Paying U.S. Customs via ACH and Periodic Monthly Statement

Updated: Feb 18, 2020



Today I would expand a little bit about a very boring topic " Payment of duties to U.S Customs". Well, in general, I guess people think my job is really boring. Many times, when other people ask me what I do. I say I am the customs broker. They would widely open their eyes and look so confused," you are... what...? customer broker? " And then they will misunderstand my chosen career and begin to ask for investment advice or assistance with real estate. Then I say I work in the logistics industry but in office work setting. And quickly they turn the conversation to the subject of their trip to the Caribbean and how tough it was bringing that Cuban cigar back into the country. LOL




Back to today's boring ( but useful) topic ----- Payment of duties to U.S Customs. ; I will take you to tour the payment process behind the scenes


Behind the Scenes - ACH Payment


CBP Automated Clearinghouse (ACH) is an electronic payment option that allows participants to pay customs fees, duties, and taxes electronically, as well as receive refunds of customs duties, taxes, and fees electronically. When you choose to work with a customs broker, after you sign the POA, they would also ask you to fill out the ACH credit application form. That is CBP 400 Form. It allows your custom brokerage firm to pay duties and fees through their ACH account on behalf of importers. Every workday, I would go into the STATEMENT tab in the ABI interface to view and authorize payment of today's consolidated statement. These statements are provided by U.S Customs 10 working days after the entry released date. Each statement shows a list of entries grouped by the same port of entry. It includes fees and duties owned to U.S Customs. I would carefully review each statement referencing back to the entry summary if necessary, to make sure the duties and fees listed on the statement are correct as what we suppose to the bill to the importer.


One thing I would like to suggest importers who tend to always pay high duties to do is to set up ACH Payment through their own banking account.


CBP will assign a payer unit number to the importer if the importer submits CBP 400 Form. Then the importer could certainly request the custom broker to use the payer Unit number to adjust the ACH payment directly from the banking account. This way, the importer would not need to worry about the broker to keep playing “ cash upfront first then I will release your entry " game.


Behind the scenes - Periodic Monthly Statement (PMS)


A periodic monthly statement is legal means that CBP provides importers or brokers to pay duties on an interest- free monthly basis! Instead of 10 working days, now you have up to 6-week credit term, How COOL is that! What do I mean by up to 6 weeks?


For example, if Importer A uses ACH payment method, the entry release date is January 6th, the non-PMS payment date would be no later than Jan 17th, 2020, otherwise, the late payment penalty will come. Importer B signs up for the Periodic Monthly Statement program. Its entry is also released on the January 6th, the PMS preliminary statement would be Feb 18th and the final statement would be Feb 23rd, Payment would withdraw on Feb 18th. This gives importer B up to 6 weeks credit term interests free! If the broker has to update the 7501 entry summary and adjust duties and fees, with periodic statement enrollment, the broker has up to 6 weeks to update the entry summary.


The periodic statement program help streamlines the accounting and reporting process significantly. It Shifts the payment process from a transaction-by-transaction process to an interest-free periodic monthly process




P.S, informal entry cannot be paid by the periodic statement.


I know you want to ask " how to enroll periodic statement program"? This is a bit technical

If you are interested in this technical question, you can check the CBP link below. Every custom brokerage firm have the capability to do it.


https://www.cbp.gov/sites/default/files/assets/documents/2020-Jan/Trade%20-%20QRC%20-%20Participating%20in%20Periodic%20Monthly%20Statements_0_0%20%281%29.pdf


Any questions? let us chat.

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