NEW YORK -- The executive director of CBP's Office of Trade Relations told U.S. Fashion Industry Association conference attendees this week that CBP thought crossing the 1 billion de minimis packages threshold was big, but then volume increased about 40% in the 2024 fiscal year. Felicia Pullam said CBP cannot handle that kind of massive increase and is confident it's stopping dangerous contact lenses, vapes, toys with lead paint, counterfeit airbags, medicines and other illicit goods.
321 de minimis
De minimis is a policy described in 19 U.S.C. 1321 that allows the import of low value articles duty and tax free, provided their aggregate fair retail value does not exceed $800 in the country from which the articles are imported. Additionally, the articles must be imported by only one person on one day. The previous de minimis threshold was $200, but the Trade Facilitation and Trade Enforcement Act of 2015 increased it to $800. Increasing volumes of de minimis merchandise, along with enforcement concerns related to fentanyl and counterfeit merchandise, among other things, have prompted calls to restrict the pathway. De minimis goods may be cleared off manifest, or qualifying goods may be entered under the informal Type 86 entry type.
Felicia Pullam, executive director of trade relations at CBP, defended the administration's proposal to end de minimis eligibility for goods subject to Section 301 tariffs as workable, arguing that charging a $2 fee per de minimis package will allow the agency to hire more staff to screen for contraband, and pushing back on industry arguments that collecting tariffs on low-value packages costs the agency more than that revenue.
The administration rebranded two pending rulemaking processes and revived one that was abandoned in 2021 to address the compliance risks of de minimis shipments as well as shrink the volume of direct-to-consumer imports.
CBP unveiled Aug, 2 a list of proposals further defining just how President Joe Biden expects the agency to implement Biden’s "Detect and Defeat" legislation (see 2407310030) aimed at thwarting fentanyl and other illicit drugs from entering the U.S. via the millions of de minimis shipments or imports that are worth less than $800.
The Treasury Department published its spring 2024 regulatory agenda for CBP. The agenda continues to list a proposed rule to amend CBP’s regulations on the entry of “certain low-value shipments not exceeding $800 that are eligible for an administrative exemption from duty and tax.”
A "back to basics" webinar on de minimis presented by CBP, which was watched by more than 1,900 in the trade community, didn't elaborate on the suspensions of customs brokers from Type 86, though CBP official Felicia Pullam said the agency has heard "a lot of concern in the trade community about this enforcement."
CBP's Acting Commissioner Troy Miller said the agency "has suspended multiple customs brokers from participating in the Entry Type 86 Test after determining that their entries posed an unacceptable compliance risk," and that it will continue to take action against those who "abdicate their customs compliance responsibilities." The statement also said: “Any broker that has been suspended will be considered for reinstatement if it demonstrates to CBP that it has developed and implemented a remedial action plan."
The subcommittee that covers intellectual property issues under the House Judiciary Committee questioned how Congress should address the escalating volume of de minimis packages -- and the opportunities those shipments provide for sending counterfeits and goods made with forced labor, but the CBP witness responsible for de minimis and IP declined to back any of the ideas that were bandied about.
FORT LAUDERDALE -- While CBP's Entry Type 86 pilot has allowed customs brokers to handle low value shipments, the agency also is seeing filers "abusing" the test by filing unverified data and pricing out other brokers who can't compete with the low fees the bad actors are charging, said CBP acting Commissioner Troy Miller in remarks at the National Customs Brokers & Forwarders Association of America annual conference April 17.
PHILADELPHIA -- When CBP ran an audit to estimate how many packages that enter under de minimis violate Customs laws, it found about 9% did, either through misclassification, insufficient documentation, or more serious violations, like smuggling narcotics.