6852 Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Proposed Rules 

72 5 U.S.C. 601–612. 

73 13 CFR 121.101. 

74 13 CFR 121.201, Subsector 221 (Utilities). 

75Many respondents serve multiple roles in the 

NERC Compliance Registry, so there is likely 

double counting in the estimates. 

VI. Regulatory Flexibility Act 

Certification 

42. The Regulatory Flexibility Act of 

1980 (RFA) 72 generally requires a 

description and analysis of proposed 

rules that will have significant 

economic impact on a substantial 

number of small entities. The Small 

Business Administration’s (SBA) Office 

of Size Standards develops the 

numerical definition of a small 

business.73 The SBA revised its size 

standard for electric utilities (effective 

March 17, 2023) to a standard based on 

the number of employees, including 

affiliates (from the prior standard based 

on megawatt hour sales).74

43. Proposed Reliability Standard 

PRC–024–4 (included in FERC–725G) 

will apply to approximately 1,230 

generator owners and proposed 

Reliability Standard PRC–029–1 

(included in FERC–725G) will apply to 

approximately 1,346 BES/IBR combined 

generator owners and non-generator 

owners in the United States.75 Pursuant 

to SBA regulations, the employment 

threshold for generator owners is 950 

employees. We estimate that the 

percentage of employees that are 

considered small to be 74.59% based on 

the North American Industry 

Classification System 221121 code 

(Electric Bulk Power Generation) and 

that the annual cost for each entity will 

be $1,413.40 for each generator owner 

and $2,826.80 for each BES IBR 

generator owner and $5,653.60 for each 

Non-BES IBR generator owner. 

44. We view this as a minimal 

economic impact for each entity. 

Accordingly, we certify that the 

proposed Reliability Standards PRC– 

024–4 and PRC–029–1 will not have a 

significant economic impact on a 

substantial number of small entities. 

Thus, no regulatory flexibility analysis 

is required. 

VII. Comment Procedures 

45. The Commission invites interested 

persons to submit comments on the 

matters and issues proposed in this 

notice to be adopted, including any 

related matters or alternative proposals 

that commenters may wish to discuss. 

Comments are due March 24, 2025. 

Comments must refer to Docket No. 

RM25–3–000, and must include the 

commenter’s name, the organization 

they represent, if applicable, and their 

address in their comments. All 

comments will be placed in the 

Commission’s public files and may be 

viewed, printed, or downloaded 

remotely as described in the Document 

Availability section below. Commenters 

on this proposal are not required to 

serve copies of their comments on other 

commenters. 

46. The Commission encourages 

comments to be filed electronically via 

the eFiling link on the Commission’s 

website at http://www.ferc.gov. The 

Commission accepts most standard 

word processing formats. Documents 

created electronically using word 

processing software must be filed in 

native applications or print-to-PDF 

format and not in a scanned format. 

Commenters filing electronically do not 

need to make a paper filing. 

47. Commenters that are not able to 

file comments electronically may file an 

original of their comment by USPS mail 

or by courier-or other delivery services. 

For submission sent via USPS only, 

filings should be mailed to: Federal 

Energy Regulatory Commission, Office 

of the Secretary, 888 First Street NE, 

Washington, DC 20426. Submission of 

filings other than by USPS should be 

delivered to: Federal Energy Regulatory 

Commission, 12225 Wilkins Avenue, 

Rockville, MD 20852. 

VIII. Document Availability 

48. In addition to publishing the full 

text of this document in the Federal 

Register, the Commission provides all 

interested persons an opportunity to 

view and/or print the contents of this 

document via the internet through the 

Commission’s Home Page (http://

www.ferc.gov). 

49. From the Commission’s Home 

Page on the internet, this information is 

available on eLibrary. The full text of 

this document is available on eLibrary 

in PDF and Microsoft Word format for 

viewing, printing, and/or downloading. 

To access this document in eLibrary, 

type the docket number excluding the 

last three digits of this document in the 

docket number field. 

50. User assistance is available for 

eLibrary and the Commission’s website 

during normal business hours from 

FERC Online Support at (202) 502–6652 

(toll free at 1–866–208–3676) or email at 

ferconlinesupport@ferc.gov, or the 

Public Reference Room at (202) 502– 

8371, TTY (202) 502–8659. Email the 

Public Reference Room at 

public.referenceroom@ferc.gov. 

