U.S. Customs Service:

Update on the Merchandise Processing Fee

GGD-00-21R: Published: Oct 7, 1999. Publicly Released: Oct 18, 1999.

Additional Materials:


Laurie E. Ekstrand
(202) 512-2758


Office of Public Affairs
(202) 512-4800

Pursuant to a congressional request, GAO provided information on Custom Service's Merchandise Processing Fee (MPF) that is charged on certain imports, focusing on the relationship between the fee and the cost of services provided.

GAO noted that: (1) according to Customs, for each fiscal year, Congress appropriates funds to Customs for its commercial operations and drug and other law enforcement activities through a single appropriation entitled Salaries and Expenses; (2) MPF revenue collected throughout the fiscal year is deposited in the Customs User Fee Account; (3) Congress appropriates funds out of the User Fee Account to Customs as part of its Salaries and Expenses appropriation; (4) Customs commercial operations include activities that support: (a) the assessment and collection of duties, taxes, and fees on imported merchandise; (b) collection and reporting of import statistics; and (c) enforcement of laws of other federal agencies and international agreements; (5) the MPF fee structure is set by Congress and is assessed on the declared invoiced value of formal merchandise entries; (6) it was initially set in 1986 at a rate of 0.22 percent of the invoiced value, decreased legislatively to 0.17 percent in 1987, and remained at 0.17 percent until increased to 0.21 percent in 1995; (7) in November 1987, a General Agreement on Tariffs and Trade (GATT) panel ruled that the MPF exceeded the cost of services rendered and essentially discriminated against imports to the United States in favor of domestic products; (8) in response to the GATT panel's decision, Congress passed the Customs and Trade Act of 1990 that added a new minimum and maximum fee schedule of $21 (for entries under $11,053) and $400 (for entries over $210,526), respectively; (9) the Omnibus Budget Reconciliation Act of 1990 further amended the MPF by giving the Secretary of the Treasury the authority to adjust the ad valorem rate within a range of 0.15 percent and 0.19 percent; (10) the Uruguay Round Agreements Act of 1994 subsequently raised the MPF to 0.21 percent in 1995 and authorized the Secretary of the Treasury to adjust the ad valorem rate within a range of 0.15 percent and 0.21 percent; (11) it also increased the maximum fee authorized by the Customs and Trade Act of 1990 to $485 (for entries over $230,952); the minimum fee was increased to $25 (for entries valued under $11,904); (12) the MPF rate is 0.21 percent of the total declared value of imported merchandise for entries with a value between $11,904 and $230,952; (13) Customs has employed a Cost Management Information System (CMIS) since fiscal year 1997 to produce data on its costs of operations; and (14) CMIS is an activity-based cost accounting system that uses financial, workload, and reporting data maintained by Customs.

Sep 10, 2020

Sep 8, 2020

Aug 13, 2020

Jul 29, 2020

Jul 8, 2020

Jun 22, 2020

May 26, 2020

May 12, 2020

May 6, 2020

Mar 27, 2020

Looking for more? Browse all our products here