WHAT’S THE LATEST

U.S. Customs and Border Protection (“CBP”) recently issued two separate Notices of Proposed Rulemaking (“NPRM”) in the Federal Register in response to the Biden Administration’s actions to address “the significant increased abuse” of the de minimis exemption.

WHAT WE KNOW

  • Current federal law (19 USC 1321) allows for duty free and expedited entry of importations valued under $800 provided they are imported by one person per day.
    • CBP has reported the number of shipments claiming this exemption has increased 600% over the last ten years, from 139 million a year in Fiscal Year (FY) 2015, to 1.4 billion a year by FY 2024. 
  • The January 14 NPRM amends or creates over 30 regulations, most impactful of which is to create an “Enhanced Entry Process” which would end the existing Entry Type 86 pilot while creating additional data elements, including country of shipment, product listing URL and/or a foreign security scanning report, and marketplace name. 
    • While the “Enhanced Entry Process” would require a ten-digit Harmonized Tariff Schedule code as default, waivers for this data element may be available for filers with documented internal controls that ensure certain compliance measures. 
  • Comments on the January 14 NPRM are due by March 17, 2025.
    • The notice and directions on how to submit comments can be viewed here.
  • The January 20 NPRM aims to:
    • Exempt imported goods subject to Section 301, Section 232, or Section 201 trade measures from eligibility for de minimis entry.
    • Require the 10-digit Harmonized Tariff Schedule code of the United States (HTSUS) classification to be provided with certain de minimis shipments.
  • While this would include small amounts of solar, steel, and aluminum products under Section 201 and 232, the inclusion of Section 301 would exempt the majority of product made in China from De Minimis.
    • Based on data published by CBP in the Federal Register Notice, 77% of all de minimis entries would no longer have eligibility for de minimis if the proposed changes are ultimately implemented.
  • Comments on the January 20 NPRM are due by March 24, 2025. 
    • The notice, and directions on how to submit comments, can be viewed here.

WHAT'S NEXT?

The Trump administration has included a review of the de minimis program in its “America First Trade Policy.” However, it has suspended proposed actions, directing all agencies to refrain from implementing new rules or regulations until a department or agency head appointed by the administration has reviewed and approved them.

If you have questions, please reach out to your SEKO representative, or email us at hello@sekologistics.com.