CPA Says de Minimis Legislation Moves in Right Direction

The Coalition for a Prosperous America, which advocates for protecting American manufacturing, said the new Senate Finance Committee bill to restrict de minimis moves "things in the right direction," even more than the bill that passed the House Ways and Means Committee in the spring.

A recent blog post noted the Senate Finance Committee chairman's bill goes farther than the House version, in barring apparel from all countries from de minimis. "Excluding entire product categories is stronger than excluding merchandise subject to Section 301 actions, as the latter exclusion’s use of a scattering of 8-digit HTS codes invites fraud," Charles Benoit wrote.

However, he expressed concern that the bill could make the Type 86 process law, which would give CBP less leeway to remove shippers from the program, as they did recently for several firms that were not compliant.

He also said the bill's text requires CBP to give notice for detentions, including information on what is needed for CBP to clear packages. "Yes, that’s right: per Sec. 6, if CBP wants to detain a sketchy Temu package sent from “luckysh1p39569” in Guangzhou, China, that vendor is entitled to detailed notice from CBP," he wrote.

The coalition thinks there should be no de minimis at all, and said the administration could eliminate it without legislation; Benoit praised Sen. Sherrod Brown, D-Ohio, for calling for an end to duty-free entries altogether. He argued that customs brokers would have won their court case on de minimis in 1994 if it hadn't been for a Supreme Court precedent giving agencies the benefit of the doubt, a precedent that's since been overturned.

Benoit also said he's concerned about CBP's position that some filers might not have to provide Harmonized Tariff Schedule codes for de minimis packages, though the House and Senate legislation both require that. He noted that CBP told International Trade Today that "while the President’s legislative proposal contemplated the reporting of applicable Harmonized Tariff Schedule (HTS) codes for merchandise, it ‘does not preclude the possibility of an exemption or waiver to be implemented by regulation.’" He said Kan "made remarks suggesting that this waiver would only be available to big businesses, like express shippers."

He also said a $2 fee for all de minimis packages "is wildly generous," since other informal entries are charged a Merchandise Processing Fee of at least $2.22 and up to $9.99 -- unless they are coming from Mexico, Canada or other free trade agreement partners.