U.S. CONGRESS STOPS PROPOSED 10-YEAR MPF EXTENSION

U.S. CONGRESS STOPS PROPOSED 10-YEAR MPF EXTENSION    A proposal by the Clinton Administration to extend the U.S. government’s fee to process imports until 2010 has been stopped by Congress.
   The Merchandise Processing Fee (MPF), which is due to expire in 2003, was implemented under the 1986 Omnibus Budget Reconciliation Act. MPF imposes a tax based on the value of imported goods, ranging from $25 to $485 per import entry.
   Last year, the tax generated about $900 million off 20.4 million entries for government’s general funds. By 2006, MPF could generate as much as $2 billion from 50 million entries, if left unchanged.
   The Administration’s proposed extension was slipped into the Labor/Health and Human Services/Education Appropriations Bill to the anger of many industry leaders.
   During a conference session between House and Senate lawmakers late last week, the provision was erased from the final version of the legislation.
   However, the MPF battle is far from over. Many industry analysts say it’s unlikely that MPF will be eliminated, because of the amount of revenue it generates for the government.
   The Treasury Advisory Committee on Commercial Operations of the U.S. Customs Service (known as COAC) has proposed that if MPF should continue then it should be restructured to support Customs modernization and automation efforts. The committee has also suggested creating a flat fee for both formal and informal import entries.
   COAC has circulated its position to the rest of the industry for review. “It’s important that we reach consensus on this issue,” said James P. Finnegan, director of international trade and compliance for Sony Corp. and chairman of the U.S. Business Alliance for Customs Modernization. “Otherwise it will be difficult to move this forward.”
   Congress is expected to take up COAC’s MPF proposal early next year.