Merchandise Processing Fee (MPF): A Complete Guide

When navigating the complexities of international trade, understanding various fees and regulations is crucial for smooth and compliant operations. One such fee that every importer to the United States should be familiar with is the Merchandise Processing Fee (MPF). 

This fee, imposed by U.S. Customs and Border Protection (CBP), applies to most goods entering the country and is essential for maintaining the efficiency of import processes.

In this blog, we’ll delve into the details of the MPF—what it is, how it’s calculated, and why it’s important for anyone involved in exporting goods to the USA.

Artemus offers comprehensive software solutions that streamline the ISF filings &  AMS filing processes, automating critical filing processes to ensure accuracy & compliance with CBP regulations.

What Is A Merchandise Processing Fee (MPF)?

The Merchandise Processing Fee (MPF) is a charge levied by the U.S. Customs and Border Protection (CBP) on most imports into the United States. It is designed to offset the costs associated with processing goods entering the country and maintaining U.S. customs operations. 

Whether you’re a seasoned importer or new to international trade, understanding the MPF is essential for ensuring compliance and managing costs effectively.

Related: What Is Harbor Maintenance Fee (HMF)? A 2024 Guide

How Is The Merchandise Processing Fee Charged?

The Merchandise Processing Fee (MPF) is a charge levied by the U.S. Customs and Border Protection (CBP) on most imports into the United States. Understanding how it’s charged is crucial for the customs process, as it helps importers accurately estimate costs and ensure compliance with U.S. regulations.

 1. Who Must Pay The MPF?

The MPF applies to nearly all imports into the U.S., with a few exceptions, such as certain free trade agreements or specific duty-free goods. Importers, whether they are individuals or businesses, are responsible for paying the MPF on applicable shipments.

The fee is assessed at the time of entry and is typically paid as part of the customs clearance process.

2. How Is the MPF Calculated?

The MPF is calculated based on the value of the imported goods, excluding duties, taxes, and other fees. It is assessed as a percentage of the declared value of the merchandise, but with a minimum and maximum charge that importers should be aware of:

• Percentage Rate: The MPF is generally set at 0.3464% of the value of the goods being imported.
• Minimum and Maximum Fees: The MPF has a minimum fee of $31.67 and a maximum fee of $614.35. This means that even if the calculated percentage of the goods’ value is lower than $31.6, the importer must still pay the minimum fee. Conversely, even if the calculated percentage exceeds $614.35, the importer will only be required to pay the maximum fee.

3. Example Calculations

Here’s how the MPF might be charged for different import values:

• Low-Value Shipment: If the value of the imported goods is $5,000, the MPF would be calculated as 0.3464% of $5,000, which equals $17.32. Since this is below the minimum fee, the importer would pay $31.6.
• High-Value Shipment: If the value of the goods is $200,000, the MPF would be 0.3464% of $200,000, which equals $692.80. However, since this exceeds the maximum fee, the importer would only pay $614.35.

4. When Is the MPF Due?

The MPF is due at the time of entry summary, which is when the final data and payment for the shipment are submitted to CBP. This usually occurs within 10 business days of the entry date. The fee must be paid along with any applicable duties and taxes to clear the goods through customs.

5. How Is the MPF Paid?

Importers typically pay the MPF electronically through the Automated Commercial Environment (ACE) system, which is the CBP’s portal for processing imports and exports. Payments can be made directly by the importer or through a customs broker who handles the transaction on their behalf. 

The MPF is often bundled with other import duties and fees in a single payment to simplify the process.

Related: Customs Clearance Delays In 2024: Top 10 Reasons & Solutions

Merchandise Processing Fee 2024

The Merchandise Processing Fee (MPF) for 2024 is set to see some adjustments starting October 1, 2024. The MPF is a fee imposed by U.S. Customs and Border Protection (CBP) on formal entries. The ad valorem rate of 0.3464% of the value of imported goods remains unchanged, but the minimum and maximum fees have been updated.

The minimum MPF will increase from $31.67 to $32.71, and the maximum will rise from $614.35 to $634.62. These changes apply specifically to formal entries under class code 499. This fee is calculated based on the value of the merchandise being imported, excluding duties, freight, and insurance costs​.

Related: What Happens After Custom Clearance Completed? 9 Next Steps

Merchandise Processing Fee Minimum & Maximum

For 2024, the Merchandise Processing Fee (MPF) includes both a minimum and maximum fee that are set to increase starting October 1, 2024. These fees apply to formal entries processed by U.S. Customs and Border Protection (CBP).

• Minimum Fee: The minimum fee will increase from $31.67 to $32.71. This amount represents the lowest possible charge that an importer will pay, even if the calculated MPF, based on the ad valorem rate of 0.3464% of the merchandise value, falls below this threshold. In such cases, the importer is still obligated to pay the minimum fee.
• Maximum Fee: The maximum fee will rise from $614.35 to $634.62. This upper limit ensures that the MPF does not become excessively burdensome for high-value shipments. Even if the calculated fee exceeds this cap, the importer is only required to pay the maximum fee, preventing disproportionate costs on large shipments.

