Senator Blackburn and Ossoff’s De Minimis Bill is Seriously Flawed

The legislative landscape in Congress is a battleground of intentions versus outcomes, and the Detection and Exclusion of Negligent, Illicit, and Extralegal Deliveries Act (DENIED Act), introduced last week by Senators Marsha Blackburn and Jon Ossoff, is a case in point. While the bill’s title suggests a crackdown on the unfolding de minimis catastrophe, in reality it would handcuff CBP’s ability to do anything about it.

A press release from Senator Blackburn’s office claims the bill would “empower” U.S. Customs and Border Protection (CBP) to create a list of foreign companies “that repeatedly aid or facilitate the import of forced-labor products, counterfeit goods, or illegal drugs from leveraging the de minimis process”.

But CBP doesn’t need any empowering, statutorily. They already possess blanket authority to exclude bad actors from utilizing the de minimis loophole, as well as the broader “Informal Entry” framework in customs law of which de minimis is a part.

Informal Entry, per Section 498 of the Tariff Act of 1930, is generally available to shipments valued at $2,500 or less. For shipments valued at more than $2,500, “Formal Entry” processes are required.

Section 498 gives the Secretary of the Treasury broad powers to govern Informal Entry, whereas Formal Entry has more detailed requirements set by statute.

Informal Entry is a privilege, and per Treasury regulation, CBP can deny Informal Entry by requiring Formal Entry anytime. 19 CFR § 143.22 states: “CBP may require a formal consumption or appraisement entry for any merchandise if deemed necessary for import admissibility enforcement purposes; revenue protection; or the efficient conduct of customs business.”

In other words, CBP already has the statutory authority to deny de minimis treatment for any merchandise, even if only to promote “the efficient conduct of customs business.”

So, how does the DENIED Act “empower” CBP to deny de minimis treatment above its already blanket authority? It doesn’t—it does just the opposite.

Instead of empowering the agency, the bill complicates denying de minimis by layering CBP with additional due process requirements for the benefit of overseas vendors. CBP will now be required to maintain a “covered entity” list of random foreign “ACME Inc” shell companies. We know these will all be foreign entities, because in its definition of “covered entity”, the bill excludes carriers—typically the only ones listed on a manifest actually subject to U.S. jurisdiction.

The bill says CBP “shall include, for each such entity, a description of the violations of law that justify inclusion on the list.” That’s a lot of homework for an endless list of foreign shell companies for an agency that is already overwhelmed by more than three million de minimis shipments per day.

But the bill doesn’t stop there. It goes on to create an elaborate set of appeal rights for those overseas shell companies charged with fentanyl smuggling or other crimes. The bill says CBP “shall develop regulations establishing procedures under which a covered entity included on the list required by paragraph (2) may petition for removal from that list.”

And if the overseas vendor isn’t happy with CBP’s evidentiary record for putting them on the list, the bill gives them the right to challenge CBP’s decision in the U.S. Court of International Trade.

These requirements effectively cap the amount of enforcement actions CBP can take against any of  the millions of de minimis shipments arriving each day. 

The daily tidal wave of de minimis shipments are sent by tens of thousands of foreign companies. The resources required to exclude any one of those foreign companies are considerable. And to what end? It’s trivial for an overseas company to merely reincorporate as a new entity. Given that we’re talking about judgment-proof foreigners, there is no possibility of holding them accountable.

In fact,  Reuters investigative journalists were able to order fentanyl precursors shipped via FedEx from China to the USA via de minimis, even after the vendors had already been indicted by the U.S. Department of Justice!

Why would Senators Blackburn (R-TN) and Ossoff (D-GA) want to hamstring CBP by entangling it in red tape, thereby making it harder rather than easier to exclude bad actors? Most likely, they don’t want to, but were deceived into it. Misled by who? Well, perhaps it’s just a coincidence, but we note that FedEx and UPS are based in their respective states. As we have detailed, FedEx and UPS are major beneficiaries of de minimis lawlessness.

Legislators should remember this simple truth: there is no way to police millions of small packages arriving daily from overseas, judgment-proof vendors. If the offices spoke with CBP frontline staff, they would have heard it directly from the agency. It’s also what CBP has stated publicly.

The de minimis loophole must be closed. Nothing needs to be reinvented; small, low-value packages can continue to enter under the existing Informal Entry regulations that already apply to packages between $800 and $2,500. And the vast majority of merchandise entering via de minimis will return to orderly bulk imports through formal entry, where CBP actually has a shot of enforcing the law.