So you have just cleared your first shipment into the US, and the prospects for increasing exports are high; your business plan is coming together! However, upon receipt of your first invoice from your US customs broker, you notice an additional charge that does not equal the original expenses you had expected. When you inquire, the US custom broker explains that every shipment into the US is subject to a Merchandise Processing Fee (MPF). In this blog, we will explain what MPF is, when it is applicable, and how it is calculated.
The Merchandise Processing Fee (MPF) is a user fee that the US Customs and Border Protection (CBP) charges. It is charged in addition to US Customs duty as an ad valorem tax at a rate of .03464%. It is calculated as a percentage of the value of the shipments shown on the invoice, also known as the Customs appraisement. This user fee carries a minimum and maximum amount depending on the entered value of the shipment.
MPF is required on informal (goods valued $2,500.00 USD or less) and formal (goods valued over $2,500.00 USD) entries into the US.
At the time of this writing, the current minimums and maximum rates for formal and informal entries are:
Rate: $2.53 USD
Minimum: $31.67 USD
Maximum: $614.35 USD
For a shipment valued at $7,200.00, the MPF fee of 0.3464% calculates out to be $24.98. In this case, you need to take into consideration that the minimum amount of MPF charged will be what is collected by CBP.
For a shipment valued at $180,000.00, the MPF fee of 0.3464% calculates out to be $623.52. In this case, you need to take into consideration that the maximum amount of MPF charged will be what is collected by CBP.
Minimum: $31.67 USD
Maximum: $614.35 USD
