Comments on Rule to Improve Type 86 Clearances Reveal Deep Disagreements in Trade

Many shared the perspective that the postal channel should not be treated differently from other methods of importing low-value packages, and many said the rule should have a delay between announcement and effective date, plus a year of informed compliance. Many also said that URLs or pictures of products should be voluntary submissions.

The Express Association of America reflected many submitters' views on international mail when it wrote: "With all other logistics providers being required to provide additional information under the basic or enhanced entry process, the fact that postal shipments are exempt from these requirements will soon become widely known, ensuring the post will become the preferred channel for the smuggling of illicit goods."

Several stakeholders used the same language on data submissions, which will require brokers to consolidate information from sellers or platforms: "CBP should work toward developing the relevant capabilities in ACE to accept data on a single entry from different parties in the supply chain and consolidate this data into a single submission using a value like the bill of lading number. Until such capabilities exist, the NPRM provision to allow a party to transmit the information on the basis of what the party reasonably believes to be true is very important."

Some commenters also questioned how this rulemaking's proposal on exceeding the $800/day limit through multiple packages could be administered, and noted that it differs from the ACE enhancement approach. In the ACE approach, any package that remained under $800 would be accepted, and only those past the limit would be rejected. In the rule, all packages for a given day would be rejected if the threshold was exceeded.

CBP estimated that if the rule went into effect as proposed, it would cost the trade $11.4 million annually to administer, but it would maintain most of the benefits that the Type 86 pilot provided, largely through faster clearance. It estimated the benefits to be about $14 billion over 15 years, after accounting for additional costs.

The National Customs Brokers & Forwarders Association of America said it doesn't think most of the proposed regs would "achieve the level of visibility and compliance needed to address the flow of illicit goods, including fentanyl or contraband nor counterfeit or inadmissible goods threatening our national security." The group also said they don't think it's realistic for e-commerce or brokers.

They noted there would be six ways to enter a package -- basic de minimis, enhanced de minimis for PGA goods, including an HTS number, enhanced de minimis without an HTS, but with a waiver, mail, non-de minimis informal entry, and formal entry.

They said the enhanced data, as tested under the Section 321 pilot, requires more data than required for informal and formal entries, so they said it should be optional. They said the fact that the other proposed rule would carve out trade remedies from de minimis eligibility, and so did the executive order (until it was delayed) "further underscores the need for a consistent entry/release data set across all modes, requiring the same accountable, bonded parties to serve as importer of record."

They argued that bonds are needed even for duty-free packages "to address issues concerning admissibility, requests for redelivery, origin, abandonment, and destruction costs, particularly where so often shipments intended to enter as duty-free de minimis inevitably are entered as dutiable informal or formal." They praised the requirement for both "sold to" and "delivered to" data on the manifest, saying it would help screening.

However, they criticized the proposal that value would be based on the retail price in the country of shipments, saying it's not administrable -- the transaction value should be used instead.

"We find it difficult, if not impossible, to make a distinction between a bona fide gift compared to a commercial shipment," NCBFAA wrote, so they asked CBP to issue clear instructions on what is a bona fide gift.

They also asked that CBP narrow who counts as a "person" getting the benefit, and criticized CBP allowing warehouses, logistics companies, carriers and foreign vendors to claim eligibility. Only a U.S. buyer should qualify, they say. The current practice, they argue, "only creates a de minimis environment rife with compliance, national security, and safety risks."

The group said its members question the Harmonized Tariff Schedule code waiver's existence, since the characteristics CBP says would allow a company to apply are the fundamentals you need for any import compliance.

With waivers, CBP would be "somewhat subjectively" picking companies that would benefit, which could lead to lawsuits for those who were denied, NCBFAA argued. "If CBP’s regulations currently award such benefits to a particular class of service providers, then perhaps CBP should just express that it wishes to maintain that benefit for those entities and the supporting rationale."

