Customs Admits Yet Again That De Minimis is Loaded with Fake Goods, and Banned Goods

De minimis, a customs rule that allows for duty free shipment and minimal inspection if the overseas vendor claims the value is under $800, is a haven for contraband, whether it’s fake Nikes, childrens’ toys made of lead, or banned food products, Customs and Border Protect (CBP) admitted yet again.

From CBPs online magazine Frontlines on Oct. 23:

“We’ve encountered shipments that have been declared as footwear and jackets, but found smuggled beef, pork, and poultry animal products instead,” said Andrew Renna, Assistant Port Director for Cargo Operations at JFK Airport. “The products are prohibited in the United States because of the risk of foreign animal disease. Should an animal disease outbreak occur in the United States, it could have a significant impact on the U.S. economy.”  He said that as of October, CBP agents seized over 33,000 pounds of prohibited animal products that came into the country duty free via de minimis at JFK International Airport in New York City. Many of the countries where these shipments originated are known to have African swine fever, foot-and-mouth disease, and avian influenza or bird flu. “The beef, pork, and poultry industries are collectively worth over $200 billion annually in the U.S. and they support millions of jobs. So in just this one area, where de minimis is being exploited, it’s harmful to our domestic agriculture supply,” he said.

Sal Ingrassia, who as Port Director at JFK Airport oversaw about one-third of the de minimis shipments to the U.S., was quoted by International Trade Today saying that “One quarter of what we looked at had some type of violation,” and “It was alarming to see we had so many violations.” The reason this was so alarming is because he was referring specifically to de minimis shipments that entered through CBP’s voluntary “enhanced data” pilot known as Type 86 Entry.

This is the equivalent of finding that 1 out of 4 trucks in the secure “trusted trader” lane at the border were violating customs laws.

Worse yet, Ingrassia said that for another 25% of the packages, CBP asked the company to hold the package so CBP could inspect it, but when CBP got there, the package had already been released. This is the equivalent of another 1 of those 4 trucks simply running the border even after being waived over to secondary inspection by a border guard.

If this happened at a land border, the entire port would be shut down immediately until the situation was resolved.

Violations include misclassification of contents, insufficient documentation, or more serious violations, like smuggling narcotics and weapons to states where those weapons were not legal to purchase. Andrew Renna, assistant port director for JFK, said “de minimis keeps me awake at night.”

CPA chief economist Jeff Ferry estimated de minimis imports were valued at $128 billion in 2022. It must be even more today.

“Bad actors are exploiting the de minimis environment to move materials used to produce synthetic drugs — like fentanyl and its analogues — and other contraband into the United States,” CBP Acting Commissioner Troy Miller said on May 31.  Less than two months later, CBP officers at the Port of Louisville in Kentucky seized three shipments containing a total of 2,387 pieces of fake, luxury branded jewelry bearing the brand names Gucci and Van Cleef and Arpels, to name a few. If genuine, the items would have had a combined Manufacturer’s Suggested Retail Price (MSRP) of over $10.08 million.

A recent two-part Reuters investigation into de minimis highlighted the ways the trade rule is used to facilitate duty free shipment of narcotics and drug making tools into the U.S.  It’s complete lawlessness in the guise of facilitating America’s hyper passion for cheap consumer goods purchased online.  

The Coalition for a Prosperous America, together with other groups such as the National Sheriff’s Association, sent a letter to the House Ways & Means Committee in May about de minimis being used to import narcotics.

In January 2023, U.S. federal agents raided the home of a Tucson maintenance worker who had a side hustle hauling packages across the border to Mexico. They estimate that over the previous two years, the gray-bearded courier had ferried about 7,000 kilos of fentanyl-making chemicals to an operative of the Sinaloa Cartel. That’s 15,432 pounds, sufficient to produce 5.3 billion pills – enough to kill every living soul in the United States several times over. The chemicals had traveled by air from China to Los Angeles, were flown or ground-shipped to Tucson, then driven the last miles to Mexico by the freelance delivery driver. What fed this circuitous route – a 2016 trade law supported by major parcel carriers and e-commerce platforms that made it easier for imported goods, including those fentanyl ingredients, to enter the United States (duty free). Transporting goods is largely an honor system that’s easy for bad actors to exploit. Senders are supposed to tell the truth about what’s inside the boxes they export. But shipping documents are easy to falsify, and contraband fairly simple to camouflage. Authorities can’t inspect every box without bringing global commerce to a halt.