By direction of the Commission. 

Issued: December 19, 2024. 

Debbie-Anne A. Reese, 

Secretary. 

[FR Doc. 2025–00263 Filed 1–17–25; 8:45 am] 

BILLING CODE 6717–01–P 

DEPARTMENT OF HOMELAND 

SECURITY 

U.S. Customs and Border Protection 

DEPARTMENT OF THE TREASURY 

19 CFR Parts 10, 128, 143 

[USCBP–2025–0003] 

RIN 1685–AA02 

Trade and National Security Actions 

and Low-Value Shipments 

AGENCY: U.S. Customs and Border 

Protection, Department of Homeland 

Security; Department of the Treasury. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: This document proposes 

amendments to the U.S. Customs and 

Border Protection (CBP) regulations 

pertaining to the administrative 

exemption for certain low-value 

shipments not exceeding $800. 

Specifically, CBP proposes to make 

merchandise that is subject to specified 

trade or national security actions 

ineligible for this administrative 

exemption and to require that certain 

shipments claiming this exemption 

provide the 10-digit Harmonized Tariff 

Schedule of the United States (HTSUS) 

classification of the merchandise. 

DATES: Comments must be received by 

March 24, 2025. 

ADDRESSES: Please submit comments, 

identified by docket number, by the 

following method: 

• Federal eRulemaking Portal: 

https://www.regulations.gov. Follow the 

instructions for submitting comments 

via docket number USCBP–2025–0003. 

Instructions: All submissions received 

must include the agency name and 

docket number for this rulemaking. All 

comments received will be posted 

without change to https://

www.regulations.gov, including any 

personal information provided. 

Comments must be submitted in 

English, or an English translation must 

be provided. 

Docket: For access to the docket to 

read background documents or 

comments received, go to https://

www.regulations.gov. In accordance 

with 5 U.S.C. 553(b)(4), a summary of 

this rule may also be found at https:// 

www.regulations.gov. 


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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Proposed Rules 6853 

1 19 U.S.C. 1321(a)(2). Shipments entered under 

this exemption are also commonly referred to as 

‘‘de minimis’’ shipments. 

2 In accordance with Treasury Order 100–20, the 

Secretary of the Treasury delegated to the Secretary 

of Homeland Security the authority related to the 

customs revenue functions vested in the Secretary 

of the Treasury as set forth in 6 U.S.C. 212 and 215, 

subject to certain exceptions. 

FOR FURTHER INFORMATION CONTACT: 

Christopher Mabelitini, Director, 

Intellectual Property Rights & ECommerce Division, Office of Trade, 

U.S. Customs and Border Protection, 

202–325–6915, ecommerce@

cbp.dhs.gov. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Public Participation 

II. Background and Purpose 

A. Administrative Exemption From Duties 

and Taxes 

B. Specified Trade and National Security 

Actions 

C. Excepting Merchandise Subject to 

Specified Trade or National Security 

Actions From Eligibility for the 

Administrative Exemption 

D. Unique Considerations for Applicability 

to the International Mail Shipments 

III. Discussion of Proposed Amendments 

IV. Statutory and Regulatory Reviews 

A. Executive Orders 12866 and 13563 

B. Additional Requirements for Regulatory 

Analysis 

C. Regulatory Flexibility Act 

D. Initial Regulatory Flexibility Analysis 

(IRFA) 

E. Paperwork Reduction Act 

F. National Environmental Policy Act 

Signing Authority 

List of Subjects 

Proposed Amendments to the CBP 

Regulations 

I. Public Participation 

Interested persons are invited to 

participate in this rulemaking by 

submitting written data, views, or 

arguments on all aspects of this notice 

of proposed rulemaking (NPRM). U.S. 

Customs and Border Protection (CBP) 

also invites comments that relate to the 

economic, environmental, or federalism 

effects that might result from this 

proposed rule. Comments that will 

provide the most assistance to CBP will 

reference a specific portion of the 

NPRM, explain the reason for any 

recommended change, and include data, 

information, argument, or authority that 

supports such recommended change. 

Regulatory Alternatives 

This rulemaking proposes to make 

imported merchandise subject to certain 

trade or national security actions 

ineligible for the administrative 

exemption found in 19 U.S.C. 

