In January 2025, U.S. Customs and Border Protection (CBP) announced two Notices of Proposed Rulemaking (NPRM) related to low-value shipments, also known as de minimis shipments. The first announcement was the proposed Entry of Low-Value Shipments (ELVS) rule, which creates new processes and requires additional data elements to enhance supply chain visibility for CBP. The second was the proposed Trade and National Security Actions for Low-Value Shipments rule that limits duty exemptions for low-value shipments.
The De Minimis Threshold
CBP defines the de minimis threshold as “the value of a shipment of merchandise imported by one person on one day that generally may be imported free of duties and taxes.” The Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA) raised the de minimis value from $200 to $800.
The de minimis threshold was introduced to avoid administrative expense to the government disproportionate to the amount of revenue realized from inspecting low-value goods. The de minimis threshold was first enacted in 1938 at $5 and has been raised at various points since to continue to enable CBP to provide the public the benefits of duty-free shipments for qualified imports while protecting against illegitimate trade.
However, the rise of e-commerce in recent years has led to an unprecedented increase in low-value shipments under the de minimis threshold, presenting significant challenges to CBP’s ability to protect against illegitimate trade.
Challenges Posed by De Minimis Shipments
In 2015, shipments valued at $200 or less were approximately 134 million. In 2016, shipments valued at the new de minimis threshold of $800 or less were 220 million, a 65% increase. By 2022, de minimis shipments rose to 685 million, a 410% increase in just seven years.
According to CBP, de minimis shipments currently account for 92% of all cargo entering the US, with CBP processing approximately 4 million de minimis shipments per day. The key challenges this presents for CBP are:
- Risk Management: CBP utilizes advanced data to identify high risk shipments for inspection, enabling CBP to most efficiently use its resources and staff to target illegitimate cargo. However, de minimis have limited advanced data making CBP targeting capabilities limited.
- Staffing Limitations: At ports of entry that handle a large volume of de minimis shipments – such as JFK International Airport in New York which processes 25% of all de minimis shipments – there are not enough resources to inspect a significant percentage of these shipments.
- Illegitimate trade: Due to the factors above, de minimis shipments are more easily exploited by bad actors to traffic counterfeits, dangerous narcotics, and other illicit goods. For example, in Fiscal Year 2023, 85% of health and safety seizures by CBP were small packages.
Proposed Rules
The proposed Entry of Low Value Shipments (ELVS) rule, announced on January 13, primarily seeks to revise the process for entering de minimis shipments to require additional data elements and within specified time frames. This would enable CBP to more effectively target high-risk shipments and verify eligibility for duty- and tax-free entry. The main objective of this rule is to enhance supply chain visibility and enable CBP to better interdict illegal shipments into the US.
The proposed Trade and National Security Actions for Low-Value Shipments rule, announced on January 17, seeks to make merchandise that is subject to specified trade or national security actions ineligible for this administrative exemption and to require that certain shipments claiming this exemption provide the 10-digit Harmonized Tariff Schedule of the United States (HTSUS) classification of the merchandise. The main objective of this rule is to protect intellectual property rights, consumer health and safety protections, and close enforcement gaps while safeguarding American businesses and workers from unfair trade practices.
The proposed rules were developed based on the findings and evaluation of two pilots CBP began in 2019: the Section 321 Data Pilot and the Entry Type 86 Test.
- Section 321 Data Pilot: Through this voluntary pilot, CBP tested the utility of accepting advance data from e-commerce supply chain partners.
- Entry Type 86 Test: Through this pilot, CBP tested revising the commercial entry process through the introduction of an “Entry Type 86” for customs brokers and self-filers.
Rule Making Process
During the rulemaking process for federal agencies, members of the public have 60 days to comment on the proposed rule once it is published on the Federal e-Rulemaking Portal. Both of CBP’s proposed rules are currently open for public comment. Public comments for the proposed rules must be received by the following dates:
- ELVS: March 17, 2025
- Trade and National Security Actions: March 24, 2025
