Accurate and reliable completeness checks for
inbound and outbound operations. Available as
single or multi-interval scales.
THE SMALLEST GAPS
BETWEEN WEIGHED PRODUCTS
EC;Warehouse
wipotec-ocs.com
shippers’ ability to manipulate shipments to
meet the “one order” criterion.
Some third-party logistics service providers (3PLs) have set up fulfillment centers in
Mexico and Canada that are “filled with
goods, waiting for e-commerce orders”
specifically to take advantage of the $800
threshold, Magnus said. One example is
XB Fulfillment, which says it offers “a legal
way to completely eliminate duties” under
Section 321.
In one example from the company’s
brochure, merchandise imported in container or pallet loads via air or ocean to
Los Angeles moves immediately in-bond
to XB’s warehouse in Tijuana, Mexico, and
thus is not subject to U.S. import duties.
When an e-commerce order is received
from a client, XB says, it ships the order
from Tijuana to meet the promised delivery times to the end consumer in the U.S.
According to the brochure, the shipment is
considered duty-free as long as each order
is sent to an individual buyer/consignee,
each consignee receives no more than one
shipment per day, each consignee receives a
separate commercial invoice, and the value
of each order does not exceed $800.
While such practices—akin to taking
advantage of a tax loophole—appear to
comply with the letter of the law, they may
also create problems. For instance, some
shipments may violate the rule that merchandise under a single order or contract
that is shipped in separate lots to avoid
duties does not qualify for de minimis.
These low-value orders often are consolidated and shipped in truckloads to
the United States. Currently, according to
Magnus, if a truck arrives in the U.S. from
Canada or Mexico and no shipment or
consignment on that truck is valued at over
$800, and the goods are not otherwise subject to other U.S. federal agencies’ requirements, then no advance notice is required
and the driver can simply present a paper
manifest to CBP at the border. (However,
if even one shipment on the truck is valued at over $800, then the carrier must
transmit the manifest electronically to CBP
at least one hour in advance of arrival.)
Additionally, if, according to the manifest,
every shipment on the truck meets the de
minimis criteria, then no formal entry is
required and no HTS numbers need appear
“de minimis dilemma.”
The new threshold made mil-
lions of additional shipments eli-
gible for the documentation and
duty exemptions, and therefore a
potential source of risk. The iden-
tity of the receiver is required, but
that of the buyer, which may dif-
fer from the receiver, is not. This
makes it harder for CBP to screen
importers for wrongdoing. Nor
is the Harmonized Tariff System
(HTS) commodity-identification
code required; a written description
is deemed sufficient.
The incomplete information con-
strains customs authorities’ ability
to collect trade data and to identi-
fy imports that violate intellectu-
al property law. Magnus pointed
out that other government agencies
relying on import data supplied
by CBP might not receive suffi-
cient information to carry out their
own assessments. However, CBP
and other federal agencies can still
require formal entries and inspec-
tions for certain imports, such as
those that are subject to quotas.
The updated regulation regarding
de minimis, popularly referred to as
“Section 321,” says that the exemption from duties, taxes, and most
customs-clearance formalities can
be claimed for articles “imported by
one person on one day” with a “fair
retail value in the country of shipment” of $800 or less. It also says
that merchandise covered by a single
order or contract that is shipped in
separate lots to avoid duties does
not qualify for de minimis. This
has been difficult to enforce, partly
due to ambiguity surrounding the
definition of “one person” and to
Str
at
e
gy
G
LO
BA
L
T
RAD
E
MANA
GE
M
EN
T
