321 de minimis

The Trump administration continues to seek some major changes to the Section 321 provisions that allow for streamlined customs processing for low-value shipments, said Megan Costello, a lobbyist with Sorini, Samet and Associates. Some in the administration want a total removal of the benefit, while others only want to make sure low-value shipments are subject to Section 301 tariffs, she said. Costello gave a presentation as part of the National Association of Foreign-Trade Zones virtual conference on May 13. An administration official said in April the Office of the U.S. Trade Representative was looking at how it can address some issues with the provisions (see 2004290052)

The Office of the U.S. Trade Representative says that Amazon's foreign websites are “Notorious Markets,” the government's term for sites that “reportedly engage in or facilitate substantial piracy or counterfeiting.” USTR says its goal in naming and shaming through the Notorious Markets List “is to motivate appropriate action by the private sector and governments to reduce piracy and counterfeiting.” Specificially, the agency mentioned Amazon's websites in Canada, the United Kingdom, India, Germany, and France.

The Department of Homeland Security will take several new steps toward preventing the importation of counterfeit goods, executive branch officials said during a Jan.24 press conference to discuss a report on the subject. Peter Navarro, a close White House adviser on trade, said of the report: “What they produced is both historic and transcendent. The guts of this are the 10 sets of government actions that will be implemented immediately.” But, he said, 10 best practices for private industry -- which are voluntary -- are as important, if not more important. He said that currently, the burden is on the intellectual property rights holders to police the internet, and the government to catch counterfeits in shipments.

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 offered a review of the Section 321 data pilot (see 1907220025) and the Type 86 entry test (see 1908120019) in a new document posted by the National Customs Brokers & Forwarders Association of America. The data pilot is meant to "more clearly and accurately identify the entity causing the 321 shipment to move, the final recipient, and the contents of the package," CBP said. The ACE Type 86 entry test is hoped to give "greater visibility into the de minimis universe for both CBP and [partner government agencies] PGAs while ensuring regulatory requirements are met." The data pilot is limited to nine participants, while the Type 86 test is open to all customs brokers and self-filers.

The Office of the U.S. Trade Representative is reviewing the Section 321 provisions that allow for duty exemptions for low-value goods in light of "efforts to circumvent the requirements of the de minimis provisions in U.S. law," USTR Robert Lighthizer told lawmakers in recently released written responses to House Ways and Means Committee members following a June 19 hearing (see 1906190035). Asked about "the operation and impact of U.S. de minimis policy" by Rep. Bill Pascrell, D-N.J., Lighthizer said he's "particularly concerned" about those efforts to improperly use the exemption.

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.

A "Denied Commodity List" that includes "products and/or sources subject to known" intellectual property rights violations is one possible way to slow trade in counterfeit goods, the Commercial Customs Operations Advisory Committee said in comments dated Aug. 1 and posted Aug. 6 in docket DOC-2019-0003. Such a list might include "products and supply chains adjudicated as violating counterfeiting or piracy laws and/or regulations on at least more than one occasion," the COAC said. The comments are in response to President Donald Trump’s April 3 memorandum that directed the Commerce Department to collaborate with other federal agencies on a report due Oct. 30 with recommendations about how to reduce the bad behavior (see 1907080030).

A third party logistics provider in Toronto will offer a new service to take advantage of Section 321 de minimis exemptions, the company said in an Aug. 7 news release. Stalco, the 3PL, will let "U.S. sellers have their inventory shipped from countries, such as China, directly to Stalco’s distribution centre in Canada," it said. "Where applicable, duty is paid to Canada Customs (CBSA) on the cost of goods," it said. "Stalco then picks, packs and ships the client’s U.S. consumer orders and automatically files for a refund with CBSA on the previously paid duty, on the seller’s behalf. Consumer orders with a value less than US $800 do not attract duty on entry to the USA when imported under the Section 321 clearance type." This service "allows companies to eliminate their duty costs when selling goods directly to U.S. consumers," the company said.

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.