How CBP’s ELVS Rule Impacts Your Business

On Monday, CBP announced the release of a Notice of Proposed Rulemaking called the Entry of Low-Value Shipments (ELVS). The ELVS rule will boost CBP’s ability to intercept illegal packages that fall into the so-called ‘de minimis loophole’, a loophole that has historically allowed packages valued at less than $800 USD to circumvent enhanced customs scrutiny and avoid detentions under the US Forced Labor Prevention Act. According to CBP, more than 4 million de minimis packages enter the country daily, and current information requirements allow importers to provide minimal data on these shipments compared to mandated data requirements for non-deminimis cargo. This loophole allows issues such as forced labor, counterfeiting, and other illegal practices that may impact the products inside these packages to go largely unchecked.

The ELVS rule will create a fully electronic process for importers to file entry data before a shipment’s arrival at a U.S. port of entry or border, easing the burden on CBP officers who are processing the cargo. It will allow them to better target potential problem shipments and focus on accurately identifying and halting those that violate the law.

Late last year, the Biden-Harris administration announced their intent to address the de minimis loophole and have been rushing to accomplish this in the waning days of the administration. According to CBP, “The proposed rule is part of a larger effort to address vulnerabilities and prevent bad actors from exploiting this growing segment of international trade to smuggle dangerous goods into the United States. It will allow CBP to target high-risk shipments more effectively, including those containing counterfeit goods, synthetic opioids such as fentanyl, or the precursors and pill press parts used to make that deadly drug. Additionally, it will revise the current process for entering low-value shipments to require additional data elements that would assist CBP in verifying eligibility for duty- and tax-free entry by creating a fully electronic process for filers to transmit entry data prior to a shipment’s arrival. This data will reduce the burden for CBP officers who process these large volumes of shipments, leading to more accurate targeting. As a result, CBP resources will be better focused on accurately identifying and interdicting violative shipments.”

What does this mean for your business?

The U.S. is taking substantial steps to close the de minimis loophole and increase due diligence requirements for low-value shipments. Certain business structures, such as direct-to-consumer businesses, will be particularly impacted by this change and will need to adopt strict due diligence practices to meet the existing standard established by the US Forced Labor Prevention Act.

Luckily, there are tried and true methods to ensure compliance with strict forced labor due diligence requirements, built to meet CBP’s standards. Sourcemap’s tools ensure you stay compliant, protect your brand, and build a resilient, ethical supply chain. We offer a comprehensive suite of solutions to help you navigate forced labor regulations and safeguard your supply chain:

Supply chain mapping and supplier discovery: Gain visibility into every supplier in your network, from raw materials to finished goods.
Supplier Watchlist Monitoring: Stay ahead of risks with real-time alerts on suppliers flagged for forced labor violations or risks.
Chain of custody document collection: Simplify the documentation process with secure, centralized storage of records for every purchase order.
Mock detention workflows: Prepare for inspections and detentions by testing your documentation readiness.
On-demand reporting: Generate the necessary reports instantly to satisfy customs and regulatory inquiries.