1321(a)(2)(C) and to require that certain 

shipments claiming this exemption 

provide the 10-digit Harmonized Tariff 

Schedule of the United States (HTSUS) 

classification of the merchandise. 

However, in addition to comments on 

the above proposals, CBP is also 

requesting comments on whether these 

proposals should be extended to bonafide gifts valued at $100 or less ($200, 

if the gift is from certain island 

possessions) sent from persons in 

foreign countries to persons in the 

United States and/or certain personal or 

household articles valued at $200 or less 

accompanying persons arriving in the 

United States pursuant to 19 U.S.C. 

1321(a)(2)(A) and 19 U.S.C. 

1321(a)(2)(B). 

Moreover, given the unique nature of 

the international mail shipments in the 

postal environment as set forth in 

Section II.D below, CBP is specifically 

seeking public comments as to the 

effects of this proposed rulemaking on 

those shipments into the United States. 

II. Background and Purpose 

A. Administrative Exemption From 

Duties and Taxes 

Section 321(a)(2) of the Tariff Act of 

1930 (19 U.S.C. 1321(a)(2)), as amended 

by the Trade Facilitation and Trade 

Enforcement Act of 2015 (TFTEA), 

Section 901, Public Law 114–125, 130 

Stat. 122 (Section 321), authorizes 

administrative exemptions from duty 

and tax imposed on or by reason of 

importation for three categories of 

imported articles, when the amount of 

revenue to be collected is 

disproportionate to the expense and 

inconvenience caused to the 

government. These categories include: 

bona-fide gifts valued at $100 or less 

($200, if the gift is from certain island 

possessions) sent from persons in 

foreign countries to persons in the 

United States; certain personal or 

household articles valued at $200 or less 

accompanying persons arriving in the 

United States; and other imported 

articles when the value of the article is 

$800 or less.1 These exemptions are 

subject to the condition that the 

aggregate fair retail value in the country 

of shipment of articles imported by one 

person on one day and exempted from 

duty cannot exceed the authorized 

amounts. Also, these exemptions are not 

to be granted if merchandise covered by 

a single order or contract is forwarded 

in separate lots to obtain the benefit of 

duty- and tax-free entry. Finally, these 

exemptions are also not to be granted in 

circumstances where regulations 

prescribe exceptions or limitations on 

eligibility for these exemptions. 

Pursuant to Section 321(b), such 

regulations may be prescribed whenever 

such action is consistent with the 

purpose of Section 321(a), or, when 

‘‘necessary for any reason to protect the 

revenue or to prevent unlawful 

importations.’’ All further references to 

‘‘the administrative exemption’’ in this 

document will be to the administrative 

exemption found in 19 U.S.C. 

1321(a)(2)(C), unless specified 

otherwise. 

All merchandise imported into the 

customs territory of the United States is 

subject to entry and clearance 

procedures, unless specifically 

excepted. These procedures ensure the 

proper appraisement, valuation, and 

tariff classification of the merchandise 

for the purpose of collecting the lawful 

amount of duties owed, as well as 

compliance with all other laws and 

regulations administered and enforced 

by CBP. Different procedures are 

provided for the entry and clearance of 

merchandise depending upon the value 

of the merchandise. Shipments of 

merchandise valued at $2,500 or less 

and entered pursuant to 19 U.S.C. 

1498(a)(1)(A) are referred to as 

‘‘informal entries.’’ Specifically, 19 

U.S.C. 1498(a)(1)(A) authorizes the 

Secretary of the Treasury 2 to ‘‘prescribe 

rules and regulations for the declaration 

and entry of merchandise when the 

aggregate value of the shipment does not 

exceed an amount specified . . . by 

regulation, but not more than $2,500.’’ 

Shipments that are eligible for the 

administrative exemptions at 19 U.S.C. 

1321(a)(2) are a subset of the informal 

entries covered by 19 U.S.C. 

