In 2011, U.S. Customs & Border Protection (CBP) proposed an increase in the informal entry limit from $2,000 to $2,500. The current $2,000 limit was established in 1998, but due to inflation, the real value today is less and leads to an administrative burden on importers. Once the changes are adapted, only products covered by certain temporary modifications or agricultural products subject to a safeguard measure will be excluded from the normal informal entry limit.
Most importantly the CBP proposal will eliminate the prohibition from using informal entry for textile and apparel shipments. This is a substantial improvement for companies that import textile and apparel products.
In a Federal Register Notice published on October 28, 2011, CBP requested comments on the proposed increase:
Section 662 of the Customs Modernization provisions of the North American Free Trade Agreement Implementation Act raised the statutory limit by which the Secretary of the Treasury is authorized to prescribe rules and regulations for the declaration and entry of, among other things, importer merchandise when the aggregate value of the shipment does not exceed an amount specified but not greater than $2,500. The current limit of $2000 was established in 1998 and while that dollar amount has been unchanged, inflation over the intervening years has reduced the value of that amount in real terms. Consequently, CBP proposes to raise the current informal entry amount to its maximum statutory limit in response to inflation that has occurred and thereby to reduce the administrative burden on importers and other entry filers. Moreover, CBP proposes to remove the language requiring formal entry for certain articles, because with the elimination of absolute quotas under the Agreement on Textiles and Clothing, CBP no longer needs to require formal entries for these articles. This document also makes non-substantive editorial and nomenclature changes.
The United States Fashion Industry Association (USFIA), formerly the United States Association of Importers of Textiles & Apparel (USA-ITA), continues to actively work to eliminate any “special” protection for textile and apparel products. USA-ITA asked U.S. Customs and Border Protection (CBP) to eliminate the restriction on the use of “informal entry” for textile and apparel products in 2005 when the World Trade Organization (WTO) quota system was eliminated, and in 2009, when the China textile safeguards expired. We strongly support action by CBP to facilitate trade and eliminate unnecessary barriers.
On December 19, 2011, USA-ITA (now USFIA) submitted comments to CBP in favor of the proposed change. In the comments, USA-ITA President Julia K. Hughes said,
CBP proposes to increase the informal entry limit to $2,500 and, more importantly, to eliminate the current restrictions on the use of the informal entry procedure.
At present, the informal entry limit for textiles and apparel is $250. This different treatment was justified because of the comprehensive absolute quota system that applied to that class of merchandise. The quota system has been dismantled for some time and there is no longer a justification for requiring formal entry for textile and apparel shipments valued at less than the normal informal entry limit.
The proposed changes will result in modest savings in Merchandise Processing Fees and a decrease in processing times for smaller shipments. USA-ITA anticipates that the changes will permit textile and apparel import specialist teams to concentrate on higher level enforcement priorities by eliminating the requirement to process the lower value shipments.
USA-ITA and its members strongly support the proposed changes. Indeed, they have long urged that the changes be made.
For more information on CBP’s efforts to simplify the entry process, read this article from the October 2011 OFF THE CUFF member newsletter by Mary Jo Muoio, Senior Vice President at OHL Trade Services.