The International Trade Council (ITC) has noted the U.S. Customs and Border Protection's (CBP) decision to prioritize enforcement measures on Type 86 entries. The shift comes in response to the escalating usage of this relatively new entry type for de minimis shipments and the corresponding rise in related violations.
According to CBP's James Moore, speaking at an April 5 webinar hosted by the agency, the recent surge in Type 86 entries has been accompanied by numerous violations, including misclassification, undervaluation, and mismanifesting. "We've encountered a broad range of issues from silencers to pharmaceuticals, and numerous agricultural violations," Moore explained.
Since the introduction of Type 86 entries in September 2019, they have risen to account for a significant proportion of import filings, shared Christine Hogue, CBP's e-commerce branch chief. In 2022, de minimis shipments constituted about 85% of total import transactions, and Type 86 entries represented 43% of all de minimis shipments.
Given the high number of Type 86 entries, a corresponding increase in violations has also been observed. "We're detecting a myriad of violations across several categories, not just our high-risk items," Moore added.
The ITC acknowledges the ongoing challenges CBP faces in managing data quality for de minimis shipments. The agency plans to address these issues with a forthcoming proposed rule, informed by lessons learned from both the Type 86 pilot and a concurrent pilot on Section 321 data.
The proposed rule is set to address trade liability for data on de minimis shipments, with some provisions focusing on a reasonable care standard, while others will consider a "reasonable reliance" standard. The Type 86 pilot will continue until the rule is finalized and implemented, after which the pilot will be phased out.
The ITC commends CBP's proactive approach to monitoring and improving compliance in trade. The Council remains committed to working with all stakeholders to facilitate fair and effective trade practices.