News / Last hurrah for de minimis imports to US consumers before a wave of legislation

© Alexander Kharchenko |

Online merchants selling to US customers, as well as their customs brokers, got an unexpected reprieve last month from the US Customs & Border Protection agency (CBP), which postponed a mandate for advance submission of shipment data.

But a squeeze is looming, notably for Chinese sellers. Several bills are before Congress, which are taking aim at shipments below the de minimis threshold of $800 for US consumers.

On 13 April, the CBP was poised to implement a mandate for advance submission of data for Section 321 Type 86 shipments that fall under the de minimis exemption on duties. This requires shippers and/or customs brokers to file complete and accurate data sets, including full product descriptions and HS codes, on or prior to the arrival of goods in the US.

If the full data set is not with CBP by the time the shipment arrives, the goods are no longer eligible for de minimis treatment and incur duties and clearance charges.

However, shortly before the new regime was set to kick in, CBP postponed the implementation date to allow more time for testing the data programmes the agency is working on to enable automatic processing of Type 86 shipments.

Specifically, CBP is still working on integrating the programme into its Automated Commercial Environment (ACE), which connects the agency with the international trade community and partner-government agencies. The plan is for ACE to automatically reject Type 86 transactions that are not filed in time.

“CBP is leveraging technology such as Type 86 to further enhance and enforce our ability to safeguard citizens by identifying and seizing those packages that contain illegal or harmful items. In fiscal year 2023, CBP screened and processed more than one billion de minimis shipments entering the United States,” said a spokesperson for the agency.

“The Entry Type 86 Test and Section 321 data pilot have shown that the additional data elements enable CBP to better identify shipments that violate US customs and trade laws,” she added.

According to the agency, on a typical day in fiscal year 2023, it processed 1.8m cargo entries and $9.14bn-worth of imported goods through ACE.

CBP has not yet given a new implementation date for the data submission requirements – likely just one step of several looming measures to crimp Type 86 shipments and the de minimis rule, as there are several legislative proposals before Congress that target this traffic.

Like the Import Security and Fairness Act, which proposes that imports from non-market economies (which would include China and Russia) would not be eligible for the de minimis exemptions; the De Minimis Reciprocity Act, that seeks to lower value thresholds for shipments with individual trade partners on the basis of reciprocity. As the US threshold of $800 is significantly higher than those set by most other nations, this would drastically reduce the maximum value allowed for most US imports that currently enjoy Type 86 exemption.

The Customs Modernization Act is a more comprehensive piece of legislation that proposes several amendments to the Tariff Act of 1930 to improve data collection by, and strengthen enforcement activities of, the CBP. This includes a section that aims to prevent more unsafe and illegal imports by allowing CBP to collect more information on Section 321 shipments.

In addition, there is a bipartisan report filed in December that carries 150 policy recommendations, including a reduced de minimis threshold for imports from “foreign adversaries”.

The impetus for this legislative wave comes from several directions: concerns about illegal drugs being sent to the US as Type 86 shipments that exacerbate the Fentanyl crisis; and contraband, including weapons and products that render competing items produced in the US uncompetitive by exploiting the de minimis rule.

“Some very large Chinese exporters are accused of breaking down shipments to values below $800. They’re de-consolidating when the value of the overall shipment is not really below $800,” noted John Haber, chief strategy officer of Transportation Insights.

He said he had “not seen a lot of empirical data to say this is a massive problem”, and added: “No doubt it is a problem, but the evidence is more anecdotal.”

The short notice at which CBP postponed the implementation last month caused a few hiccups. Mr Haber cited the case of a person who was notified by a large express carrier that an import parcel was stuck because the data set had not arrived in time, which disqualified it from de minimis treatment. Clearing it as a non-de minimis shipment would have beaten the purpose of purchasing the item online from overseas in the first place, he said.