Status of regulations: Excepting merchandise subject to Section 301 duties from “de minimis exemption”

Status of regulations

Proposed regulations concerning the “de minimis exemption” for Section 301 customs duties are still pending review by OMB’s Office of Information and Regulatory Affairs (OIRA).

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Regulations that are identified as “major” regulations are subject to review by OMB’s OIRA before being issued, pursuant to Executive Order 13771. Accordingly, knowing the status of OIRA review of regulations can help in predicting when regulations could be issued.

The proposed regulations were received for OIRA review in September 2020, and are identified as:

  • RIN: 1515-AE57: Excepting merchandise subject to Section 301 duties from the customs de minimis exemption

The proposed regulations are further described on the OIRA website as follows:

This notice of proposed rulemaking proposes to amend the U.S. Customs and Border Protection regulations to except merchandise subject to duties imposed under sections 301 to 307 of the Trade Act of 1974 from the administrative exemption from duties and taxes for certain articles imported by one person on one day.

Currently, goods valued at $800 or less, imported by one individual on one day, may be entered without paying customs duty. This is known as the “de minimis exemption.”  This exemption provides significant benefits to importers with a strong e-commerce profile, although there are certain restrictions around its use.

It is believed that the proposed rule would eliminate this exemption for any goods subject to Section 301 tariffs. The normal and trade remedy duties would apply, thereby substantially increasing costs.
 

For more information on this topic or to learn more about KPMG’s Trade & Customs Services, contact:

Doug Zuvich
Partner and Global Practice Leader
T: 312-665-1022
E: dzuvich@kpmg.com

John L. McLoughlin
Principal and East Coast Leader
T: 267-256-2614
E: jlmcloughlin@kpmg.com

Andy Siciliano
Partner and National Practice Leader
T: 631-425-6057
E: asiciliano@kpmg.com

Steve Brotherton
Principal and Global Export and Sanctions Leader
T: 415-963-7861
E: sbrotherton@kpmg.com

Luis (Lou) Abad
Principal, Washington National Tax
T: 212-954-3094
E: labad@kpmg.com

Irina Vaysfeld
Principal
T: 212-872-2973
E: ivaysfeld@kpmg.com

Amie Ahanchian
Principal
T: 202-533-3247
E: aahanchian@kpmg.com

Christopher Young
Principal
T: 312-665-3229
E: christopheryoung@kpmg.com

Gisele Belotto
Managing Director
T: 305-913-2779
E: gbelotto@kpmg.com

George Zaharatos
Principal
T: 404-222-3292
E: gzaharatos@kpmg.com

Andy Doornaert
Managing Director
T: 313-230-3080
E: adoornaert@kpmg.com

Jessica Libby
Managing Director
T: 612-305-5533
E: jlibby@kpmg.com

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