1498(a)(1)(A). The statutory framework 

of 19 U.S.C. 1498 authorizes, in effect, 

a less formal entry process than under 

19 U.S.C. 1484 (referred to as ‘‘formal 

entries’’). As a result, informal entry 

procedures are less burdensome and 

complex than the formal entry 

procedures. These simplified 

procedures reduce the overall 

administrative burden on informal entry 

filers. The regulations pertaining to 

entry of merchandise claiming the 

exemptions in 19 U.S.C. 1321(a)(2) are 

found throughout various parts of title 

19 of the Code of Federal Regulations 

(CFR). The informal entry procedures 

for low-value shipments claiming the 

administrative exemption under 19 

U.S.C. 1321(a)(2)(C) are specifically 

found in Part 143, subpart C, which 

cross-reference other regulations 

establishing eligibility requirements. 

Pursuant to the current text of 19 CFR 

143.23(j), such eligible merchandise 

must be entered by providing certain 

information on a bill of lading or a 

manifest listing each bill. However, the 

requirements for shipments imported by 


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6854 Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Proposed Rules 

3The procedures for low-value shipments 

imported by mail are not implicated in this 

proposed rulemaking. 

4For a more detailed discussion of these 

challenges, please see the ELVS NPRM. 90 FR 3048. 

5Section 232 of the Trade Expansion Act of 1962, 

as amended (Section 232); 19 U.S.C. 1862, Public 

Law 87–794, 76 Stat. 872. 

6Section 201 of the Trade Act of 1974 (Section 

201); 19 U.S.C. 2251 et seq., Public Law 93–618, 88 

Stat.1978. 

7Title III of the Trade Act of 1974 (Section 301); 

19 U.S.C. 2411–2420, Public Law 93–618, 88 

Stat.1978 (as amended). 

8See 19 CFR 10.153(g) and 19 U.S.C. 1671h and 

1673g. 

9 19 U.S.C. 1862. 

10See 83 FR 11625 (March 15, 2018) and 83 FR 

11619 (March 15, 2018), as amended. Effective 

February 8, 2022, the United States also imposed 

ad valorem tariffs on imports of aluminum 

derivative articles and steel derivative articles into 

the United States under section 232 of the Trade 

Expansion Act of 1962. See 85 FR 5281 (January 24, 

2020), as amended. 

11 19 U.S.C. 2251, et seq. 

mail are found in 19 CFR part 145, and 

the requirements for shipments 

imported by express consignment 

operators and carriers are covered by 19 

CFR part 128.3

Over the last 10 years, the number of 

shipments entering the United States 

claiming the administrative exemption 

has increased significantly, from 

approximately 139 million a year to 

over one billion a year. This exponential 

increase in shipments claiming the 

administrative exemption creates 

challenges to CBP’s effective 

enforcement of U.S. trade laws, health 

and safety requirements, intellectual 

property rights, and consumer 

protection rules. Low-value e-commerce 

shipments pose the same health, safety, 

and security risks as higher-value 

shipments. Transnational criminal 

organizations and other bad actors 

perceive low-value shipments as less 

likely to be interdicted because these 

types of shipments are not subject to the 

more extensive formal entry procedures. 

This has resulted in attempts to enter 

illicit goods, such as illicit fentanyl, into 

the country through these types of 

shipments. Of particular concern are the 

large volume of daily importations and 

the more limited data regarding lowvalue shipments which make it 

increasingly difficult for CBP to target 

and block illicit synthetic drugs such as 

fentanyl and synthetic drug raw 

materials and related manufacturing 

equipment from entering the country. 

These developments have also created 

challenges with respect to the 

enforcement of trade actions designed to 

address threats to national security, 

unreasonable or discriminatory trade 

practices, and injury to domestic 

industry caused by import surges. In 

response to the significant changes in 

the trade environment and supply 

chains, substantial increases in the 

volume of shipments, and 

advancements to CBP’s technological 

capabilities, CBP is proposing two 

regulatory actions to modify the 

regulations governing the administrative 

exemption.4

First, on [DATE], CBP published an 

NPRM regarding the entry of certain 

low-value shipments eligible for the 

administrative exemption under Section 

321(a)(2)(C). See 90 FR 3048 The NPRM, 

titled ‘‘Entry of Low-Value Shipments’’ 

(ELVS NPRM) proposed various 

amendments to the CBP regulations 

pertaining to the entry of low-value 

shipments. 

The existing informal entry 

requirements for low-value shipments 

are less rigorous than those required for 

other entry types, and often do not 

provide sufficient information for CBP 

to accurately identify the merchandise 

in the shipment and the parties 

involved in its sale and purchase. 

