De Minimis Changes Likely an Easy Lift for CBP, More Work Needed to Align PGAs, Says EAA's Mullen

An increase to the de minimis threshold, the first of likely many changes to CBP's regulations due to the customs reauthorization law (see 1602260049), is expected to be a relatively easy update, said Mike Mullen, executive director of the Express Association of America. Mullen is involved in ongoing discussions between industry and CBP on the changes, which are targeted for implementation by March 10, he said during an interview on March 1. Mullen has long pushed for changes to de minimis on behalf of the group's members, which include UPS and FedEx.

The new law changes the de minimis level -- the value threshold under which CBP processing for most imported goods isn't required -- from $200 to $800. Given the law's clarity on the de minimis changes, CBP can make the change through a Federal Register notice without the administrative processes, such as a public comment period, often associated with regulatory changes, Mullen said. "Technically, it's easy to do," he said. The increase also requires some changes on the information technology side at CBP, but that's "fairly simple," he said. CBP agreed with that assessment, said a CBP spokeswoman. The law "amends Statute 19 USC 1321 to enable CBP to implement," she said.

While the changes to de minimis mark an important and necessary step, there remain some related issues to be resolved, said Mullen. The regulations on de minimis spell out some exempted products that don't get simplified clearance, regardless of the value of a shipment, Mullen said. Such goods are mostly regulated by other Partner Government Agencies (PGAs) at the border, he said. "The thinking is, regardless of value, agencies like FDA and the Centers for Disease Control, that they have to regulate those products for health and safety reasons," he said. As a result "arrangements have been made along the border to clear those products expeditiously," since it's effectively impossible for the agencies to screen all of the goods, Mullen said. Now, with the de minimis threshold going to $800, there will likely be "a lot more of those" shipments, he said.

While it won't be before March 10, future discussions will be necessary on "on how to handle these PGA regulated products to make sure that those agencies have the ability to do their job" and get after the high risk products, while allowing the lower risk items through, said Mullen. That issue is also tied up with the implementation of the Automated Commercial Environment and the Single Window, which should be the focus for the agencies in the immediate future, said Mullen. "We have to get ACE in place, get it up and running and get this single U.S. government release and clearance process fully operational, and then we can have a discussion about low value shipments," he said.