Low-Value Shipment Group Floating Legislative Changes for Section 321
The mistrust by the current administration of the de minimis exemption for low-value shipments may provide an opportunity to revise the law and address some inconsistent approaches, Bryan Wolfe, vice president-international trade at Ascena Retail Group, said during the National Association of Foreign-Trade Zones virtual conference on Nov. 6. Ascena, the parent company of Ann Taylor, Loft and other brands, is a leading member of Ship Safe Coalition, which advocates for policy changes around de minimis. The coalition expects that some coming changes to the de minimis entry process could be a time for “compromise between eliminating de minimis altogether and keeping it as is,” Wolfe said in his presentation.
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The Ship Safe Coalition, which counts the NAFTZ as a member, has a legislative proposal that would amend “Section 321 and the FTZ Act to allow duty-free treatment of goods meeting the de minimis threshold withdrawn on one invoice (or order) per ultimate consignee on one day.” The proposal would also clarify the FTZ Act to say “'retail trade' rule does not apply in e-commerce transactions for the withdrawal of FTZ goods that meet the duty-free de minimis threshold.”
The de minimis issue would likely have much less immediate attention under a Joe Biden administration. The Biden campaign hasn't mentioned a policy preference related to de minimis and “is unlikely to be a priority item for them upon taking office,” Wolfe said in the presentation. A continued Trump administration would likely make “significant changes to de minimis in the first half of 2021, either by eliminating it altogether or making it more difficult to use.”
It seems clear that the current “administration doesn’t like de minimis” and is “looking at ways that they can take that off the plate for folks in the guise of counterfeiting and illicit shipments that come into the country,” he said. There have been some recent administrative actions that seem to target de minimis and e-commerce (see 2010130051 and 2008210038). The administration found little interest in Congress to end the exemption or lower the de minimis threshold and was similarly unable to make changes through USMCA language, Wolfe said. “So they really are focused on how to make it more difficult to use,” he said. Along those lines, a proposal is expected that would end the de minimis exemption for goods from China and Europe subject to Section 301 tariffs (see 2009040026).
Express carriers are particularly worried about the proposal and are working to convince the Office of Management and Budget (see 2010190021) that such a change would be “economically significant,” Wolfe said. Without a designation of “economically significant,” the proposal “could be implemented 30 days after the rulemaking is published without giving the public a chance to comment,” Wolfe said in the presentation. The threshold is $100 million in annual impact and the express carriers say the impact to “them alone is probably four times that.”