CLINTON ADMINISTRATION REQUESTS EXTENSION OF MPF UNTIL 2010

CLINTON ADMINISTRATION REQUESTS EXTENSION OF MPF UNTIL 2010    The Clinton Administration has proposed to extend the Merchandise Processing Fee (MPF) on imports through 2010.
   The tax, which is supposed 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. The money generated from the tax goes into the government's general fund.
   In fiscal 1999, MPF generated $900 million on 20.4 million import entries. By 2006, MPF would generate as much as $2 billion from 50 million entries.
   The Treasury Advisory Committee on Commercial Operations of the U.S. Customs Service (COAC) has suggested making MPF a flat fee for both formal and informal entries and to make sure money raised goes towards Customs modernization.
   The development of Customs future system, Automated Commercial Environment, is expected to cost $1.4 billion over four to five years.
   COAC has issued a questionnaire to the shipping industry regarding how much the industry spends on MPF. They plan to collect results by June 5 and prepare for discussions with congressional budget authorities, said Christine Berghofer, with Arthur Andersen and a member of COAC.
   Some in the industry feel it will be a tough fight to get the MPF to fund Customs modernization.
   “It's possible to see a bite taken out of it, but I see the bulk of it still going into general Treasury funds,” said Jon Kent, Washington representative of the National Customs Brokers and Forwarders Association of America.
   “Guaranteed, there are people looking at how to spend this money,” said former Customs Commissioner George Weise, who recently joined Vastera, the information systems developer. “You (the industry) shouldn't allow it to be extended in any form.”