Industry and U.S. Customs officials are working on a plan for a flat Merchandise Processing Fee that they say could make life much simpler for importers.
The idea hasn't drawn as much attention as a proposal to drastically revise import entry processes, which government and industry officials will be discussing in Washington this week.But advocates say that although the two proposals are being discussed separately, they could eventually become mutually supporting pillars of a grand scheme to slash red tape from the importation process.
Having a flat Merchandise Processing Fee would avoid ''an enormous cost to the government and the private sector,'' said James Clawson, secretariat of the Joint Industry Group, a coalition of 140 businesses, lawyers and consultants promoting international trade.
Clawson is a member of an industry working group developing the proposal.
The Merchandise Processing Fee is a ''user fee'' imposed on importers in 1986. Ostensibly, it funds customs' commercial operations and benefits importers, though importers complain that the money isn't spent on anything helpful to them.
The fee is 21 cents per $100 worth of merchandise, subject to a minimum and maximum of $25 and $485 per entry, or shipment.
Importers have fought to eliminate the fee, but some say they would accept it if it were spent on commercial operations such as the Automated Commercial Environment - the computer system planned as the replacement for Customs' current outdated system for processing imports.
The flat fee would be designed to collect the same amount of fees as the current fee. But the money would be earmarked for Customs, including ACE.
The plan under discussion also would set the fee at different levels for different sizes of shipments.
The number of different levels has not been decided. This is a key point to work out, because it affects whether the fee will be fair to small and medium-sized importers, Clawson said.
The flat fee would be easier to administer than the current one, and would remove part of the reason Customs has to closely scrutinize and double-check importers' appraisals of imported merchandise, Clawson explained. Importers dislike the scrutiny because it forces them to keep much more paperwork.
Customs will still have to check merchandise values, which are used to determine customs duties. But with duty amounts dropping under the Uruguay Round free trade agreements, this incentive will also become less important, Clawson said.
Besides reducing paperwork and cutting costs for companies, the flat fee would dovetail with Customs' proposal to allow importers to file documentation and pay duties periodically instead of for each shipment.
That plan, the Entry Revision Proposal, is being discussed in Washington in a series of meetings this week between industry and government officials.
Customs officials say they also have no objection to the flat Merchandise Processing Fee. ''From a Customs perspective, we're not arguing for any one approach'' toward the fee, said John Durant, director of the commercial rulings division at Customs.
He said Customs is telling business: ''This is a mutual problem. We'll be glad to help you understand it. We can pretty much accommodate'' the trade's desires.
One concern, he added, is to make sure the flat fee is fair to shippers of different sizes and industries.
''We want to do this jointly with the administration,'' Clawson said. ''It has to be relatively noncontroversial and well thought out.''
If not, he said, the proposal will founder immediately in Congress because of the inherently controversial nature of any fee or tax.
Clawson added that he hopes a flat-rate Merchandise Processing Fee can be put into effect next year, well before the expiration of the current fee in 2003.