U.S. Senate Passes Bill Extending GSP Program and Raising MPF on Imports

The U.S. Senate last night passed H.R. 2832, legislation that will renew the expired Generalized System of Preference (GSP) program and extend the program until July 31, 2013. Because the Senate version included an amendment to extend the Trade Adjustment Assistance program, the House will have to vote on the Senate version of the bill before it is sent to President Obama for signature. Nevertheless, the bill should be enacted into law soon.

Importantly, the legislation provides that the GSP program will be renewed retroactively for all GSP eligible entries made after December 31, 2010. Once the bill has been signed into law CBP will issue instructions on how to obtain refunds for all GSP eligible imports entered during the past year.

When the GSP program expired in the past U.S. Customs and Border Protection (CBP) automatically liquidated or reliquidated items flagged in the ABI system with the GSP Special Program Indicator (SPI) "A" as duty-free and issued refunds to importers without the need to submit individual claims.

Nevertheless, U.S. importers should ensure that their customs brokers continue to use the GSP Special Program Indicator for eligible entries and to monitor their post December 31, 2010 GSP entries to ensure that the correct refunds are received. The bill provides that any unflagged GSP eligible entries must be submitted to CBP within 180 days after the enactment of this bill.

U.S. importers should also aware that the GSP renewal bill contains an increase in the Merchandise Processing Fee (MPF) on ALL applicable U.S. imports starting on October 1, 2011. The MPF will increase from 0.21% ad valorem to 0.3464% ad valorem. However, the MPF paid on a single entry will still be capped at $485.