International Trade Today is providing readers with some of the top stories published in 2020 in case they were missed. All articles can be found by searching on the titles or by clicking on the hyperlinked reference numbers.
321 de minimis
De minimis is a policy described in Section 321, 19 USC 1321. It allows the import of articles duty and tax free, provided their aggregate fair retail value does not exceed $800 in the country from which the articles are imported. Additionally, the articles must be imported by only one person on one day. The previous de minimis threshold was $200, but the Trade Facilitation and Trade Enforcement Act increased it to $800.
The mistrust by the current administration of the de minimis exemption for low-value shipments may provide an opportunity to revise the law and address some inconsistent approaches, Bryan Wolfe, vice president-international trade at Ascena Retail Group, said during the National Association of Foreign-Trade Zones virtual conference on Nov. 6. Ascena, the parent company of Ann Taylor, Loft and other brands, is a leading member of Ship Safe Coalition, which advocates for policy changes around de minimis. The coalition expects that some coming changes to the de minimis entry process could be a time for “compromise between eliminating de minimis altogether and keeping it as is,” Wolfe said in his presentation.
A change in administrations could boost the National Association for Foreign-Trade Zones' rear guard action against a proposal for the USMCA technical fixes bill, lobbyist Brian Hannigan told listeners at the NAFTZ virtual conference Oct. 29.
CBP is developing a “hybrid” process for low-value shipments based on the lessons from the low-value shipment data and Entry Type 86 pilots, Jim Swanson, CBP director-cargo and conveyance security and controls, said during a CBP Virtual Trade Week session Sept. 10. “We are looking at what a hybrid is going to look like,” he said. “What kind of process can collect this additional information from the party who owns it, get it in an early enough time for safety and security and enforcement perspective?” he said.
CBP is apparently working on a regulatory change that would eliminate the $800 de minimis exemption for goods subject to Section 301 tariffs. The agency on Sept. 2 submitted to the Office of Management and Budget a proposed rule titled “Excepting Merchandise Subject to Section 301 Duties from the Customs De Minimis Exemption,” according to OMB’s Office of Information and Regulatory Affairs website.
CBP is apparently working on a regulatory change that would eliminate the $800 de minimis exemption for goods subject to Section 301 tariffs. The agency on Sept. 2 submitted to the Office of Management and Budget a proposed rule titled, “Excepting Merchandise Subject to Section 301 Duties from the Customs De Minimis Exemption,” according to OMB’s Office of Information and Regulatory Affairs website. OMB’s reviews are the final step before publication of a rule, and include an interagency review. CBP did not immediately comment.
CBP is still working out of some details around the recent policy shift for Section 321 shipments (see 2008040044), an agency official said during an Aug. 20 call with trade professionals. CBP said that it is finding a significant number -- though not a majority -- of the millions of packages that enter the U.S. under de minimis in a month do not qualify for that category. Jim Swanson, CBP director-cargo and conveyance security and controls, said the agency is crunching data to see which shippers have been violating de minimis guidelines most frequently.
The broader impact of CBP's ruling on unsold low-value goods imported under Section 321 exemptions may be somewhat limited, industry experts said in recent interviews. The ruling (see 2007310036) laid out how the agency determines what entities can be considered a “person” for unsold Section 321 shipments.
Shipments of unsold merchandise entered under Section 321 exemptions must list “the proprietor of the warehouse operated by the online fulfillment service provider as the ultimate consignee,” CBP said in a ruling posted by the agency on July 31. The ruling came in response to an internal advice request from Jim Swanson, CBP director-cargo and conveyance security and controls, it said. “While a nonresident may not be listed as the ultimate consignee, the nonresident may make the informal entry as an owner or purchaser,” CBP said.
CBP should “seek and obtain the legal authority” to create a Restricted and Prohibited Parties List of known intellectual property rights violators to help fight imports of counterfeit goods, the Commercial Customs Operations Advisory Committee IPR Working Group said in recommendations. The list should consist “of foreign and domestic parties (i.e., individuals, companies or organizations) who are known offenders due to repeat violations,” it said. The group will present the recommendations during the July 15 COAC meeting.