White House Pursues De Minimis Crackdown

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Sep. 17, 2024
By: Ashley J. Bodden

On September 13^th, the White House announced its new plan to address agency and Congressional concerns that imports into the United States using the de minimis rules include unsafe and unfairly traded products.

A shipment is typically eligible for the de minimis exemption if the retail value is $800 or less when it is imported into the United States. Qualifying shipments are entered into the United States with minimal paperwork and a low likelihood of physical inspection. Because of this Customs has relatively little ability to tell what is in a de minimis shipment.

Over the past decade, the number of shipments claiming de minimis exemption has risen exponentially. This is true because of the growth of e-commerce, as well as the identification of the de minimis rules as a means to avoid duties for some importers. This has led to concerns that imports are violating trade laws, health and safety requirements, intellectual property rights, consumer protection rules, as well as United States drug laws. Of particular concern have been imports of fentanyl, synthetic drug raw materials, and machinery for drug production.

The Administration’s proposed new rules are intended to aid Customs in enforcing United States law at the time of importation. The proposed new rule includes:

· a proposed rule to exclude from the de minimis exemption all shipments containing products covered by tariffs imposed under Section 201 or 301;

· a proposed rule to require specific additional data for de minimis shipments – including the 10-digit tariff classification number and the person claiming the de minimis exemption; and

· a proposed rule to require importers of consumer products to file Certificates of Compliance (CoC) electronically with CBP and Consumer Product Safety Commission (CPSC) at the time of entry, including for de minimis shipments.

In addition, the White House has urged Congress to pass a comprehensive legislation reform that will exclude import-sensitive products, such as textile and apparel products, from de minimis eligibility of and cement shipments containing products that are covered by Section 301, Section 201, or Section 232 from the de minimis exemption.

De minimis reform has been a bipartisan issue in Congress. Back in February this year, we wrote about a group of Senators urging executive action on de minimis shipments. In April this year, the House Ways and Means Committee approved legislation that prohibits the use of de minimis entry for imports subject to antidumping or countervailing duties and/or Section 301, 201, or 232 tariffs. However, whether legislation will be passed this year still remains to be seen.

For more information on the proposed de minimis changes or foreign trade please do not hesitate to contact an attorney at Barnes Richardson, & Colburn LLP.