CBP Advances Proposal on de Minimis, Sets Higher Damages for Failure to Present Low Value Cargo

CBP has “cleared” its long-awaited proposed rule on low value shipments, and the proposal will now go to the Office of Management and Budget for review, acting Commissioner Troy Miller said at a Commercial Customs Operations Advisory Committee meeting March 6. If OMB declares the rule “significant,” the proposal will then go for interagency review prior to publication in the Federal Register, Miller said.

CBP has said the "extremely complex" rule on de minimis, which stems from lessons learned in the agency's Type 86 and Section 321 data pilots, is one of the agency’s highest priorities as it seeks to address enforcement concerns around low value shipments (see 2309110059).

At the COAC meeting, Miller announced another measure intended to address those enforcement concerns. He said he is "exercising authority" to increase liquidated damages for failure to present packages CBP has designated for examination. A CBP official recently said the rate of small packages designated for examination but not presented to CBP is as high as 25% at JFK Airport (see 2304170052).

Per Miller's announcement, liquidated damages on custodial and international carrier bonds for failure to present cargo designated for inspection will rise to $1,000 per bill of lading. Previously, liquidated damages were limited to the value of the cargo involved in a breach, Miller said. These claims will be subject to petitioning and “mitigation” as any other claim for liquidated damages would be, Miller said.

CBP also is working with DHS Secretary Alejandro Mayorkas to finalize a plan to “intensify targeting and enforcement” of illegal customs practices harming U.S. textile manufacturers, Miller said. Mayorkas directed CBP and Homeland Security Investigations to create a plan for textiles within 30 days in January (see 2401310047).

The plan addresses “trade industry concerns regarding illegal practices that undermine the fair trading environment for domestic manufacturers,” the acting commissioner said. Under the plan, "violators will not qualify for preferential duty treatment under USMCA, CAFTA-DR or other trade agreements, and will be subject to payment of duties, owed penalties and criminal investigations," Miller said.

"We are committed to engaging with the trade community to promote a fair and level playing field for U.S. industry," Miller said.