The Express Association of America represents DHL, FedEx and UPS, who are the service providers who are able to clear low-value packages off the manifest without HTS codes, and are allowed to use their own software to segregate packages that have partner government agency (PGA) requirements. Naturally, it "strongly supports" the waiver to HTS codes. If HTS is required for all entries, it would create "enormous costs" for express carriers, the EAA said.

The group criticized Type 86, which does include HTS, as "a super-majority of de minimis filings, and according to CBP’s own data and annual compliance enforcement are statistically less compliant than those filed by all other entry types."

It said that even though the rule's "advanced entry" attempts to improve upon the Type 86 process, it argues that "CBP is attempting to preserve a flawed pilot program responsible for the significant growth in [Section] 321 de minimis imports."

With regard to pictures of products, EAA asked if the picture would be uploaded to the ACE document imaging system. It said the cost of storing the pictures for years under recordkeeping requirements would be "astronomical" for both filers and CBP, given how many terabytes of data would be involved. "CBP has made no assertions that it has the capability to use these new data elements (URLs, product pictures or X-rays etc..) in any of its automated risk assessment/screening processes," it said, so the cost is not worth it for rare manual checks.

EAA disagreed with NCBFAA that the deliver-to-party requirement would help enforcement, saying it would require two transmissions from its members, "which undermines CBP’s stated assurance that the current process for release off the manifest will be preserved."

The group asked for a 90-day period before the rule becomes effective, and at least a year of informed compliance.

The American Association of Exporters and Importers also flagged the disconnect between ACE work on enforcing the $800/day limit and the rule's approach, and asked that they be reconciled.

Both AAEI and EAA noted that the way CBP defined a shipment -- a shipment assigned to a single ultimate consignee with no lower bill unit -- would increase the number of de minimis filings. Consolidated shipments, with various consignees, should still be allowed when they are dutiable, they argued.

AAEI said express consignment operators, express carriers, customs brokers, owners and purchasers should be the only parties who can import low-value packages. "Allowing 'consignees' to have the right to make entry, respectfully, we suggest is reckless and irresponsible and will only perpetuate the problems that these regulations as well as the recently proposed executive orders and laws are designed to address," the group wrote.

The Chamber of Commerce called this proposed rule "a good attempt at a thoughtful and measured solution" to preserving the benefit of de minimis, which it said is not a loophole, and is important to business competitiveness. The Chamber's submission also addressed the separate Section 301 carve-out proposed rule, which it said was not a helpful approach.

"The administration's decision to briefly eliminate de minimis from China in February laid bare the disruptions and costs to consumers, impacts on supply chains, and need for thoughtful solutions around de minimis," the Chamber wrote.

It said if the U.S. Postal Service continued to use its current process, "that is not only less stringent than the proposed basic entry, but less stringent than current release from manifest."

The Committee to Support U.S. Trade Laws wrote that it wants HTS for every low-value package, but if the CBP is going to grant waivers, the recipients should be made public -- "as well as all those for which the privilege has been revoked. This will provide the trade community with an ability to assist CBP with identifying bad actors that are abusing the waiver through eAllegations or other means, so that CBP may quickly identify and address issues."

Goods subject to antidumping or countervailing duties are supposed to be ineligible for de minimis, but the group said its members have seen those goods enter through de minimis, "including where the valuation of the entry as under $800 is itself dubious."

The Retail Industry Leaders Coalition said its members are "increasingly concerned that certain practices from large marketplaces are undermining U.S. businesses and creating risks for American consumers." It suggested that e-commerce platforms be deemed importers. The group approved the proposal to reject all packages on a given day if the cumulative total exceeded $800, and liked the changes to language that show de minimis entry is a privilege, "and not an absolute right."

