Wyden Working on de Minimis Restriction Bill

The bill, called Fighting for America Act of 2024 (Fighting Illicit Goods, Helping Trustworthy Importers, and Netting Gains for America), says that it's time for Congress to review customs procedures, given the growth in direct-to-consumer shipments, which it says "has accelerated attempts to ship illicit drugs and other unauthorized products through low-value shipments," and given that tariffs "seeking to ensure a level playing field for United States workers have increased" at the same time.

It shares several elements with legislative proposals on de minimis announced by CBP on a call Aug. 2 (see 2408020057).

The text says that the treasury secretary "shall require" filers of de minimis shipments to include a 10-digit Harmonized Tariff Schedule code, a description that's sufficiently specific to allow CBP to evaluate whether the HTS code is correct, and the country of origin of the good.

The submitter "shall ensure that documentation or information is true and correct to the best of the person's knowledge and belief," and if they do not follow the rules, they will be subject to a $1,000 civil penalty for the first violation and $5,000 for each subsequent violation.

Express Association of America Executive Director Mike Mullen said he thinks requiring 10-digit HTS codes to improve targeting is the wrong approach.

"We’ve continually told CBP that’s not the best system for doing that," he said. "The problem with that is, if someone’s bringing in a pill press illegally, do you think they’re going to put in the description pill press?"

He said, no, they'll put metal parts, and the HTS code will match.

The bill says if someone provides a false statement to CBP, saying the package qualifies for de minimis when it does not, that is fraud, and the violation will carry a $5,000 fine on the first instance and $10,000 for further violations.

In addition to goods covered by Section 301 tariffs, the text says that goods covered by tariff rate quotas, antidumping and countervailing duties, safeguards and Section 232 duties are prohibited from de minimis entry. Not only that, but textiles and apparel from any country in the world are banned from de minimis, as are other categories deemed "import sensitive" in GSP legislation.

All these changes, along with a $2 merchandise processing fee for de minimis entries, would take effect 60 days after enactment.

The bill also gives the treasury secretary authority to carve out any other class or type of product from de minimis if it has been subject to "a significant increase in imports over the trend for a recent representative base period," or if the class or type shows "persistent and significant evidence of hiding the shipment of illicit goods, fraud, counterfeiting or other malfeasance."

All the goods that cannot enter through de minimis will be published on a website, and reviewed at least annually by the Treasury Department, the bill says.

Mullen said his group, along with the U.S. Chamber of Commerce, the National Foreign Trade Council and the E-Merchants Association, is lobbying against restricting de minimis in this way.

"Essentially, it would end the de minimis shipments for a large proportion of shipments that currently receive it," he said. "That’s just a tax on the American people, we don’t understand what the goal of that is."

He said he doesn't think companies such as Shein or Temu that use de minimis heavily for apparel or other goods on the Section 301 list would start sending clothing to American warehouses in containers, and paying the duty on those larger shipments, therefore reducing the volume of de minimis that CBP has to manage. The DHS secretary has said CBP needs Congress to reduce the scale of de minimis so it can get its arms around enforcement and interdiction of fentanyl and fentanyl precursors.

When asked if consumers would change their buying habits to buy goods already in the U.S., if the direct imports from China were no longer cheaper, he said no one knows what would happen as a result of such a law.

The bill requires the Treasury, in consultation with the postmaster general, to prescribe regulations within 180 days of enactment to require provision of documentation to CBP, "separate from any entry filing" documentation on goods seeking de minimis entry that is necessary to determine whether the goods qualify for de minimis, whether coming through the mail or any other avenue.

Those regulations "may require" documentation on the offering for sale on e-commerce platforms, the identity of the seller, shipper, carrier and purchaser, the fair retail value in the country it's shipped from, and "other information determined to be necessary to protect the revenue and prevent unlawful importations."

Mullen said such information would be useful for CBP screening.

If goods that sought to enter through de minimis are detained, CBP will tell the parties of interest that they can either submit the data needed, or abandon the merchandise. If no answer is received within 15 days, CBP will deem the goods abandoned, and can dispose of them. Contraband will be summarily forfeited, the text says.

The bill makes smuggling of illicit drugs and related materials "by abusing entry procedures" under de minimis a priority trade issue.