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CBP Expects Customs Brokers to Manage de Minimis Entries When PGAs Are Indicated

A panel of CBP officials told members of the trade community that they're still considering how to shape a rulemaking based on what they've learned from the Entry Type 86 test and the Section 321 data pilot, but they expect to require 10-digit Harmonized Tariff Schedule codes on de minimis entries that PGAs have an interest in.

Brandon Lord, acting CBP executive director for trade policy and programs, had previously told the Commercial Customs Operations Advisory Committee the same thing (see 2106240064), and that in order to avoid the need to put HTS codes on all de minimis shipments, importers will have to prove they have a system for distinguishing which goods are not of interest to the FDA, the Consumer Product Safety Commission, or other government agencies that partner with CBP.

More than 529 million shipments have been covered by one of the two pilots, Lord said. James Moore, E-commerce branch chief at CBP, shared a PowerPoint slide during the July 20 Virtual Trade Week presentation that included pieces of information CBP might require in the future on de minimis shipments, including:

  • price
  • sellers' and purchasers' names and addresses
  • what website the item was sold on
  • a link to the listing URL, or a package X-ray, or a picture
  • a product description from the listing if the URL is not provided
  • country of origin
  • PGA data set if indicated
  • HTS code if a company has not gotten permission to avoid HTS on non-PGA shipments.

Moore cautioned that this list could change before the notice of proposed rulemaking.

Lord said that CBP is not asking for an importer of record number, because it's not valuable. It's more useful to CBP to know "who sold it, who’s shipping it, who’s going to open up the box at the destination."

Amy Magnus, director of customs affairs and compliance at A.N. Deringer, who also spoke on the panel, said that the current Type 86 pilot has been more like a manifest, and she is pleased that the agency is thinking it wants more information in the future. "I was enthusiastic when I saw the new data fields that you’re proposing," she said. "Knowing who the parties to the transaction are is very important to a broker. It now looks more like an ACE release-type data package than a manifest."

Moore said the pilots have revealed to CBP that it needs to be more explicit in what it wants in a product description, which is why it either wants the URL or the product description from the website. "The URL is really a great effective tool for the officers on the ground," he said. "We’re seeing a lot of descriptions that quite frankly don’t describe what the product is. It may say 'gift,' or 'pants' or 'shirt.'" He said when you're shopping online, you wouldn't buy an item that just said "pants." "Are they jeans? Are they polyester? Are they cotton?"

Moving to a system where customs brokers handle many e-commerce shipments -- or even all from companies that don't satisfy CBP they can determine which goods are of interest to PGAs -- would be a major change, and one of the listeners asked if brokers were going to be needed every time.

Moore reminded listeners that if it's a gift between two private individuals that falls under de minimis limits, it would not apply, and that even in the commercial environment, this is only for companies that want electronic clearance of their de minimis packages.

"There is still the process of manual clearance. It will still exist. It will still be an option for people," he said.

One listener argued that returns and prototypes should fall outside this system, since there is no chance they will be used by the public, and therefore should not trigger a CPSC review, for example.

Lord suggested that the listener make this point during the public comment period, as it is an issue CBP has not considered deeply yet. "This is why we love public comment period," he said.

Magnus argued that Section 9801 already allows for duty-free clearance, and it should be used instead of Section 321, since there are a number of partner agencies that flag some 9801 goods. She said if the good should not undergo review, the broker has an option to disclaim and explain why.