Automation of Detecting de Minimis Overage a Nuanced, Lengthy Process
CBP officials said that just because ACE isn't able to flag when a purchaser is receiving packages from different exporters that add up to more than $800 in one day doesn't mean the $800 limit is an honor system.
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Officials, speaking on background with International Trade Today in a recent interview, said officers read manifest documents, and compare names and addresses, and if they add up to more than $800, they don't allow de minimis entry for the package that put it over the limit. But if CBP realizes the violation only after the fact, there's nothing it could do, as there is no bond for this type of import.
Even so, CBP encourages the trade industry to improve its compliance, given what it was seeing too late to be able to stop the duty-free entries. An official said that, since 2019, CBP has compiled data about where the overages were happening, and asked express carriers to go to their clients and tell them that they need to change their business practices. Through those educational efforts, CBP saw improvements, and no longer sees the same companies consistently violating the threshold.
The agency effort to automate this process (see 2409030052), and prevent packages from entering when their combined reported valuations top $800, is extremely complicated. The $800 per day is at the time of import, but the data is submitted ahead of the actual import, and different modes have different timelines for making those submissions. Also, the estimated date of arrival may not be the actual date the good enters the country. CBP is working with trade professionals to design what precise data the ACE programmers will have the system look for.
The official said that carriers already have improved the reporting on consignees, which is critical for this enforcement. A shipper could report among multiple parties as consignee -- the fulfillment center that will handle the package before sending it on to the final owner, an individual in receiving who works at a company that's buying the product, or just the owner. CBP explained that putting the deconsolidator as consignee will trigger the $800 too quickly, and that issue has abated, but companies need to be accurate with name spellings, so that automation can work.
Before packages are rejected, CBP will have a period of informed compliance with warning messages, beginning Jan. 11. It will say that, based on the estimated date of arrival, the packages' recipients may exceed the threshold. Businesses handling those packages will then have to develop a system for responding to those warnings. What if a company is sending a truck full of packages from a Canadian warehouse, and it's learning that one of the 1,000 packages doesn't belong in the de minimis stream? Giving companies time to figure out how to deal with this type of problem should lead to fewer instances of packages being rejected, and the impact to commerce should be more modest, the CBP official said.