Footwear Distributors and Retailers of America wrote that its businesses rely on de minimis, but said the reforms improve accountability for importers who use it. They believe it will help CBP interdict counterfeits, particularly with the URL, product pictures, and sellers' name and contact information. They said requiring a deliver-to party will help enforce the $800/day restriction.

eBay wrote that this rule, if coupled with restrictions on eligibility under the other proposed rule or country-based restrictions, would burden consumers and micro, small and medium-sized businesses. It said 97% of eBay sellers export. However, it said it greatly appreciates this rule preserves the "basic entry" process, which it says includes "minimal disclosure requirements for importers of low-value products."

Etsy said it is fine with HTS codes for low-value imports, but said the government needs to set up a website to help, in the way the EU has the one-stop-shop for importers so that e-commerce sellers can calculate and collect the value-added tax, or VAT.

It said the rollout needs to wait for the U.S. Postal Service to be ready to collect duties if de minimis is restricted. Most sellers use the mail.

Gross merchandise sales at Etsy were almost evenly split between its 5.6 million sellers based in the U.S. and other countries, but in many cases, a UK seller is selling to another UK buyer, or a German seller is selling to another EU buyer. The company said 69% of its U.S. sellers export.

"We are aware of the significant increase in de minimis-eligible shipments entering the United States, particularly from certain Chinese-founded e-commerce platforms. This surge has understandably raised concerns around compliance and trade enforcement gaps.

"Any changes to the US de minimis process must uphold its original intent -- to facilitate low-value trade for genuine small businesses, not to serve as a loophole for mass importation of factory-made goods," Etsy wrote. The vast majority of its sellers are one-person businesses.

The Coalition to Protect America’s Small Sellers wrote that many online sellers deal in used or handmade goods, and determining country of origin for those could be difficult. It argued that low-volume sellers with fewer than 200 sales annually and less than $5,000 in revenues should be exempt.

Trying to fill in HTS codes "is generally best left to customs brokers with the requisite training and experience to provide this information to U.S. CBP, not casual sellers and their customers."

It asked for an 18-month phased implementation.

The International Mailers’ Advisory Group asked how a country of origin could be reported to CBP if a parcel contains goods from both China and Australia, for instance.

"We do not think CBP’s current technology can handle these types of situations, which will only be exacerbated should new tariffs such as reciprocal tariffs be imposed on products of all or most countries. It would simply be unworkable for all involved," the group wrote.

It said there are 75 million de minimis packages in the postal channel, and the "Postal Service’s current method for collecting duties is manual: a carrier delivers a sticker to the customer, who then goes to a post office to pay $8.85 in customs clearance and delivery fees and claim the package." It said many customers will reject the package.

It asked for at least 180 days before the rule takes effect, and a period of informed compliance after that.

The National Foreign Trade Council argued that de minimis shipments are as compliant or more compliant than other entries, and that restricting eligibility would cost CBP more than it collects. The average value per shipment dropped from $54 in 2023 to $32 in 2024, it noted. "CBP regularly cites high percentages of overall seizures occurring in the de minimis environment. These numbers, however, should be considered validation that the information available to inform CBP enforcement actions is effectively supporting interdiction," the group wrote.

NFTC liked the ability to enter goods off the manifest without an HTS code, which is possible in this proposed rule, but not if the Section 301 carve-out rule comes into force. It supported the HTS waiver for "express carriers and other similarly capable supply chain actors."

It said many of the additional data requirements for enhanced entries are prudent, but asserted it would be challenging for shippers to obtain security scans from foreign port operators to submit to CBP.

NFTC didn't like the fact that eligibility is now discretionary, saying it would create inconsistencies port to port.

It complained that if all packages are rejected on a day where a customer gets more than $800 in aggregate, it would require a Post Summary Correction for early packages that were cleared, which would be very difficult. "Businesses and consumers who initiate the shipment of multiple low-value products have no way of knowing the date that a single shipment will arrive at a port or if other shipments will arrive on the same day," NFTC argued.

The Coalition for a Prosperous America, in contrast, said it was "unconscionable" CBP would promulgate rules on de minimis when it can't even police the $800/day limit.

