USPS Requires Merchants to Pay Foreign Customs Fees

As of October 19, American businesses that ship internationally will be held accountable for unpaid foreign customs charges by the U.S. Postal Service. This new policy places the onus on merchants to settle duties, taxes, and import fees. When a foreign customs agency, postal operator, or broker imposes a charge that remains unpaid, the Postal Service will issue an invoice to the merchant. The change affects a range of fees, but its applicability depends on the destination country’s regulations and the shipping method used, meaning not all international packages will incur these charges.

Merchant Liability for Customs Charges

Under the new rule, merchants are required to pay the invoice, even if they dispute the accuracy of the customs assessment. The U.S. Postal Service does not verify the correctness of foreign authorities’ calculations, so merchants must resolve any disputes directly with the entity that imposed the charge. Furthermore, merchants remain liable for applicable charges regardless of the parcel’s status, whether it is delivered, lost, damaged, or returned.

If a merchant fails to pay the invoice on time, interest accrues at an annual rate of 6%. In cases where a customer refuses a package and the merchant refunds the order, the merchant may still be liable for the unpaid customs charge. A merchant must pursue the matter with the entity that assessed it.

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International businesses have traditionally managed duties and taxes, informing customers about these charges. However, the U.S. Postal Service‘s rule introduces an additional consideration for merchants, as they must now factor these charges into the sale rather than passing them on to the customer. This could be particularly challenging for merchants selling low-margin products internationally, as they may need to account for unpaid shipping costs. The change could also affect how merchants use shipping software systems, calculate landed costs, establish country-specific shipping policies, and account for international returns.

European Duties to Increase

The introduction of this rule is linked to the expiration of the European Commission’s de minimis exemption in July 2026, resulting in the application of fees to low-cost merchandise that was previously exempt. All carriers, including UPS and FedEx, are required to ensure these charges are paid, meaning that switching carriers will not eliminate the risk. Currently, the European Union has implemented a temporary, non-refundable flat duty of €3.00 for each unique Harmonized System Code (HS Code) product type. For example, a parcel containing three items with the same HS classification will incur a total duty of €3.00, while a parcel with products in two HS classifications will incur a duty of €6.00.

According to the European Union, this temporary duty will remain in effect until June 30, 2028, when permanent procedures will be established. One way for merchants to mitigate uncertainty is to use the Postal Service’s Delivered Duty Paid service for eligible international shipments. With this service, merchants can obtain a quote and prepay applicable duties, taxes, and fees when purchasing postage. The service is available for shipments to 18 countries, including Canada and the United Kingdom. Although the U.S. Postal Service does not charge for this service, its third-party provider, Zonos, includes a fee in the quote. The DDP quote is not an absolute ceiling, but it can reduce unexpected charges.