Furthermore, novel and complex ecommerce business models have 

expanded the traditional array of parties 

involved in the import transaction. New 

or infrequent importers often possess 

less familiarity with U.S. customs laws 

and regulations, which can lead to the 

attempted importation of non-compliant 

goods. 

The ELVS NPRM proposed the 

creation of a new entry process for 

entering low-value shipments, referred 

to as the ‘‘enhanced entry process,’’ 

which would allow CBP to target highrisk shipments more effectively. The 

enhanced entry process is set forth in 

the ELVS NPRM as proposed § 143.23(l) 

and would require the provision of the 

10-digit HTSUS classification of the 

merchandise. The ELVS NPRM also 

proposed revisions to the current 

process for entering low-value 

shipments, referred to as the ‘‘basic 

entry process,’’ to require additional 

data elements that would assist CBP in 

verifying eligibility for duty- and taxfree entry. The basic entry process is set 

forth in the ELVS NPRM as proposed 

§ 143.23(k). 

Second, this rulemaking proposes to 

prescribe exceptions to eligibility for the 

administrative exemption under Section 

321(a)(2)(C). These exceptions, 

described in more detail below, are 

consistent with the purpose of Section 

321(a), and necessary to protect the 

revenue and prevent unlawful 

importations. In addition, this 

rulemaking proposes to require a 10- 

digit HTSUS classification for 

shipments entered using the basic entry 

process claiming the administrative 

exemption under Section 321(a)(2)(C). 

B. Specified Trade and National 

Security Actions 

The President has statutory authority 

to impose tariffs and establish quotas 

(among other actions) to address threats 

to national security, and serious injury 

or threat thereof to domestic industry, 

while the U.S. Trade Representative has 

statutory authority to take action to 

address unreasonable or discriminatory 

acts, policies, or practices, subject to 

any direction by the President. This 

rulemaking focuses on actions taken 

under Section 232,5 Section 201,6 and 

Section 301 7 and will refer to these 

actions collectively as ‘‘specified trade 

or national security actions.’’ Currently, 

merchandise provided for in any 

absolute or tariff-rate quota, whether the 

quota is open or closed, and 

merchandise subject to antidumping 

and countervailing duties are not 

eligible for the administrative 

exemption under Section 321(a)(2)(C).8

However, merchandise subject to 

specified trade or national security 

actions imposing an ad valorem tariff is 

currently eligible to claim this 

administrative exemption. 

Section 232 authorizes the President 

to adjust the imports of an article and 

its derivatives, if the Secretary of 

Commerce finds that the article is being 

imported into the United States in such 

quantities or under such circumstances 

as to threaten to impair the national 

security.9 For example, beginning in 

2018, the President imposed ad valorem 

tariffs, absolute quotas, and tariff-rate 

quotas on steel mill articles and on 

aluminum articles from almost all 

countries, pursuant to this authority.10

Section 201 provides that, if the U.S. 

International Trade Commission 

determines that a good is being 

imported into the United States in such 

increased quantities as to be a 

substantial cause of serious injury, or 

the threat thereof, to the domestic 

industry producing a good like or 

directly competitive with the imported 

good, then the President is authorized to 

take all appropriate and feasible action 

within his power which the President 

determines will facilitate efforts by the 

domestic industry to make a positive 

adjustment to import competition (i.e., 

safeguards).11 These actions include 

imposing temporary duties and other 

trade measures. For example, in 2018, 

the United States imposed an ad 

valorem tariff and tariff-rate quota on 

certain crystalline silicon photovoltaic 


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12See, e.g., 83 FR 3541 (January 23, 2018). For 

additional information on actions taken under 

Section 201, please refer to https://ustr.gov/issueareas/enforcement/section-201-investigations (last 

visited November 7, 2024). 

13 19 U.S.C. 2411–2420. 

14See, e.g., 83 FR 28710 (June 20, 2018). For 

additional information on actions taken under 

Section 301, please refer to: https://ustr.gov/issueareas/enforcement/section-301-investigations/tariffactions (last visited November 7, 2024). 

