SCOTTSDALE, Arizona -- The increase in the de minimis value threshold last year seems already to be driving a shift in international trade patterns, said Brenda Smith, executive assistant commissioner for the CBP Office of Trade, during a May 25 interview at the West Coast Trade Symposium. "What we're seeing is significant changes in supply chains," reflected in the growing number of Section 321 entries, she said. For example, one port in Alabama with few CBP officers "is suddenly getting this flood because it's close to a distribution center," she said. Likely, that's a result of container-loads full of under $800 small packages that qualify for de minimis, she said.
Despite the near elimination of an account for ACE development in the proposed fiscal year 2018 budget (see 1705230031), CBP is requesting additional funding for ensuring the system continues to operate smoothly, according to its FY 2018 budget justification (here). The proposed budget includes an “increase of $45.1 million” in FY 2018 for “ACE Core Functionality,” including funding for additional “software sustainment teams.” CBP is also requesting substantial increases in funding required to implement mandates in the Trade Facilitation and Trade Enforcement Act of 2015.
The high U.S. de minimis level has contributed to an upsurge in overseas distribution centers where higher-value items are broken down into smaller quantities for shipment to the U.S., the National Customs Brokers and Forwarders Association of America said in comments to the Commerce Department on U.S. trade deficits (here). Low reporting standards for de minimis shipments mask the volume of those imports, as the Census Bureau can’t acquire information on those goods, NCBFAA said. This translates to a huge quantity of imports not calculated in the U.S. trade deficit, the association said. Comments from trade groups questioned the validity of the trade deficit as a measure of U.S. economic health and fair trade, while others tied deficits to antidumping and countervailing duty collection issues.
CBP is developing a repository of possible deregulatory actions that could serve as offsetting actions for regulatory proposals considered "significant" by the Office of Management and Budget, said Alice Kipel, executive director of CBP's Office of Regulations and Rulings (OR&R), during a May 8 interview. Federal agencies, under a January executive order, are required to repeal two regulations for each new regulation seen as "significant" by OMB (see 1702070048). So far, though, OMB has not flagged any trade-related CBP regulations as "significant," Kipel said. "At this time, with respect to the regulations that CBP has in the interagency review process, I am not aware of any trade regulation that has been deemed 'significant' by OMB and offsetting regulations would not be immediately" necessary if it hasn't been deemed significant, she said.
International Trade Today is providing readers with some of the top stories for March 6-10 in case they were missed.
A wide range of legal issues around CBP's new processes for antidumping or countervailing duty evasion allegations under the Enforce and Protect Act (see 1608190014) (EAPA) will require litigation to clarify, panelists said March 9 at the International Trade Update. For example, if CBP decides to impose higher bonding requirements on an alleged evader, can the importer then file for a temporary restraining order or preliminary injunction with the Court of International Trade to stop CBP, asked Jonathan Stoel, a lawyer with Hogan Lovells. Practical scenarios like that will need to be played out to give a better look at the possible strategies for lawyers involved, according to panelists at the event hosted by the Georgetown University Law Center.
CBP scheduled a March 14 workshop to go over the processes involved in antidumping or countervailing duty evasion allegations under the Enforce and Protect Act (see 1608190014), CBP said (here). "While CBP has issued regulations, the procedures continue to be refined as we gain experience with these investigations," the agency said. "We will walk through an example EAPA investigation to demonstrate the role of the parties in the investigation and the steps that CBP may take to pursue an allegation, while also discussing what constitutes a valid allegation." The event will "provide valuable information to parties who are filing allegations or defending against allegations," CBP said in a flier on the event (here).
CBP issued the following releases on commercial trade and related matters:
A recent executive order requiring the repeal of two regulations for every new one implemented applies only to regulations deemed “significant” by the Office of Management and Budget, according to “interim guidance” issued by OMB on Feb. 2 (here). The interim guidance also lists exemptions to the “two-for-one” and regulatory budgeting requirements set by the executive order, as well as what qualifies as a deregulatory action, including elimination of reporting and recordkeeping requirements. Despite the potential burden, the interim guidance said agencies must perform new cost analyses for the two deregulations, rather than relying on previous cost estimates.
Despite CBP's new investigatory authorities for antidumping or countervailing duty evasion allegations, the agency's role remains "ministerial" and it must still defer to the Commerce Department in many cases, the China Chamber of International Commerce said. "CBP must keep in mind that it is [Commerce] that determines the scope of antidumping and countervailing duty orders" and "CBP lacks the authority to interpret ambiguous scope language," it said. The CCOIC, represented by Alston & Bird, submitted the comments to CBP (here) as part of CBP's request for comments on its interim regulations implementing the Enforce and Protect Act (EAPA) provisions (see 1608190014).