These adjustments are part of CBP’s regular updates to account for inflation and ensure the fees remain equitable for importers across various shipment values​.

Related: Ocean Freight Documentation For Imports: A Crucial Checklist

How Does MPF Consolidation Work?

MPF consolidation refers to the process of aggregating the Merchandise Processing Fee (MPF) from multiple shipments into a single payment. This method is typically employed by importers who handle numerous small shipments, allowing them to streamline their financial management and reduce the administrative burden associated with individual MPF payments. 

Here’s how it works:

1. Aggregation Of Shipments: Importers collect data from multiple shipments over a defined period, such as a month. Each shipment incurs an MPF based on its value, but instead of paying the fee separately for each shipment, the importer consolidates these fees.
2. Calculation of Total MPF: At the end of the aggregation period, the total MPF is calculated based on the combined value of all shipments. This calculation involves summing up the fees for each individual shipment and applying any applicable exemptions or adjustments.
3. Payment and Reporting: The consolidated MPF amount is then reported and paid as a single transaction. This simplifies the payment process and often reduces the overall administrative cost associated with handling multiple MPF payments. Importers submit a consolidated MPF payment to U.S. Customs and Border Protection (CBP) along with a detailed report that includes information about the aggregated shipments.
4. Benefits: MPF consolidation helps importers manage their cash flow more effectively, minimizes the risk of errors in individual payments, and can improve compliance by ensuring that all fees are accurately calculated and reported. It also reduces the frequency of transactions with CBP, which can streamline the overall import process.

Related: What Is Import Compliance & Why It Matters?

What Are Merchandise Processing Fee Exemptions? 

Merchandise Processing Fee (MPF) exemptions refer to specific cases where certain goods are not subject to the standard MPF that U.S. Customs and Border Protection (CBP) imposes on imported items. These exemptions are designed to reduce the financial burden on certain types of imports. Key exemptions include:

1. Free Trade Agreements: Goods imported under free trade agreements, such as those with countries like Mexico or Canada, may be exempt from MPF, provided they meet the agreement’s requirements.
2. Diplomatic Shipments: Goods imported for diplomatic purposes, including personal property and certain shipments by foreign governments or international organizations, are typically exempt from MPF.
3. Non-Commercial Shipments: Personal shipments that are not intended for resale, including gifts and personal effects, often qualify for MPF exemptions.
4. Certain Goods: Specific categories of goods, such as certain types of agricultural products and some humanitarian aid, may be exempt from MPF under particular circumstances.
5. Special Programs: Imports under specific programs, such as those benefiting from certain government or international assistance programs, may also be exempt from MPF.

Related: What Is A Certificate Of Origin? Types & Importance

Artemus: ISF & AMS Software Solution For Seamless Customs Compliance

Artemus provides cutting-edge ISF and AMS software solutions designed to simplify and streamline customs compliance for businesses engaged in international trade. 

The platform offers seamless integration and automation of Importer Security Filing (ISF) filings and Automated Manifest System (AMS) processes, ensuring that all required filings are accurate, timely, and fully compliant with U.S. Customs and Border Protection (CBP) regulations. 

By automating these critical filings, Artemus minimizes the risk of errors and reduces the likelihood of customs delays, allowing businesses to operate more efficiently and confidently. 

With real-time updates and a user-friendly interface, Artemus enhances operational efficiency, supports regulatory compliance, and helps businesses navigate the complexities of global trade with ease.

Related: What Is A Certificate Of Origin For A Vehicle? Key Details

FAQs

1. What Is The Merchandise Processing Fee?

The Merchandise Processing Fee (MPF) is a tariff imposed by U.S. Customs and Border Protection on most imported goods, calculated as a percentage of the value of the merchandise, to cover the costs of processing imports.

2. How Do You Calculate Merchandise Processing Fees?

To calculate Merchandise Processing Fees (MPF), apply a percentage (typically 0.3464%) of the value of the imported goods, with a minimum and maximum fee cap set by U.S. Customs and Border Protection (CBP).

3. What Is The Min Max For Merchandise Processing Fee?

The Merchandise Processing Fee (MPF) for imports into the U.S. is 0.3464% of the declared value of the goods, with a minimum fee of $27.75 and a maximum fee of $538.40 per entry.

4. What Is HMF And MPF?

HMF (Harbor Maintenance Fee) is a charge levied on importers to fund harbor maintenance, while MPF (Merchandise Processing Fee) is a fee applied to most imports to cover the costs of processing and customs services.

Conclusion

In conclusion, the Merchandise Processing Fee (MPF) is a vital component of the import process, ensuring that U.S. Customs and Border Protection can efficiently manage and process incoming goods.

Understanding how the MPF is calculated and its impact on your import costs can help businesses navigate international trade more effectively.

Related: Air Freight VS Sea Freight: What To Choose In 2024?