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Instructions for Calculating Merchandise Processing Fees for Drawback

Issued: August 3, 2000

Public Instructions For Calculating Merchandise Processing Fees For Drawback Under 19 U.S.C. 1313(j)

Background/Purpose

As a result of the TEXPORT decision, CBP has been directed to refund the MPF if claimed by the filer on drawback claims under 19 U.S.C. 1313(j)(1) {Entry type 42} and 19 U.S.C. 1313(j)(2) {Entry type 45}. It is anticipated that it will take at least one full year for CBP to make changes to the current ACS drawback program necessary to track and refund fees claimed and accurately decrement associated import entries.

Definition

The court, in Texport Oil Co. v. U.S., 185 Fd.3d. 291 (Fed Cir 1999) found the fee imposed by 19 U.S.C. 58c(a)(9) to be a fee imposed by reason of importation and eligible to be claimed as drawback under 19 U.S.C. 1313(j). The MPF subject to drawback is based on a relative value formula.

Interim Procedures

All drawback claims requesting a refund of the MPF must be clearly identified by marking or annotating the document "MPF REFUND REQUESTED".

The claim must contain a separate calculation worksheet for the fees. This calculation sheet must be for MPF refund only and remain separate from the calculation sheet for other duties and taxes for which drawback refunds are requested.

The value of each unit of entered merchandise subject to the fee must be calculated relative to the total entered value of the merchandise subject to the fee. While duty-free merchandise that is subject to the fee is to be included in the relative value calculation, merchandise that is exempt from the fee must not be included.

The total value of each invoice line item of merchandise subject to the fee is calculated to six decimal places. The line item value as a percentage of total value forms the relative value ratio. The relative value ratio is multiplied by the amount of MPF paid.

The amount apportioned to each line item is multiplied by 99 percent to calculate the amount relative to the line item that would be eligible for drawback. The amount applicable to the line item is divided by the number of units covered by the line item to calculate the amount of drawback eligible per unit. The claimed amount is to be rounded to the nearest two decimal places.

The following is an example illustrating the calculation procedure:

  Total Value Weighted Ratio Weighted Ratio/MPF
per Line
99 %
of MPF per line
Line Item Number - Item 1
Number of Units - 5,000 Widgets
Individual Value - $10 each
$50,000 .147059 $71.323615 $70.61
Line Item Number - Item 2
Number of Units - 6,000 Gismos
Individual Value - $15 each
$90,000 .264706 $128.382410 $127.10
Line Item Number - Item 3
Number of Units - 10,000 Doodads
Individual Value - $20 each
$200,000 .588235 $285.293975 $282.44
Grand Total $340,000 1.000000 $485.000000 $480.15

If the total fee paid was $485, the amount attributable to each line item is calculated by multiplying $485 by the applicable ratio. For line item 1, the amount of the $485 is $71.323615 (.147059 X $485 = $71.323615). The amount attributable to line item 2 is $128.382410 (.264706 X $485 = $128.382410). The amount attributable to line item 3 is $285.293975 (.588235 X $485 = 285.293975)

The per unit drawback for each line item is calculated by dividing the total amount of drawback eligible for the line item by the number of units in the line item. For line item 1, the drawback eligibility per unit is $.014122 ($70.61 divided by 5,000 = $.014122). If 1,000 widgets form the basis for a drawback claim under 19 USC 1313(j), the total amount of drawback attributable to the MPF is $14.12 (1,000 X .014122 = $14.12).

The drawback entry cannot be liquidated until ACS enhancements have been implemented for the Merchandise Processing Fee. The MPF refund will be done at the time of liquidation.

The customary accelerated payment of duty and taxes should proceed regardless of the request for MPF refund. The accelerated payment does not include the MPF refund.

Protest/Reliquidation

Any protest for this issue must contain the same data as required for requests to refund the MPF on drawback claims prior to liquidation. However, the calculation should be based on the liquidated value as opposed to the entered value.

The Protest must contain a separate calculation worksheet for the fees. This calculation sheet must be for MPF refund only and remain separate from the calculation sheet for other duties and taxes for which drawback refunds are requested.

Reliquidation(s) cannot be done until the ACS enhancements for the Merchandise Processing Fee have been implemented.

Last modified: 
February 6, 2014
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