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.
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.
CBP has “cleared” its long-awaited proposed rule on low value shipments, and the proposal will now go to the Office of Management and Budget for review, acting Commissioner Troy Miller said at a Commercial Customs Operations Advisory Committee meeting March 6. If OMB declares the rule “significant,” the proposal will then go for interagency review prior to publication in the Federal Register, Miller said.
The shorter time frame for filing type 86 entries announced by CBP Jan. 12 is likely intended to allow the agency to target de minimis shipments in advance and give it more time to complete its targeting processes, said customs brokers asked about the policy change.
The Treasury Department published its fall 2023 regulatory agenda for CBP. The agenda includes a new mention of 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.”
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."
CBP plans to propose some new requirements for importing low-value shipments, Craig Clark of the Office of the Commissioner, Office of Trade Relations, said during the virtual Advisory Committee on Supply Chain Competitiveness (ACSCC) meeting Jan. 28. “We are taking steps to integrate the results of both the [Section] 321 data pilot and the Entry Type 86 test into a new Section 321 data collection process through a notice of proposed rulemaking,” he said. “Included in that NPRM is a requirement for mandatory security data elements for all Section 321 shipments, and that is going to be agnostic to the mode of transportation and will include international mail as well as additional mandatory data elements if an entry is filed,” he said.
CBP is developing a “hybrid” process for low-value shipments based on the lessons from the low-value shipment data and Entry Type 86 pilots, Jim Swanson, CBP director-cargo and conveyance security and controls, said during a CBP Virtual Trade Week session Sept. 10. “We are looking at what a hybrid is going to look like,” he said. “What kind of process can collect this additional information from the party who owns it, get it in an early enough time for safety and security and enforcement perspective?” he said.
CBP will not be enforcing its power of attorney (POA) requirements and one-person, one-shipment limits on an entry-by-entry basis as it conducts its Type 86 pilot of filing de minimis shipments via the ACE Automated Broker Interface, said Jim Swanson, CBP director-cargo and security controls, during a trade call held Sept. 26. The agency will still apply existing regulations on those areas in the pilot, but that will come in the “post-audit environment,” not at the time of entry, Swanson said.
CBP is issuing a notice formally announcing the beginning of a pilot to test a new type of informal entry in ACE for low-value shipments. New entry type 86 will allow importers of goods valued under the $800 de minimis level to file a less complex entry, including for goods subject to partner government agency (PGA) requirements, “and will expedite the clearance of compliant Section 321 low-valued shipments,” CBP said. The test will begin “no earlier than,” Sept. 28.
The lack of information provided to the government for low-value shipments is a major impediment to stopping imports of counterfeit goods, the National Customs Brokers & Forwarders Association of America told the Commerce Department in a July 29 filing. The comments were filed in response to Commerce's request for input on the subject as it prepares a report for the president (see 1907080030). "For de minimis shipments valued at $800 or less, CBP clears shipments by processing data from manifests, which provides only limited data and does not include the information most needed for effective commercial targeting," the group said.