Reminder: New Dairy Product Import Fee is Effective Aug 1
U.S. Customs and Border Protection is implementing the Dairy Promotion and Research Order’s assessment (tax or fee) on imported dairy products, effective August 1, 2011, by duty/fee computation date1.
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(The Agricultural Marketing Service issued a final rule in March 2011 that amended the Dairy Promotion and Research Order to implement an assessment (tax or fee) on imported dairy products and to add importer representation to the National Dairy Promotion and Research Board. Except for the implementation of the assessment on imported dairy products, the final rule’s amendments were effective April 1, 2011.)
The following are highlights of the AMS' final rule and U.S. Customs and Border Protection’s CSMS messages on the new fee:
Dairy Product Fee Based on Cow’s Milk Solids Content
According to the AMS final rule, importers will pay the dairy product fee based on the cow’s milk solids content of the subject dairy-related products (listed by HTS number in the final rule).
If the cows milk solids content cannot be determined from a commercial invoice, packing list, bill of lading, etc., CBP states that the filer should contact the manufacturer for this information.
“CKG” Unit of Measure Should Be Used for HTS Numbers Subject to Fee
A “ckg” unit of measure (content in kilograms) for all but seven of the HTS numbers subject to the dairy product import fee is in the Harmonized Tariff Schedule (the remaing seven are only in CBP's tariff database)2. The “ckg” refers to the weight in kilograms of cow’s milk solids content, including butterfat and nonfat milk solids.
The actual quantity of cow’s milk solids in kilograms is to be reported, not a percentage. (Cows milk solids of U.S. origin are to be excluded in the reporting.)
CBP sources stated by phone that the addition of the “ckg” unit of measure will allow validation of the information submitted, which will likely reduce the number of calculation errors.
Multiply “CKG” Quantity X Factor to Arrive at Amount of Fee Due
According to CBP, the dairy product fee will be equal to $0.01327 multiplied by the reported amount indicated in the “ckg” unit of measure field, for affected tariff numbers.
(This rate is based on the Food, Conservation, and Energy Act of 2008 (2008 Farm Bill) requirement to assess 7.5 cents per hundredweight of U.S. milk or equivalent thereof3.)
Dairy Product Import Fee Due at Entry Summary & May be Verified
AMS states that the assessments are to be paid at time of entry summary. Collected fees will be transferred by CBP to the Dairy Board, which will, at its discretion, verify the information reported by importers to CBP to determine if additional money is due to the Dairy Board, or if an amount is due to an importer based on the quantity of imported and the milk solids content per unit.
1According to CSMS #11-000081, the dairy fee is effective on August 1, 2011 by duty/fee computation date. Details can be found in CATAIR EI (Entry Summary) Record Identifier 10 (Input, Note 3), 20 (Input, Note 2), and 30 (Input, Note 6).
2For seven HTS numbers that already had two units of measure, CBP added a third "ckg" unit of measure only to the CBP tariff database in 2011.
3Domestic producers are already assessed 15 cents per hundredweight for all milk produced and marketed, except for those in Alaska, Hawaii, the District of Columbia, and the Commonwealth of Puerto Rico, which will become subject to the assessment as of this final rule.
(See ITT’s Online Archives or 01/12/10 news, 10011240, for BP summary of CBP’s CSMS #10-000004 in which CBP announced that dairy-related tariff numbers, which were subject to the reporting of cow’s milk solids content, have a second reporting unit of measure of “ckg.”
See ITT's Online Archives or 03/18/11 news, 110318150, for BP summary of the details of the USDA final rule.
See ITT’s Online Archives or 04/20/11, 11042021, for BP summary of CBP’s CSMS message #11-000081 on the new dairy fee system requirements in which CBP identified seven HTS numbers that would not have “ckg” as a unit of measure, as they already had two units of measure.
See ITT’s Online Archives or 06/30/11 news, 11063016, for BP summary of CBP’s CSMS #11-000128 in which CBP announced that it was adding a third unit of measure, “ckg,” for the seven HTS numbers.)