Merchandise Processing Fee (MPF)
The Merchandise Processing Fee (MPF) is a CBP user fee assessed on most formal imports into the United States. Calculated at 0.3464% of the customs value of the entry — subject to a minimum per-entry amount and a maximum per-entry cap — the MPF is separate from import duty and applies regardless of the applicable duty rate or whether any duty is owed.
In Detail
The MPF was established under 19 USC §58c to fund CBP's customs processing activities. The current rate is 0.3464% of the total customs value of a formal entry, with a minimum of $31.67 and a maximum of $614.35 per entry (amounts as periodically adjusted by CBP). The MPF is assessed on the total customs value of the entire entry — not on each individual line item — meaning an entry covering ten different product categories pays a single MPF, capped at $614.35 regardless of total customs value once the value exceeds approximately $177,000.
Several significant exemptions reduce or eliminate MPF liability. Goods qualifying for duty-free treatment under a free trade agreement generally receive MPF exemption as well — USMCA eliminates the MPF for qualifying Canadian- and Mexican-origin goods, and most other U.S. FTAs include similar MPF exemptions for qualifying goods. Goods entered under the Section 321 de minimis exemption (informal entries under $800) are exempt. Goods entered under certain government or diplomatic programs may also be exempt.
For high-volume importers making many separate formal entries, the MPF accumulates quickly. At the $614.35 maximum cap, 1,000 formal entries per year generates up to $614,350 in MPF charges annually. Entry consolidation — combining multiple shipments into fewer formal entries — is a common strategy to reduce MPF exposure. Conversely, failing to claim applicable FTA MPF exemptions when eligible means unnecessary fee payments on every qualifying entry.
Classification Significance
The MPF itself is not driven by the HTS code — it applies to the entry as a whole based on customs value. However, the MPF exemptions available under FTAs are tied to the origin determination and HTS classification of the goods. An incorrect HTS classification that misses FTA eligibility costs the importer both the preferential duty rate and the MPF exemption on the same entry. Correct HTS classification is the prerequisite for claiming all available duty and fee relief.
How Kanon Handles This
Kanon's Classification Support Package identifies applicable FTA preferential treatment eligibility for the classified HTS code and declared country of origin. When FTA eligibility exists, the package documents it — enabling the importer to claim the preferential duty rate and the associated MPF exemption, reducing total landing cost on every qualifying entry.