Prior to the pandemic, Customs and Border Protection (CBP) made it public that they were focusing their efforts on getting more data on counterfeit and prohibited goods that have been entering the US through small parcel importing. In addition with the context of COVID-19, they will also be looking into suspicious medical supplies as well. 

As the dust settles on pandemic re-routing efforts, CBP is turning their lens back into collecting data on small package imports (and including additional resources for identifying sub-standard medical supplies). 

In August 2020, CBP issued a ruling that clarified various duty-free exemptions for low-value shipments. By definition, this will apply to shipments valued at $800 and under – being moved into US fulfillment centers and/or warehouses. 

The announcement was framed as such: CBP Enhances Accountability in E-Commerce through Ruling on Duty Exemptions for Low Value Shipments.

What did these efforts look like prior to COVID-19? 

Prior to COVID-19’s impact on these efforts, CBP was already working on getting more information on small shipments and how they relate to counterfeit goods. In a January announcement of a pilot program with e-Commerce giants Amazon, Ebay, Zulily, Fedex, DHL, UPS, etc. CBP announced that it was processing over 600 million express and international mail shipments a year. 

In this program, they use technology to grow the volume of small shipments that e-Commerce is accelerating, but with more accountability and data.

What does this CBP ruling mean? 

The goal of this ruling is to identify if there are counterfeit/prohibited goods moving into the US from foreign importers/suppliers. This ruling will adjust Section 321 shipping regulations. In which the “one person, one day” shipments of $800 or less will allow fulfillment centers and warehouses in the US to get low-shipment value duty exemptions in exchange for the shipper’s information on the shipment.

In an article on the topic, The Business of Federal Technology senior staff writer Mark Rockwell explains:

Before the COVID-19 pandemic accelerated the import of fake and sub-standard medical supplies, CBP had already been working to get more data on incoming smaller shipments of counterfeit goods.

Why make this ruling now?

It has been noted that small package imports have become a method for suppliers to move counterfeit, prohibited, or sub-standard goods into the US — exacerbated by COVID-19 and the movement of sub-standard medical supplies. 

In fact, since the pandemic began, CBP has seized “over 10 million counterfeit masks, more than 120,000 unapproved COVID-19 test kits, and thousands of other questionable goods coming into the U.S.” In turn, curbing the risk of endangering Americans and worsening the impacts of the pandemic in the country.

In a release about the ruling, CBP Acting Commissioner Mark A. Morgan stated: 

The exponential growth of e-commerce has provided illicit sellers with an extraordinary opportunity to evade duties and sell unsafe and unregulated products to U.S. consumers, particularly through fulfillment centers. As the nation’s largest law enforcement agency, CBP will not sit idly by and allow these bad actors to evade duties, report false values, and harm American businesses and consumers.

Ultimately, this ruling will help CBP preserve America’s economic security, which is inseparable from our national security. The dedicated men and women of CBP will continue to hold foreign trade partners accountable and ensure that they comply with federal laws designed to protect Americans and our economy.

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If you would like to learn more about how this ruling may affect your operations as an importer, contact a customs broker here!