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Limited Enforcement Begins for Advance E-Manifest Requirement for De Minimis Shipments by Truck

January 9, 2019

As of Jan. 1 U.S. Customs and Border Protection began enforcing the requirement for carriers to file an advance electronic manifest for Section 321 goods (those valued below the de minimis level of $800) transported by commercial trucks. As a result, carriers that make no attempt to comply with this requirement can now be issued a monetary penalty in the amount of $5,000 for the first offense and $10,000 for subsequent offenses.

However, CBP states, truck carriers transporting more than 5,000 shipments of Section 321 goods are currently unable to file an electronic manifest due to technical restrictions within the Automated Commercial Environment. As a result, CBP will not pursue any penalty action against such carriers who are unable to file due to those restrictions. CBP notes that a technical correction within ACE should be in place by April 1. (Enforcement action may be pursued for truck carriers with 5,000 or fewer shipments of Section 321 goods if the manifest is not submitted electronically.)

The shift to enforcement is particularly important for companies distributing e-commerce shipments from Canada or Mexico. According to CBP, these and other shipments qualifying for Section 321 release had been exempt from the e-manifest filing requirement due to a policy decision made during the implementation of the Trade Act of 2002. However, the rise in e-commerce and the increase in the de minimis value in the U.S. have resulted in a significant growth in shipments being manifested and released under Section 321. CBP has said that the lack of an e-manifest for such shipments prevents it from conducting risk assessments or performing advance targeting, resulting in slower processing times and longer wait times.

In addition, enforcement of this change along the U.S.-Mexico border could potentially pose problems. Most trucking companies along this border rely on a U.S. or Mexican broker to file their manifests but that if the broker does not file electronically it will be the trucker, not the broker, that will be penalized. Given that many of these trucking companies are small, one $5,000 penalty could put them out of business, and the threat of such a penalty could prompt them to cease border-crossing services. In either case the end result could be a decrease in truck capacity along the southern border, which could make it more challenging for importers to arrange transportation for their goods.

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