321 de minimis

Objections to the exemption of low value shipments from the Section 301 duties on goods from China demonstrates the need for a change in law to allow for de minimis exemptions for goods withdrawn from foreign-trade zones, the 321 Coalition said in comments to the Office of the U.S. Trade Representative. The comments were part of the docket on the fourth tranche of Section 301 tariffs on goods from China, which are now on hold as the U.S. and China work toward a trade deal (see 1907010012). The coalition similarly said it would like to see federal law changed to allow for de minimis entry for goods from foreign-trade zones as part of CBP's customs framework review (see 1902140022).

The widespread use of Electronic Cargo Security Devices (eCSDs) would create many new benefits to both private industry and the border enforcement agencies, logistics company Expeditors International said in April 11 comments in CBP's docket on creating a 21st Century Customs Framework. "Trade interests and Customs interests both would be well served if the same trade facilitation benefits currently given to CSDs were afforded to eCSDs," Expeditors said. Such devices would be one way to improve trade security within the e-commerce supply chain, the company said.

Several departments are to initiate a broad review of current policies and ways to improve measures to prevent the trade of counterfeit goods, the White House said in an April 3 memorandum. Among other things, the administration would like a review of how different parties, including customs brokers, can help stop the trade of counterfeit and pirated goods, it said. The Department of Homeland Security secretary is tasked with developing a report on the subject within 210 days, along with the attorney general, the U.S. trade representative, the assistant to the president for Trade and Manufacturing Policy and other officials, it said.

CBP posted a draft version of the CBP and Trade Automated Interface Requirements that includes the coming Entry Type 86 that will be used for Section 321 shipments under the de minimis value threshold. "The Entry Type 86 (Section 321) CATAIR will be available for testing in the CERTIFICATION environment starting in June 2019," CBP said in a CSMS message. The new entry type will require a 10-digit Harmonized Tariff Schedule number, and will give filers of low value entries a way to comply with partner government agency requirements (see 1802130035).

The question of how de minimis should fit within the new NAFTA is being grappled with in Congress (see 1902280005) and partner countries (see 1903080033), panelists said March 8 during the International Trade Update at the Georgetown University law school. There was significant pushback from Canada over increasing the value threshold, mostly due to the country's value-added taxes rather than the customs duty collections, said Christine McDaniel, senior research fellow at George Mason University's Mercatus Center.

The American Association of Exporters and Importers is working on proposed legislation that is meant to improve and allow for a more modern customs process, the group said in comments on CBP's request for input on creating a new customs framework (see 1812200003). The proposal, which the AAEI refers to as "Mod Act 2," has been under development for more than a year. The legislation "seeks to take the process of accounting for imported goods and the collection of Customs duties thereon in a new and more modern direction," the trade group said.

The exemption from Section 301 tariffs for goods entered as Section 321 de minimis shipments amounts to a "loophole" that blunts the intended effects of the tariffs, said Michael Stumo, CEO of the Coalition for a Prosperous America, in a Nov. 20 post on the conservative website LifeZette. "It’s a rather strange decision by CBP," Stumo said. "The administration had imposed a tariff on thousands of products that fall within the Section 301 list. But CBP then decided that, as long as an importer brings in less than $800 worth of an item on a particular day, no duties will be collected." Stumo alleged that there's no "statutory or regulatory foundation for the decision, and it contradicts the administration’s goal of changing China’s behavior."

International Trade Today is providing readers with some of the top stories for Nov. 5-9 in case they were missed.

CBP will require advance electronic manifest filing for all commercial trucks with Section 321 shipments starting Jan. 1, the agency said in a Nov. 5 CSMS message. The growth in e-commerce "combined with the increase in the De Minimis value, has resulted in a significant growth in shipments being manifested and released under Section 321," CBP said. "The lack of an electronic manifest eliminates CBP’s ability to conduct a risk assessment or perform advance targeting within the Automated Targeting System (ATS), results in slower processing times and longer wait times."

PALM SPRINGS, Calif. -- CBP’s revised Form 5106 importer ID requirements are currently getting “final approvals” from the Office of Management and Budget and should be coming “sooner rather than later,” said John Leonard, executive director for CBP Trade Policy and Programs, on Oct. 19. The majority of brokers don’t have to be too worried about the changes, seeing that most compliant brokers are already meeting the revised requirements anyway, Leonard said, speaking at the Western Cargo Conference.