A few weeks back, we launched a survey on the impacts of GSP renewal after 1 year. (If you haven’t answered it already, please take a moment to do so now.) While many of the questions (or variations of them) have been asked in previous surveys, there were a few new ones as well.
One of the new questions asks how long it took companies to receive all of the refunds. Shockingly, 23 percent of respondents are STILL waiting for some of their GSP refunds.
This question almost seems unnecessary given that the legislation said refunds: “shall be paid, without interest, not later than 90 days after the date of the liquidation or reliquidation (as the case may be).”
But two issues complicate this. First, the legislation did not include deadlines for making the “liquidation or reliquidation” decision. Second, refunds often are paid to third-parties handling the Customs paperwork for importers, who then have their own processes for refunding payments. GSP users must wait for both processes – and the result can be long delays for refunds.
The amount of tariffs paid does not seem to be a factor, as one of the companies still waiting on refunds paid just $3,600 in tariffs while GSP was expired. Similarly, among the companies waiting 9 to 12 months to receive all their refunds was a small business that paid about $1,000 in tariffs while GSP was expired. Conversely, a company that paid more than $1 million in tariffs during the expiration reported receiving all of its refunds within 1 to 3 months.
We think company size does matter, as nearly all of the companies in the “still waiting” category are small businesses. And this makes sense, since small businesses are more likely to use third-party Customs providers and therefore need to wait for refunds to work through two sets of processes before receiving the money.
However, we need more responses in order to make those types of robust conclusions, so please take a moment to answer the survey here if you haven’t already.
And stay tuned for a new post next week with preliminary results regarding how many of the companies’ GSP-eligible imports get incorporated into U.S. exports.