Harbor Maintenance Fee Merchandise Processing Fee: Common Entry Errors

Key Points

• Both the Harbor Maintenance Fee and the Merchandise Processing Fee are authorized under 19 U.S.C. 58c, and errors on either fee are among the most common findings in CBP compliance audits.
• The MPF is calculated at 0.3464% of the entered value of formal entries, subject to a per-entry minimum and a per-entry cap; applying the wrong rate or ignoring the cap and minimum are the two most frequent calculation mistakes.
• The HMF is calculated at 0.125% of the value of commercial cargo loaded at a U.S. port; it applies to vessel entries only and is owed at the time of the entry summary.
• Several entry types are fully exempt from MPF, including USMCA-qualifying goods and goods entered under certain preference programs; incorrectly paying or waiving the fee on these entries creates both overpayments and underpayments.
• Overpaid HMF and MPF can be recovered through a protest filed with CBP, but the deadline for protest is generally 180 days from the date of liquidation.

On this page

1. What the harbor maintenance fee and merchandise processing fee are
2. How each fee is calculated
3. Entries that are exempt from MPF and HMF
4. The most common errors importers make on entry summaries
5. How errors are discovered and corrected
6. What importers should do
7. Key references

The harbor maintenance fee and the merchandise processing fee are two user fees collected by CBP on most commercial imports. Both are calculated as a percentage of cargo value, but they have different bases, different exemptions, and different caps. Importers most often go wrong by misapplying the MPF cap and minimum, omitting the HMF on vessel entries, or claiming a fee exemption without adequate proof of qualification.

The links in this article go to the primary documents: the statutes, regulations, and official CBP pages themselves. Read the source.

What the harbor maintenance fee and merchandise processing fee are

Both fees are grounded in 19 U.S.C. 58c, which authorizes CBP to collect user fees for customs services and for the use of federally maintained harbors. Neither fee is a duty. They appear as separate line items on the CBP Form 7501 entry summary and are deposited into dedicated trust funds: the Harbor Maintenance Trust Fund for the HMF, and the Customs User Fee Account for the MPF.

Harbor Maintenance Fee

The HMF exists to fund the Army Corps of Engineers' dredging and maintenance of U.S. commercial ports. It applies to commercial cargo arriving by vessel at a U.S. port of entry. The fee is based on the value of the cargo, not on the dutiable value, weight, or quantity.

Merchandise Processing Fee

The MPF funds CBP's cost of processing import entries. It applies to formal entries (entries covering merchandise valued above the informal-entry threshold) and to certain informal entries that are specifically assessed the fee. Informal entries below the de minimis threshold are generally not subject to MPF.

How each fee is calculated

MPF rate, cap, and minimum

For formal entries, the MPF is assessed at 0.3464% of the entered value of the merchandise. Two hard limits apply on a per-entry basis:

• Minimum: A per-entry floor applies regardless of how low the entered value is.
• Cap: A per-entry ceiling applies regardless of how high the entered value is.

CBP periodically adjusts the specific dollar amounts of the minimum and cap by regulation. Always verify the current figures in 19 C.F.R. Part 24 or in the most recent CBP guidance at cbp.gov before filing. Using a stale rate table is one of the most preventable audit findings.

For informal entries that are subject to MPF, a flat fee applies instead of the percentage calculation. Again, confirm the current flat-fee amounts in 19 C.F.R. Part 24.

HMF rate

The HMF is assessed at 0.125% of the value of the commercial cargo. "Value" for HMF purposes is defined in the statute and generally mirrors the customs value of the shipment. Unlike the MPF, the HMF has no statutory cap or minimum, so the fee scales linearly with the value of the cargo no matter how large or small the shipment is.

The "per entry" rule for MPF

The cap and minimum are applied on a per-entry basis, not per shipment or per line item. A single formal entry covering multiple purchase orders or multiple invoices is one entry for cap and minimum purposes. Breaking a single commercial transaction across multiple entries to stay under the minimum, or consolidating entries incorrectly, can result in fee manipulation findings during an audit.

Entries that are exempt from MPF and HMF

MPF exemptions

The following categories are among the most significant MPF exemptions. An importer claiming an exemption must be able to demonstrate qualification at the time of entry.

• USMCA-qualifying goods: Goods that qualify for preferential treatment under the United States-Mexico-Canada Agreement are exempt from MPF. Qualification requires a valid certification of origin or equivalent documentation. For a detailed look at the underlying rules-of-origin requirements, see our USMCA Rules of Origin Tariff Shift RVC: Audit Guide.
• Goods entered under certain other free trade agreements: Several U.S. FTAs provide MPF exemptions for qualifying goods. Eligibility depends on the specific agreement and whether the goods meet the applicable rules of origin.
• Goods entered under the Generalized System of Preferences (GSP), AGOA, and certain other preference programs: When the underlying preference program provides an MPF exemption, importers must correctly claim both the duty preference and the fee exemption on the entry summary.
• Informal entries below the de minimis threshold: These entries generally do not incur MPF, though the informal-entry flat fee may apply to entries above de minimis but below the formal-entry threshold.
• U.S. government and certain non-commercial importations.

