Best Practices: Paying Customs Duties Directly And Electronically

The sharp increase in freight rates and imposition of trade remedy duties over the past several years has meant additional out-of-pocket costs for shippers. Previously, TOC’s policy was based on a financial review, after which we would extend credit for things like international freight and Customs duties. However, the conditions of the day have led us to encourage our importer clients to help lessen both our financial risk and better control their cash flow by paying Customs directly.

It’s easy, and we’re happy to both explain how it happens and help get your company set up to take advantage of these programs and their benefits.

Customs regulations require that duties be deposited within ten working days from release, excluding federal holidays. Absent physically attaching a check to the entry summary, the agency allows Customs brokers to pay duties on a daily statement that resembles a credit card statement. Importers are able to pay directly via this method, too, but we can also recommend one that is even better for cash flow.

The agency offers a program called Periodic Monthly Statement, or PMS. Periodic Monthly Statement really does operate like a credit card, where a month’s worth of entries are paid in the following business month. This means that entries that are released can have as much as 45 days of float if they occur early in the month because they can be paid as late as the 15th working day of the following month.

The Periodic Monthly Statement program is open to all importers. If your company already has an ACH account where we have been paying duty directly, we are able to work with you and CBP to set you up for this even better program. 

The advantages of utilizing PMS are amplified when clearance activities are centralized with a single customs broker. TOC can better help importers manage their duty settlement process and offer greater levels of entry compliance across HTS numbers, trade remedy programs, and management of bilateral or regional free trade agreements like USMCA, where valuation is more complex based on eligible and non-eligible inputs.

For more information, read this document on CBP’s website about PMS and ask your TOC account representative to help get your company set up to pay Customs directly.