The new entry requirements will help control illicit activities and improve enforcement, but they may present challenges for businesses that depend on the de minimis exemption.
The U.S. Customs and Border Protection (CBP) has introduced a proposal to revamp how low-value shipments enter the country.
The proposal, known as the Entry of Low-Value Shipment (ELVS) rule, is the first of two Notices of Proposed Rulemaking (NPRMs) announced by the Biden-Harris Administration in September 2024.
This initiative is part of a broader effort to strengthen border enforcement and close loopholes often exploited for smuggling counterfeit goods, illegal substances, and other restricted items.
This change, focused on imports eligible for the de minimis exemption (shipments valued at $800 or less), will introduce more stringent data collection requirements that impact importers, e-commerce platforms, and other stakeholders in the global supply chain.
The de minimis exemption has been a critical facilitator for cross-border e-commerce, allowing businesses to ship goods valued at $800 or less without paying duties.
The CBP processes over 4 million de minimis shipments into the U.S. daily. The current regulations mandate that importers supply minimal information to CBP for these shipments, in contrast to what is needed for other types of cargo.
The excessive number of low-value shipments and the insufficient actionable data gathered under current regulations hinder CBP’s ability to identify and interdict high-risk shipments that may contain illegal drugs, such as illicit fentanyl, goods that pose a risk to public safety, counterfeit or pirated items, or other contraband.
Moreover, some companies have exploited the de minimis exemption to evade duties. The ELVS proposal seeks to address vulnerabilities like these by requiring more robust data submission.
With this proposal, CBP aims to strike a balance between facilitating legitimate trade and ensuring vigorous enforcement, which will help protect consumers and legitimate businesses from counterfeit goods, illegal drugs, and other threats.
On January 14, 2025, CBP, in collaboration with the Department of the Treasury, issued a notice of proposed rulemaking (NPRM) aimed at amending regulations governing the entry of low-value shipments.
At the heart of the proposal is the introduction of an enhanced entry process. This process will require importers to submit more detailed electronic data for shipments utilizing the de minimis exemption.
CBP has also proposed modifications to verify the eligibility of shipments as bona fide gifts or other items qualifying under the administrative exemption.
CBP is inviting public feedback on these proposed changes until March 17, 2025. Stakeholders, including importers, logistics providers, and e-commerce platforms, are encouraged to share their insights on how the enhanced entry process might impact their operations.
Under the proposed rules, CBP plans to establish two distinct processes for low-value shipments: the enhanced entry process and the basic entry process.
This framework differentiates between goods requiring heightened scrutiny and those eligible for the traditional exemption.
Designed for shipments that require closer monitoring, this process builds on CBP’s Entry Type 86 Test and Section 321 Data Pilot programs. It will require electronic submission of comprehensive data before clearance.
Key data points include:
The basic entry process will apply to low-value imports that do not fall under the jurisdiction of other federal agencies or require heightened scrutiny.
Importers will still need to provide essential details, such as the names and addresses of the duty-exempt individual and the merchandise recipient, but will not face the expanded data submission requirements of the enhanced entry process.
The ELVS rulemaking is part of CBP's broader strategy to improve trade enforcement. These efforts include leveraging existing authorities, improving tools and automation, and strengthening the enforcement of textile and apparel trade laws.
The Biden-Harris Administration anticipates publishing a second NPRM in the coming days to build upon the foundation laid by this proposal.
CBP Senior Official Performing the Duties of the Commissioner, Pete R. Flores, highlighted the significance of these efforts, stating, “Every day, the men and women of CBP interdict goods that threaten the health and safety of Americans as well as the economic vitality of our country. We see illicit drugs, dangerous toys, fake medicines, and other counterfeit goods shipped direct to American homes impacting the lives of our neighbors, friends, and families.”
“This proposed rule will help to give us some of the tools we need to address more of these threats,” Flores continued.
The Administration is also encouraging Congress to advance statutory reform to address the surge in de minimis imports that pose risks to American consumers, workers, retailers, and manufacturers.
For more information about the proposed changes and to discuss their impact on your business, please reach out to one of our trade professionals.