The source for trade compliance news

CBP Trade Policy Director: de Minimis Is No Loophole

The CBP executive whose directorate covers trade remedies, intellectual property enforcement and e-commerce said that small-value shipments coming to the U.S. are not slipping through uninspected, just because there are no duties owed. Brandon Lord, executive director of the Trade Policy and Programs Directorate, said in an interview with International Trade Today at the CBP Trade Facilitation and Cargo Security Summit: "There's a misconception that we don't target or screen de minimis -- it's not true. People throw around the phrase 'loophole.' It's not a loophole. De minimis is not a loophole."

National Council of Textile Organizations CEO Kim Glas frequently calls de minimis a "loophole," and that has been amplified both by unions at House Ways and Means Committee hearings and by Trade Subcommittee ranking member Rep. Earl Blumenauer, D-Ore. Lord made his comments last week; the same week, Blumenauer said during a subcommitee hearing that he hopes the committee will pursue a legislative change to de minimis. Blumenauer's bill to end Chinese exporters' eligibility for de minimis (see 2201180053) passed the House as part of its Chips Act bill in the previous session, but did not make it into the version that became law.

Lord said importing under the de minimis threshold is not only a legitimate way to import goods, but that CBP screens those shipments just as they would formal entries. "It's really important that folks understand" CBP uses the same targeting logic for big and small entries, he added.

In the previous fiscal year, about half of the low-value entries came with additional data for CBP, either through the Type 86 test -- where full HTS codes are provided -- or the Section 321 data pilot. As a result, CBP "absolutely" has a better sense of what's coming in, Lord said.

Because of this data, "what we've really been able to do is better segment risk," he said. "The intent behind those pilots is not to suddenly be able to identify mass quantities of violative shipments, but instead to better identify who is complying with de minimis requirements."

More than 90% of IP seizures are from small packages, not containers. Lord said he couldn't say whether the number of seizures is growing because of better visibility, or because direct-to-consumer imports are growing rapidly, or a combination of those trends. "Too many variables," he said.

Unions and members of Congress have focused on a Bloomberg report that alleged that cotton-containing apparel from Shein has cotton grown in China's Xinjiang region, which is barred from entry because of the forced labor used to plant or harvest it. They have said this is proof that de minimis is a way for exporters to avoid scrutiny under the Uyghur Forced Labor Prevention Act.

There have been UFLPA detentions of de minimis shipments, Lord said.

The Section 321 pilot originally was only open to nine firms, and CBP recently said it was ready for more companies to participate. It had 20 companies apply to join, including brokers, carriers, third party logistics providers, and service firms who use Mexico and Canada as staging areas for de minimis shipments, and CBP is in the process of onboarding them.

Lord said that there were 2,000 participants on a recent CBP de minimis webinar, as well.

CBP has said that what it learns in both the Type 86 test and the Section 321 pilot will inform a rulemaking process for mandatory data sharing for de minimis packages in the future. When asked whether Type 86 entries will continue to exist after that rulemaking is final, Lord said: "What's important for the trade community to understand is: that benefit of electronic release, of automated clearance of that small package, that will still exist, even once we do eventually get to a final rule."