CPA's submission said the results of the Type 86 test and the Section 321 data pilot "demonstrate that 'more information' from parties who are effectively either unaccountable for the information they supply, or entirely beyond our jurisdiction, does nothing to limit the flow of contraband into the United States." It said CBP should not build on those programs, which they said have widespread failures.

As proof of those failures, CPA quoted a half-dozen current and former CBP officials, quoted in International Trade Today articles over the last two years, talking about weaknesses in Type 86 compliance. See 2304170052, 2309110059 and 2402270082).

It complained that there are no consequences for brokers' negligence -- noting that Seko Customs Brokerage was reinstated.

The CPA quoted some CBP employees who helped those who wrote the Regulatory Analysis and Regulatory Flexibility Act Analysis that accompanies the rule, including James Moore, program manager, cargo and conveyance security at CBP, who said: "De minimis is CBP's highest risk environment, and yet the one with the least data -- and often, the data that is provided is misleading."

The National Council of Textile Organizations did not engage with the specific proposals in ELVS, but said the status quo puts price pressure on domestic manufacturers of clothing, shoes, toys, auto parts and other sub-$800 items, as well as retailers who pay duties on their bulk imports. It said that de mininis undermines free trade agreements and trade preference programs.

De minimis shipments rose again during FY 2024 to over 1.36 billion packages, valued at $64.6 billion.

"We reiterate our call for the Trump administration to close the de minimis loophole immediately to give U.S. textile and apparel manufacturers a chance to compete on a more level playing field."

American Trucking Associations wrote that 174 million de minimis shipments entered the U.S. via truck.

It said that Type 86 is flawed, and clearing goods off the manifest, with additional data, is worth preserving. The group also said that CBP shouldn't apply duties to packages already cleared if the aggregated total exceeds $800.

The group asked for at least one year of informed compliance, and noted that the quick roll-back of the de minimis restriction from the White House came "after bottlenecks started forming at ports of entry, and it became clear that CBP did not have the necessary resources to collect tariffs on all the products that no longer qualified for the de minimis exemption."

The International AntiCounterfeiting Coalition wrote that with the rise of e-commerce and explosive growth of de minimis imports, IP seizures have doubled over the last four years, and their value has quadrupled.

"While some commenters will undoubtedly bemoan the proposed regulatory amendments as an undue burden, or suggest that the revised rules will lead to increased costs or longer timelines for the clearance and entry of goods, we believe that the new procedures will have the opposite effect," the group wrote, and said the outcome of the pilots show that.

The IACC members support discretion to require formal entry, and agree that changes to language about who can bring in de minimis packages is necessary.

The Partnership for Safe Medicines wrote, "We oppose and are concerned that CBP appears to want to expand on the Entry Type 86 Test," as it said CBP should return to screening and clearing goods as it did four years ago.

"CBP should require advanced electronic PGA data submission for regulated products, as it does in cargo shipping environments. This will allow CBP to flag high-risk shipments for manual review before release," the group said.

It noted that counterfeit medicines can be deadly, either because they are disguised powerful opiates, or because they claim to be medicines to treat serious diseases like cancer and diabetes, but have no active ingredients.

The group's submission noted recent seizures of pill presses at the FedEx Hub in Indianapolis, in January, and a seizure at the Miami International Airport earlier this month of "sibutramine, an unapproved medicine withdrawn from the market in 2010 because it increased the risk of cardiovascular events."

"We recommend maintaining a Restricted Importer List for repeat violators, as well as requiring detailed seller identification for e-commerce shipments to increase accountability," the group wrote.

Like many commenters, it pointed to the mail as a weak link in import security. "In 2018, the Senate passed the STOP Act to require advance electronic data for all mail shipments coming into the United States. From conversations with CBP officials and reports, it is our understanding that this requirement is still not fully implemented. This rule-making is CBPs opportunity to correct this issue and require immediate compliance with AED requirements, which USPS has had nearly ten years to implement. CBP should propose and require an aggressive phased plan that ensures full compliance within the year and refuses entry for all shipments lacking the required AED."