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16 January 2025 US Customs and Border Protection publishes amendments for entry of low-value shipments
On 13 January 2025, the United States (US) Customs and Border Protection (CBP) issued a Notice of Proposed Rulemaking (NPR) for amendments to CBP's regulations that exempt from duty and tax certain low-value shipments that do not exceed US$800 per person, per day.1 As part of the proposed rulemaking, CBP is proposing a new entry process to enhance supply chain visibility and enable CBP to better target illegal shipments. This proposed amendment is the first of two NPRs outlined by the Biden-Harris Administration in September 2024. 2 Administrative exemptions3 from duty and tax fall under three categories: (1) bona-fide gifts sent from a foreign country to the US that are valued at US$100 or less (US$200 if the gift originates from certain island possessions); (2) some types of personal or household items accompanying a person into the US that are valued at US$200 or less; and (3) other articles valued at US$800 or less. These exemptions come with specific conditions, including that the total retail value of items shipped to one person in a single day must not exceed the authorized limits. Additionally, exemptions will not be granted if items from a single order or contract are divided into separate shipments to take advantage of duty- and tax-free entry.4 These are referred to as de minimis shipments. The impetus for these proposed amendments is the increase in volume of e-commerce low-value shipments. This volume has challenged CBP's inspection process as low-value shipments have the same health, safety and economic security issues as higher-value shipments, but are subject to less-rigorous entry process and data requirements. Current regulations for entering qualifying low-value shipments are found at 19 U.S.C. 1321(a)(2). These informal entry types are known as a "release from manifest process," whereby CBP releases the shipments using the information on the manifest or bill of lading. This process is slow and labor-intensive, requiring CBP officers to review each entry individually. The increased volume of imports and limited resources at CBP have created challenges in managing this process effectively. Current manifest data is often insufficient or vague, hindering effective screening and timely admissibility decisions. Therefore, providing more information will assist CBP in identifying nonqualifying shipments. CBP aims to combine the aspects of the Section 321 Data Pilot Program5 and Entry Type 86 Test.6 In 2019, CBP launched these two voluntary pilot programs to address low-value shipments. The agency tested whether it was feasible to accept advance data for shipments eligible for an administrative exemption using nine participants from the trade community who transmitted data elements under the Section 321 Data Pilot Program. Using the Automated Commercial Environment (ACE), the Entry Type 86 Test authorized a new informal entry process to qualify low-value shipments subject to PGA data requirements. This allowed shipments that were previously unable to benefit from a section 321 entry due to PGA requirements, to qualify for duty- and tax-free treatment. Both pilot programs have demonstrated benefits for CBP and the trade community, and CBP is using the most useful data elements tested in the Section 321 Data Pilot, and the electronic process that was tested in the Entry Type 86 Test an enhanced entry process. CBP is proposing several amendments to the regulation in an effort to enhance the entry process. Key proposed amendments are outlined below. A new "enhanced entry process" is proposed, combining aspects of the Section 321 Data Pilot and Entry Type 86 Test. To target high-risk shipments more effectively, this process requires advance data submission regarding the contents, origin and destination of shipments. It maintains expedited clearance and duty- and tax-free entry for qualifying low-value shipments. The current release-from-manifest process for low-value shipment is renamed as the "basic entry process" and requires additional data elements to verify eligibility for duty- and tax-free entry. Data elements that would be required for all shipments include:
The following data elements may not be applied to all shipments, but if the data exists it must be transmitted:
The amendments clarify that the "one person" eligible for the exemption is the owner or purchaser of the merchandise and modify the definition of "shipment" to correspond to an individual bill of lading. Under a new HTSUS waiver privilege, parties with documented internal controls may apply for a waiver of the reporting requirements for the 10-digit HTSUS classification for goods that are not subject PGA requirements. The federal rulemaking portal (https://www.regulations.gov) provides instructions for comment submissions, which are due 60 days after publication in the Federal Register using docket number USCBP-2025–0002. Comments may be presented in the form of written data, views or arguments as well as include economic, environmental or federalism effects that may affect the proposed rule. CBP is also looking for comments regarding 19 CFR 143 specifically regarding the "product identifier," "security screening report number" data elements, Harmonized Tariff Schedule of the US waiver process and its potential for lowering costs. Any company involved in US-China e-commerce and/or small parcel trade should identify the potential impact of these changes, both financially and operationally. Immediate actions for companies to consider include:
Document ID: 2025-0258 | ||||||||