Buried inside the Consolidated Appropriations Act, 2021, which the President signed into law on December 27, 2020, is a critical provision that will help keep US trade flowing during the COVID-19 pandemic. Specifically, the bankruptcy relief section temporarily amends the US Bankruptcy Code to provide relief to customs brokers, a group that has been adversely impacted by the economic downturn due to disruptions in international trade and the resulting wave of bankruptcies that has put many of their importer-clients out of business.
Customs brokers perform a vital function in the process of importing goods into the United States that benefits importers and the US government. By industry practice, customs brokers often advance payment of estimated duties, taxes, and fees on behalf of their importing clients or otherwise guarantee payment to the US Government through their automated clearing house accounts. This practice – which is essentially a public service – facilitates the smooth execution of the steps necessary to import goods into the United States, and the prompt payment of large amounts of duties, taxes, and fees to the federal government every month. To an extent, it also confers liquidity to importers.
Continue Reading Coronavirus Relief Package Provides Bankruptcy Protection to US Customs Brokers to Help Keep Trade Flowing