HMF exemptions

The HMF applies only to vessel entries. Cargo arriving by air, truck, or rail does not trigger the HMF. Within vessel entries, certain categories are exempt, including:

• Cargo destined for non-contiguous U.S. territories and insular possessions in specific circumstances defined by statute.
• Certain non-commercial shipments.
• Shipments entered as household goods or personal effects.

A common broker error is assessing HMF on air freight entries. Conversely, failing to assess HMF on a vessel entry because the broker's system defaulted to an air-entry template is equally common.

The most common errors importers make on entry summaries

1. Ignoring the MPF cap on large entries

On high-value formal entries, the MPF calculation often hits the per-entry cap before the percentage math is applied. Importers who simply run 0.3464% of the entered value without checking against the cap systematically overpay. This error is not corrected at liquidation unless a post-entry amendment or protest is filed.

2. Ignoring the MPF minimum on small entries

On low-value formal entries, the percentage calculation may produce a figure below the minimum. Paying less than the minimum exposes the importer to a CBP demand for the unpaid balance, plus potential interest.

3. Claiming MPF exemptions without documentation

Importers who claim an FTA-based MPF exemption without a valid, contemporaneous certification of origin are claiming a fee waiver they cannot support. CBP auditors look specifically for situations where the duty was paid at the MFN rate (suggesting the importer knew the goods did not qualify for FTA treatment) but MPF was waived, or vice versa.

4. Assessing HMF on non-vessel entries

This is a pure system-configuration error. If a broker's entry-preparation software defaults to assessing HMF on all entries regardless of mode of transport, the importer overpays on every air and truck shipment. Multiply that by volume and the aggregate overpayment can be significant.

5. Omitting HMF on vessel entries

The inverse error is also common: a vessel entry is processed through a software template configured for land-border entries, and the HMF field is left blank. The fee is technically owed at the time of entry summary, and CBP can issue a bill with interest after liquidation.

6. Applying the wrong entered value

Both the MPF and HMF are calculated on value, but the value base is not always obvious when the invoice includes charges such as commissions, assists, or royalties that must be added to the transaction value under the customs valuation rules. An undervalued entry results in underpaid fees in addition to underassessed duties. This is the same valuation discipline that duty-variance analysis is designed to catch before CBP does.

7. Treating each invoice line as a separate entry for MPF cap purposes

Some importer accounting systems track MPF costs at the line-item level and apply the cap per line. This produces an incorrect result. The cap is per entry, full stop. Internally allocated MPF costs should be reconciled to the actual per-entry fee paid on the 7501.

How errors are discovered and corrected

CBP audit and focused assessment findings

HMF and MPF errors surface routinely during CBP Focused Assessments and other compliance reviews. Auditors typically pull a sample of entry summaries and verify that the fee amounts are mathematically consistent with the entered values and that claimed exemptions are supported by documentation in the importer's files.

Post-entry amendment

An importer who discovers an error before CBP liquidates the entry can file a post-entry amendment to correct the fee. After liquidation, the vehicle is a protest.

Protest for overpayments

Overpaid MPF and HMF are recoverable. CBP accepts protests for fee overpayments, and the deadline is generally 180 days from the date of liquidation. Document the error, calculate the overpayment across the affected entries, and file a single protest covering the relevant liquidations where CBP procedure permits. Waiting too long forfeits the recovery.

Voluntary prior disclosure for underpayments

If an internal review reveals systematic underpayment, a voluntary prior disclosure to CBP before the agency discovers the error on its own can reduce or eliminate penalty exposure. The calculation and documentation requirements for a valid disclosure are governed by 19 C.F.R. Part 162.

What importers should do

• Audit your MPF calculations annually. Pull a cross-section of entry summaries, recalculate the MPF independently using the current rate, cap, and minimum from 19 C.F.R. Part 24, and compare to what was paid. Flag any entry where a claimed exemption does not have a corresponding origin certification in the file.
• Verify mode of transport in your entry software. Confirm that HMF is assessed only on vessel entries. Run a spot check of air and truck entries to verify the HMF field is zero, and check vessel entries to confirm it is populated and calculated correctly.
• Tie MPF to the correct entered value. Make sure the entered value used for MPF calculation matches the declared customs value on the 7501, including any additions required by the customs valuation rules, not just the invoice price.
• File protests promptly. If you identify overpayments after liquidation, calendar the 180-day protest deadline from the liquidation date immediately. Recoveries are real money; forfeiture is avoidable.

Key references

• 19 U.S.C. 58c - The statute authorizing the Harbor Maintenance Fee and Merchandise Processing Fee
• 19 C.F.R. Part 24 - CBP regulations governing user fees, including current MPF rate, cap, minimum, and flat-fee amounts
• 19 C.F.R. Part 162 - CBP regulations on recordkeeping, audit, and prior disclosure procedures
• CBP.gov - U.S. Customs and Border Protection official guidance, CSMS messages, and fee update announcements
• hts.usitc.gov - Harmonized Tariff Schedule of the United States, including Chapter 99 special program provisions relevant to MPF exemptions