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Stricter US Customs Enforcement on E-Commerce Imports

Stricter US Customs Enforcement on E-Commerce Imports



US Customs Enforcement on E-Commerce

Overview of Regulatory Tightening


U.S. Customs and Border Protection (CBP) is intensifying its oversight on low-value e-commerce imports, suspending several customs brokers from a program meant to expedite these shipments. This action is in response to compliance issues and the need to curb the entry of illicit goods.


Background on De Minimis Rule


In 2016, the de minimis threshold was increased from $200 to $800, allowing duty-free entry for low-value imports to facilitate growing online shopping. This change led to a surge in e-commerce imports, particularly from China and India, overwhelming CBP's capacity to monitor these shipments effectively.


Current Challenges


A November 2023 report by the International Trade Commission revealed that Section 321 shipments form a significant portion of U.S. e-commerce imports, with China being the largest source. CBP now processes nearly 4 million de minimis shipments daily, a 646% increase over eight years. Most arrive via commercial aircraft and vessels, with some inventory staged in Canada and Mexico.


Compliance Issues and Broker Suspensions


CBP suspended several brokers for failing to meet Entry Type 86 requirements, which include accurate classification, valuation, and timely data submission. Acting CBP Commissioner Troy Miller emphasized the importance of these actions to prevent misuse and ensure compliance. Seko Logistics, among those suspended, has sued CBP, claiming nearly 100% compliance.


Impact on E-Commerce and Air Cargo


Companies like Shein, Temu, and AliExpress have significantly boosted the air cargo industry, representing 50% of airfreight from China. The $800 duty exemption has driven this growth, especially as online shopping surged during the pandemic. However, the practice of using de minimis shipments to avoid tariffs has raised regulatory concerns.


Legislative and Industry Responses


Congress is considering legislation to eliminate de minimis treatment for Chinese imports and enhance data collection. Trade experts warn this could increase costs for U.S. businesses and complicate international trade. The E-Merchants Trade Council (EMTC) proposes developing risk profiles for e-sellers to focus enforcement on high-risk shipments.


Conclusion


CBP's stricter enforcement on low-value e-commerce imports underscores the need for compliance and advanced data practices. Businesses must adapt to new regulatory requirements to navigate international trade complexities while meeting consumer demand efficiently and legally.


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