Customs Ruling to Boost Ability to Identify Counterfeit Shipments

Date: Wednesday, August 5, 2020
Source: The Wall Street Journal

Customs Ruling to Boost Ability to Identify Counterfeit Shipments

WASHINGTON—U.S. Customs officials plan to issue a ruling Monday intended to give border agents more transparency about the origin of imports destined for U.S. warehouses, improving their ability to police shipments for counterfeits and other illegal goods.

With the ruling, Customs and Border Protection aims to clarify what information some shippers must include about shipments valued at less than $800 that are heading to U.S. fulfillment centers and warehouses. Congress set that monetary threshold in 2016 as the amount at which goods can pass into the U.S. tax-free and with minimal documentation.

That law, which eased the flow of global e-commerce for retailers and consumers, also limited the amount of information shippers provided to Customs agents monitoring incoming goods for trademark violations, consumer-safety violations and other illegal behavior.

Monday’s ruling will require some shippers in the U.S. who want to import shipments under the $800 threshold to provide information about the foreign seller before the goods can enter the U.S. and continue to a warehouse to await a U.S. buyer. The additional details could help Customs officials better enforce anticounterfeiting and other rules, officials say.

Since the law was passed, Brenda Smith, executive assistant commissioner of the Customs agency’s Office of Trade, said she has seen an explosion in the number of low-value packages coming into the U.S. under the tax-free rule. Some foreign shippers using that process don’t understand the rules or ignore them to save costs, she told The Wall Street Journal.

Direct-to-consumer shipments from China under the $800 threshold also got a boost after President Trump imposed tariffs on Chinese-made goods as part of the trade war with the rival economic superpower.

The higher tariffs gave an edge to Chinese merchants who ship directly to consumers in the U.S., bypassing U.S. retailers who often mark up merchandise to pass the cost of new tariffs on to the consumer.

As e-commerce has expanded in recent years, counterfeit goods have spread from street-corner sales and flea markets to some of the largest online retailers in the world, a growth fueled by consumers’ desire for low-price foreign goods and cheap shipping. In April 2019, Mr. Trump ordered federal officials to take a closer look at counterfeit goods, which he said threaten public safety and hurt U.S. economic competitiveness.

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