Understanding the Customs Minimis Rule
As the United States considers tightening its trade policies, particularly in light of recent statements by Donald Trump advocating the reintroduction of stricter customs barriers, the issue of the de minimis rule is once again taking center stage. However, it is increasingly sparking debate over its impact on competition, taxation, and the potential for abuse in a context of exponential e-commerce growth.
The de minimis rule is a customs provision that exempts low-value international shipments from duties and taxes. Each national or regional customs authority sets a specific threshold below which imported goods are not subject to taxation or burdensome administrative procedures. This measure facilitates trade, particularly for small-scale transactions.
This rule primarily addresses economic and operational concerns. First, it aims to reduce administrative costs, as it is often more expensive for authorities to process tax formalities on low-value shipments than to waive the taxes altogether. Second, it helps accelerate and simplify the customs clearance process, promoting smoother international trade, especially in the context of e-commerce.
The de minimis threshold varies from country to country or region to region. In the European Union, goods are exempt from duties up to a value of €150, though exceptions apply to certain excise goods such as alcohol and tobacco. In the United States, the threshold, set by Section 321 of the Tariff Act, is $800 USD per day per person, significantly facilitating low-value cross-border trade. Canada, for its part, applies variable thresholds that typically start at $20 CAD, but can go up to $150 CAD under specific circumstances.
In practice, the implementation of this rule relies on simplified procedures specific to each territory. For example, within the European Union, the so-called “H7” declaration allows companies to carry out simplified and expedited customs clearance for eligible shipments. In the United States, the equivalent procedure is known as “Entry Type 86.”. National customs authorities provide detailed guidelines to help businesses correctly apply these procedures.
Several key players are involved in the establishment and implementation of the de minimis rule. The World Customs Organization (WCO) sets international standards through the Revised Kyoto Convention. The World Trade Organization (WTO) actively promotes this practice under the Trade Facilitation Agreement. Ultimately, it is the national and regional customs authorities that define the specific thresholds and oversee the operational procedures.
However, despite its many advantages, the de minimis rule requires certain precautions to prevent abuses such as the artificial splitting of shipments or fraud through under-valuation of goods. Customs authorities must therefore maintain constant vigilance and ensure effective monitoring to mitigate these risks.
In conclusion, the de minimis rule is essential for simplifying and streamlining international trade, offering significant benefits for small and medium-sized enterprises as well as for e-commerce. However, its effectiveness depends on a clear understanding of its limitations and the rigorous management of specific procedures in each country concerned.
