Buyer Beware: Bad Actors Exploit De Minimis Shipments

What the American public needs to know and how CBP is tackling the problem

Read the full article on the US Customs and Border Protection website.

Contrary to popular belief, good things do not always come in small packages. In fiscal year 2023, 85% of the shipments U.S. Customs and Border Protection seized for health and safety violations were small packages. The packages contained dangerous materials that could cause serious harm to American consumers and the U.S. economy. Propelled by online shopping, duty-free de minimis shipmentsโ€”packages with an aggregate value of $800 or lessโ€”are skyrocketing and putting consumers at risk.

Currently, de minimis shipments account for 92% of all cargo entering the U.S. and that figure is growing in epic proportions. CBP processes approximately 4 million de minimis shipments a day, up from 2.8 million last year. Bad actors are exploiting this explosion in volume to traffic counterfeits, dangerous narcotics, and other illicit goods including precursor chemicals and materials such as pill presses and die molds used to manufacture fentanyl and other synthetic drugs that are killing Americans.

The majority of the more than 1 billion de minimis shipments CBP processed last year were in the air environment. Roughly 800 million, or 88%, of these shipments arrived through international mail; express courier services such as UPS, DHL, and FedEx; or were transported as cargo on commercial airline flights. At John F. Kennedy International Airport in New York where 25% of all de minimis shipments are processed, the volume is staggering. โ€œOn any given day, we could receive and process 750,000 to a million de minimis shipments,โ€ said Andrew Renna, Assistant Port Director for Cargo Operations at JFK Airport. Along with four express courier facilities, the airport houses the countryโ€™s largest by volume international mail facility where 60% of international mail arrives in the U.S. โ€œWe have limited resources,โ€ said Renna. โ€œWe only have X number of staff. There is no physical way if I doubled or even tripled my staffing that I could look at a significant percentage of that. So due to the volume, itโ€™s a very exploitable mode of entry into the U.S.โ€

De minimis shipments account for 92% of all cargo entering the U.S. Above, CBP officers are offloading de minimis shipments from a plane at Los Angeles International Airport. Photo by Ya-Huei Laura Lee

โ€œDe minimis,โ€ a Latin expression that means trivial or so minor that something can be disregarded, is anything but in the trade realm. Bad actors employ a number of techniques to smuggle items or evade paying duties. Undervaluation of goods, misclassification of merchandise, inaccurate or vague cargo descriptions, and describing products as something innocuous when, in fact, theyโ€™re harmful are just a few of the tactics. 

โ€œWeโ€™ve encountered shipments that have been declared as footwear and jackets, but found smuggled beef, pork, and poultry animal products instead,โ€ said Renna. โ€œThe products are prohibited in the United States because of the risk of foreign animal disease. Should an animal disease outbreak occur in the United States, it could have significant impact on the U.S. economy and the world economy. Any disruption to the food supply chain causes economic harm,โ€ said Renna. โ€œJust this year so far at JFK, we have seized over 33,000 pounds of prohibited animal products in the de minimis environment. Many of the countries that weโ€™ve seized this from are affected by African swine fever, foot-and-mouth disease, and avian influenza or bird flu. The beef, pork, and poultry industries are collectively worth over $200 billion annually in the U.S. and they support millions of jobs. So in just this one area, where de minimis is being exploited, itโ€™s harmful to our domestic agriculture supply.โ€

Article continues on the US Border Protection website.

Senate Lawmakers Issue โ€˜Urgent Request’ to President Biden to Close De Minimis โ€˜Loophole’

Two U.S. senators penned an “urgent request” to President Joe Biden this weekend, pushing for the use of executive authority to end the de minimis trade “loophole.”

Sen. Sherrod Brown (D-Oh.) and Sen. Rick Scott (R-Fl.) on Saturday sent an open letter to the president asking him to end duty-free treatment for e-commerce shipments worth under $800-an exemption created by Section 321 of the Tariff Act.

According to the lawmakers, the rule is being exploited to facilitate “the import of illegal products, goods produced with forced labor, and other contraband to the detriment of U.S. manufacturers, workers and communities.” De minimis doesn’t just provide foreign shippers with financial benefits, they argued-it also allows bad actors to circumvent customs enforcement, as individual packages of lower value often enter the country “with minimal to zero inspections.”

The legislators said that Chinese goods made with forced labor “appear to be the heaviest users of de minimis, undermining enforcement of the Uyghur Forced Labor Prevention Act (UFLPA).” About 3 million parcels enter the country each day using the de minimis rule, and they pose an “elevated risk” of being made withย forced labor, containing counterfeit products or contributing to the fentanyl crisis, as drugs have been smuggled in small, low-value shipments.

Continue reading “Senate Lawmakers Issue โ€˜Urgent Request’ to President Biden to Close De Minimis โ€˜Loophole’”
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