A senate bill aims to place US e-commerce imports under greater scrutiny to tackle shipments containing illegal and counterfeit products.
The bipartisan Fighting Illicit Goods, Helping Trustworthy Importers, and Netting Gains (FIGHTING) for America Act was proposed by five senators last week in response to the quadrupling of the number of e-commerce shipments from the likes of Shein and Temu over recent years.
They argue that the volume of e-commerce goods being imported into the US is making it harder for Customs and Border Protection (CBP) to monitor shipments.
The bill says the retailers are “abusing” the de minimis system that allows packages worth less than $800 to enter the country tariff free. It will need to pass both the Senate and House before it heads to the president to be signed off.
“As the volume of packages has increased, Customs and Border Protection (CBP) has struggled to effectively target shipments and keep out packages containing illicit drugs, counterfeits, products made with forced labour and other goods that violate US law,” the five senators said.
The bill would bar certain categories of products from being imported through de minimis, including: Goods designated as “import-sensitive” such as textiles, apparel and leather goods; goods subject to anti-dumping or countervailing duties; goods subject to tariffs imposed related to Section 301, Section 232, or Section 201 investigation; and other types of goods that CBP has identified as experiencing a surge in de minimis imports or presenting a persistent risk of illegal importation.
It would also require CBP to collect additional data on low-value shipments to better target unlawful imports; streamline procedures for CBP to seize and dispose of unlawful goods shipped through de minimis and increase penalties for violations of de minimis rules; plus establish a fee of $2 per shipment for the use of de minimis entry procedures.
US senator Ron Wyden said: “Foreign corporate giants are inundating our borders with millions of low-value packages, making it tough for customs agents to stop dangerous goods like fentanyl from falling into Americans’ hands.
“Americans should feel confident that anything arriving on their doorstep is safe, legal, and ethically produced. Our legislation would crack down on foreign companies abusing the law and make sure they play by the rules.”
The bill has gained the backing of labour union Oregon AFL-CIO, National Council of Textile Organizations (NCTO), Parents Against Vaping e-Cigs (PAVe), non-profit Voices for Awareness|Facing Fentanyl Now, National Association of Police Organizations, Fraternal Order of Police, United Steelworkers (USW), United States Footwear Manufacturers Association (USFMA), National Treasury Employees Union, and the Outdoor Industries Association.
Kim Glas, president of the National Council of Textile Organizations, said: “The bill is by far the most comprehensive legislative proposal to date that would impose new penalties for violations, require additional data reporting on all de minimis packages, and impose a small customs user fee on packages.
“We fully support the legislation as a strong step toward addressing this glaring loophole, which facilitates 4m packages a day that bypass federal scrutiny and enter the US duty free, and acts as a gateway for products made with forced labor, counterfeits, toxic products and illicit narcotics such as fentanyl.”
The US has been ramping up its focus on e-commerce shipments over the past year.
Earlier this year, CBP announced it had suspended “multiple customs brokers” from its Entry Type 86 Test programme that covers the duty-free import of shipments worth less than $800 into the US.
There have also been reports of greater scrutiny of Type 86 shipments causing hold-ups at borders and cancelled flights.
Lawmakers are becoming increasingly strident in their stance for a number of reasons, from concerns over drugs and contraband to anti-competitive ploys like splitting consignments and mis-declaring the value of goods.
There are several legal initiatives before the US Congress that seek to choke de minimis flows, not to mention regulatory moves to tackle this traffic from an angle of forced labour rules.
However, the volume of goods needing fast transport into the US has been a boon to the air cargo industry.
In a column for Air Cargo News, Brandon Fried of the US Airforwaders Association recently argued that the de minimis threshold has been instrumental in encouraging the seamless movement of goods into the US.
Since its increase in 2015 from $200 to $800, the de minimis threshold has significantly contributed to the e-commerce boom, allowing small businesses and consumers to engage more freely in global trade, he said.
This policy has enabled quicker and more cost-effective cross-border transactions, benefiting countless enterprises and customers.
“Maintaining the current de minimis threshold is essential for sustaining this growth. It simplifies the import process for low-value goods, reduces administrative burdens, and lowers costs for businesses and consumers,” he wrote.
“However, to ensure that incoming shipments meet value and declaration requirements, CBP needs adequate funding for enforcement staffing. This will help balance the benefits of the de minimis threshold with the need for effective oversight and compliance.”
Preserving the US de minimis threshold to foster global trade
E-commerce: Just what the air cargo market ordered
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