• To : Automated Broker Interface
Subject: FACT SHEET 19
TO : ALL ABI BROKERS.                                                     

FROM : LISA CROSBY                                                        

SUBJECT : NAF-FACT SHEET 19                                               

DATE : 01/13/94                                                           

                                  4012071                                 
                             JANUARY 12, 1994                             

CATEGORY:  NAF                                        CO:TO:T:T  LAC      

TO     :  REGIONAL DIRECTORS FOR COMMERCIAL OPERATIONS, DISTRICT          
          AND PORT DIRECTORS                                              

FROM   :  ACTING DIRECTOR, OFFICE OF TRADE OPERATIONS                     

SUBJECT:  FACT SHEET 19:  THE MERCHANDISE PROCESSING FEE                  

BACKGROUND:                                                               

     THE CONSOLIDATED OMNIBUS RECONCILIATION ACT (COBRA) OF 1985          
AUTHORIZED THE CUSTOMS SERVICE TO COLLECT USER FEES FOR CERTAIN           
SERVICES.  INCLUDED IN THOSE FEES WAS THE MERCHANDISE PROCESSING          
FEE (MPF).  THE FEE IS FOR THE PROCESSING OF COMMERCIAL AND NON-          
COMMERCIAL MERCHANDISE ENTERED, RELEASED, OR WITHDRAWN FROM A             
WAREHOUSE, FOR CONSUMPTION IN THE UNITED STATES.  PRIOR TO                
OCTOBER 1, 1992, THE AD VALOREM RATE WAS .17 PERCENT.  EFFECTIVE          
OCTOBER 1, 1992, THE MPF WAS RAISED TO .19 PERCENT, AD VALOREM.           
THERE IS A MINIMUM OF $21 AND A MAXIMUM OF $400 PER ENTRY.  THERE         
ARE ALSO FEE SCHEDULES FOR INFORMAL ENTRIES AND MANUALLY PREPARED         
ENTRIES.                                                                  

     AS A RESULT OF THE NORTH AMERICAN FREE TRADE AGREEMENT               
(NAFTA), THERE HAVE BEEN CERTAIN CHANGES IN THE MPF, AS INDICATED         
BELOW.                                                                    

ACTION:                                                                   

     THE FOLLOWING CHANGES ARE EFFECTIVE AS TO MERCHANDISE                
ENTERED ON OR AFTER JANUARY 1, 1994:                                      

1.   ORIGINATING GOODS IMPORTED FROM CANADA THAT QUALIFY UNDER            
     NAFTA TO BE MARKED AS GOODS OF CANADA ARE NOT SUBJECT TO THE         
     MPF.  THIS APPLIES TO ALL MPF FEES:  FORMAL, INFORMAL,               
     MANUALLY PREPARED OR AUTOMATED.                                      

2.   THE FORMULA PREVIOUSLY USED TO PRORATE MIXED CANADIAN AND            
     NON-CANADIAN GOODS IS DISCONTINUED.  ORIGINATING CANADIAN            
     GOODS ARE NOT SUBJECT TO ANY MPF; ALL OTHER GOODS ARE                
     SUBJECT TO THE FULL MPF (UNLESS ANOTHER EXEMPTION APPLIES).          

3.   THERE IS NO IMMEDIATE CHANGE TO THE MPF ASSESSED ON                  
     ORIGINATING MEXICAN GOODS.  HOWEVER, EFFECTIVE JUNE 30,              
     1999, THE MPF WILL BE ELIMINATED FOR ORIGINATING MEXICAN             
     GOODS WHICH QUALIFY TO BE MARKED AS GOODS OF MEXICO UNDER            
     NAFTA.                                                               
                                     -2-                                  

4.   GOODS CLASSIFIABLE UNDER CHAPTER 98 OF THE HARMONIZED TARIFF         
     (HTS) ARE EXEMPT FROM THE MPF, EXCEPT FOR GOODS ENTERED              
     UNDER 9802.00.60 AND 9802.00.80.  IN THESE CASES, THE MPF IS         
     ASSESSED ONLY ON THE FOREIGN, DUTIABLE VALUE OF THE                  
     MERCHANDISE, EVEN IF THE DUTY RATE IS "FREE."  MERCHANDISE           
     CLASSIFIABLE UNDER 9802.00.90 IS NOT SUBJECT TO MPF.                 

     QUESTIONS REGARDING THIS MESSAGE MAY BE DIRECTED TO THE              
NAFTA HELP DESK AT (202)927-0066.                                         




                              JANET L. LABUDA