require it to be prepaid and then reconciled for a certain 2012 time period. While Senate sources state that the prepayment period is needed due to Senate budget rules, one trade source notes that these MPF provisions may be further amended to work in a more normal fashion in the Korea Free Trade Agreement implementing legislation.
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TAA Amendment Added to Bill by Senate Contains 2 MPF Provisions
The TAA amendment adopted by the Senate prior to passage of H.R. 2832 contains two merchandise processing fee (MPF) adjustment provisions, which are in addition to the MPF increase provision approved by the House.
Increase, then Decrease of MPF for Formal Entries
The Senate-passed H.R. 2832 would adjust the MPF for formal entries as follows:
0.3464% for Oct 1, 2011 thru Nov 30, 2015. The MPF on formal entries would be increased to 0.3464% ad valorem (from 0.21%) for the October 1, 2011 through November 30, 2015 period
0.21% for Dec 1, 2015 thru Sept 30, 2016. The MPF on formal entries would return to 0.21% ad valorem for the December 1, 2015 through September 30, 2016 period.
0.1740% for Oct 1, 2016 thru Sept 30, 2019. The MPF on formal entries would be decreased to 0.1740% ad valorem (from 0.21%) for the October 1, 2016 to September 30, 2019 period.
Prepayment of Oct 1 -- Nov 11, 2012 MPF for Formal, Informal Entries
The Senate-passed bill would also require the MPF for formal and informal entries of goods entered on/after October 1, 2012 and before November 12, 2012 to be paid not later than September 25, 2012. The amount that would have to be paid would be equivalent to the amount of such fees paid by the person responsible for such fees with respect to goods entered on/after October 1, 2011 and before November 12, 2011, as determined the by Treasury Secretary.
Reconciliation of Prepaid MPF Overpayments and Underpayments
The Senate-passed H.R. 2832 would also require the Treasury Secretary, no later than December 12, 2012, to reconcile the fees pre-paid pursuant to the above provision with the fees for services actually provided on/after October 1, 2012, and before November 12, 2012 and refund with interest any overpayments or make the proper adjustment with respect to any underpayments. (No interest would be assessed on such underpayments.)
(See ITT’s 09/08/11 news, 11090818 for BP summary of MPF increase provision in House-passed H.R. 2832.
See ITT’s Online Archives or 09/09/11 news, 11090916, for BP summary on the impact of an increase in the MPF (as in the House-passed H.R. 2832).)
Senate’s TAA amendment to H.R. 2832 available here
H.R. 2832 as passed by the House available here