New Duty-Free Rules
If you haven’t heard much about the Trade Facilitation and Enforcement Act of 2015, you’re not alone. The bill was just passed by Congress, and while it didn’t get a lot of attention outside of Washington, the positive changes it brings are significant. The law will modernize and speed up the customs clearance process in the United States. We know how important efficient customs clearance is to our customers, so FedEx and others worked hard to help get this bill through Congress.
One of the biggest changes that everyone will benefit from is the increase in the de minimis level from $200 to $800. This means you can be anywhere in the United States and purchase items up to $800 from anywhere in the world duty-free.
Before this bill, tourists returning from international trips could carry back up to $800 of merchandise duty free. But if they shipped those exact same goods, only the first $200 was duty free. This bill fixes this anomaly. This amounts to a huge tax cut for the millions of Americans who shop online for products from Paris to Peru. Having the new duty-free threshold at $800, along with a simplified return process, will now make cross-border ecommerce cheaper, faster and more predictable.
This is just one part of a larger bill that simplifies the import process, which is good for American competitiveness. With today’s global supply chains, finished goods are seldom completely made in one country – they have parts and value added from many different global markets. Research has shown when a country improves its processing of imports, the biggest improvement is often in its own exports! So, you can see that in order to compete globally as a manufacturer, U.S. companies need rapid and reliable access to parts sourced around the world – and these new rules streamline that process.
Just to highlight two examples – the new bill advances the ACE (Automated Cargo Environment) program which moves the United States further towards a fully automated clearance procedure, and also supports the new Single Window clearance system, where importers can file only one set of import documents to receive clearance from multiple U.S agencies. These two changes will help bring customs clearance into the digital age and will have enormous benefits for everyone involved in international trade, especially small businesses.
In addition to facilitating trade, the bill also strengthens U.S. enforcement tools. The new rules include increased information sharing between customs and the owners of copyrighted and trademarked goods, and increased training of customs personnel to detect and stop intellectual property violations. It also strengthens mechanisms to prevent customs fraud and improve measures to ensure consumer safety for imported goods.
What’s clear is the new rules will go a long way in helping our customers take advantage of the enormous opportunities the global economy presents. By doing so, they’ll also help make the U.S. the most competitive economy in the world. For me, that’s a delivery worth celebrating.