FTZs Would Still Be Disadvantaged Under Proposed de Minimis Changes, NAFTZ Says

Foreign-trade zones would continue to lose out to foreign distribution companies under the changes to de minimis proposed in The Import Security and Fairness Act, the National Association of Foreign-Trade Zones said in a recent letter to House Ways and Means Trade Subcommittee Chairman Rep. Earl Blumenauer, D-Ore., who introduced the bill (see 2201180053). A version of that bill, which would no longer end de minimis treatment for goods subject to Section 232 tariffs, among other changes, was included in the America Competes Act (see 2201260029). While NAFTZ sent its letter before the bill was attached to America Competes, "we don’t support either version because neither allows U.S. companies operating in a U.S. FTZ the same ability to leverage Section 321 de minimus as their foreign competitors can and will still be able to do with the current language of the bill," emailed Melissa Irmen, NAFTZ's chair.

The legislative changes to de minimis should include "a technical revision to 19 U.S. Code § 1321(a)(2)(C) to provide de minimis eligibility for products shipped from a U.S.-based FTZ and require CBP to work with relevant stakeholders to develop and implement a process to promote de minimis entry eligibility for trusted importers," the trade group said in its letter. That change would "directly prevent further offshoring of this rapidly growing supply chain by onshoring the source of these e-commerce, de minimis-eligible transactions into U.S. FTZs" and give the government more visibility into those transactions since the FTZs are on U.S. soil, the group said. CBP doesn't allow for de minimis treatment for bulk shipments sent to FTZs that are broken up for individual consumption entries below the $800 de minimis level prior to a consumer order (see 1807180022).