LOW VALUE IMPORT SHIPMENTS
INTO THE UNITED STATES
The United States Congress has signed the Trade Facilitation and Trade Enforcement Act of 2015 which includes a new customs law that increases the de minimis level from USD200.00 to USD800.00. This will take effect on 11 March 2016.
WHAT IS DE MINIMUS?
De minimus is defined by the ICC Customs Guideline #11 as "a valuation ceiling for good, including documents and trade samples, below which no duty or tax is charged and clearance procedures, including data requirements, are minimal". It exists where it is not economically viable to collect duty and tax, i.e. the administrative cost of collection outweighs the collection itself.
WHAT WILL CHANGE?
From 11 March 2016, the de minimus level for shipments imported into the US will rise from USD200.00 to USD800.00 (representing a 300% increase). It allows international shipments less than USD800.00 to be cleared at the border without attracting duty and taxes.
This may be of benefit to customers shipping low value goods to the US under a Business to Consumer (B2C) model. For example, a fashion designer in Melbourne may ship orders of designer label apparel to the US with an average order value of USD500.00. Under the changes, these shipments will now become ‘duty free’ and will be processed via a simplified, uniform clearance process.
Any company wanting to ship low value goods into the US should find this regulatory development of benefit to their business.
THE KEY BENEFITS:
* All customs entries below the USD800.00 level (except for special class goods) will be duty free;
* A simplified clearance process, resulting in a more efficient border clearance; and
* Uniformity of practices across ports of entry to facilitate timely resolution of trade compliance issues.