15See 19 U.S.C. 1671h; 19 U.S.C. 1673g (requiring 

CBP to collect antidumping and countervailing duty 

deposits for ‘‘all entries, or withdrawals from 

warehouse, for consumption of merchandise subject 

to [an antidumping or countervailing duty] order’’) 

(emphasis added). 

16CBP notes that merchandise subject to either an 

absolute or tariff-rate quota is already ineligible for 

the administrative exemption pursuant to 19 CFR 

10.153(g). As a result, CBP is not discussing these 

quotas further in this NPRM. 17See 89 FR 57339 (July 10, 2024). 

cells, whether partially or fully 

assembled into other products, pursuant 

to this authority.12

Section 301 allows USTR to address, 

among others, unreasonable or 

discriminatory acts, policies, or 

practices that burden or restrict U.S. 

commerce. Actions may include 

suspending trade agreement concessions 

or imposing import restrictions, subject 

to the specific direction of the President, 

if USTR determines that a trading 

partner of the United States is violating 

trade agreement commitments or 

engaging in discriminatory or 

unreasonable practices that burden or 

restrict U.S. commerce.13 For example, 

the United States has imposed an 

additional ad valorem tariff on many 

products from China because China 

employs a series of technology transferrelated acts, policies, and practices that 

are unreasonable or discriminatory and 

burden or restrict U.S. commerce 

pursuant to this authority.14

Collectively, these trade or national 

security statutes empower the President, 

or USTR, in consultation with 

designated agencies, to enforce U.S. 

trade or national security objectives 

with respect to certain imported 

merchandise by, among other actions, 

imposing an ad valorem tariff in 

addition to the standard applicable duty 

rate. 

C. Excepting Merchandise Subject to 

Specified Trade or National Security 

Actions From Eligibility for the 

Administrative Exemption 

To uphold the objectives of the 

specified trade or national security 

actions discussed above, and consistent 

with the purpose of Section 321(a), to 

protect the revenue, and prevent 

unlawful importations, this rulemaking 

proposes to except merchandise subject 

to an ad valorem tariff imposed under 

Section 232, 201, or 301 from eligibility 

for the exemption under Section 

321(a)(2)(C). The Secretary of the 

Treasury is authorized by 19 U.S.C. 

1321(b) to prescribe such exceptions to 

any administrative exemption. 

These specified trade or national 

security actions are meant to prevent 

specific harms such as the threat of 

certain imports to national security or 

domestic industries or to respond to 

discriminatory or unreasonable 

practices that restrict or burden U.S. 

commerce. Thus, any Government 

expense involved in the collection of 

these additional duties is outweighed by 

the fact that continuing to exempt these 

goods would undermine the statutory 

scheme for trade or national security 

actions generally and the effectiveness 

of specific actions that are currently in 

force. Further, creating this exception 

would ensure that administrative 

exemption eligibility for products 

covered by the specified trade or 

national security actions is consistent 

with treatment under other U.S. trade 

laws. For instance, products covered by 

antidumping or countervailing duty 

orders are already excepted from 

eligibility for the administrative 

exemption under 19 U.S.C. 

1321(a)(2)(C).15

Merchandise that would be ineligible 

to claim the administrative exemption 

under this rulemaking may continue to 

be entered under an appropriate formal 

or informal entry process to ensure 

collection of any applicable tariff. For 

purposes of ensuring merchandise 

subject to additional tariffs imposed 

pursuant to a specified trade or national 

security action is not accorded duty-free 

entry under Section 321(a)(2)(C), this 

rulemaking additionally proposes to 

require a 10-digit HTSUS classification 

for merchandise entered under the 

proposed ‘‘basic entry process’’ claiming 

an exemption under Section 

321(a)(2)(C), in addition to the proposed 

requirement to provide the 10-digit 

HTSUS classification for merchandise 

entered under the ‘‘enhanced entry 

process’’ that was proposed in the ELVS 

NRPM. Provision of the 10-digit HTSUS 

classification at entry enables CBP to 

determine whether the merchandise is 

subject to ad valorem tariffs as a result 

of a specified trade or national security 

action, and therefore whether the 

merchandise is eligible for the 

administrative exemption. 

The proposed exception applies to all 

merchandise identified in a specified 

trade or national security action 

imposing an ad valorem tariff, even if 

the merchandise is accorded an 

exclusion from the ad valorem tariff 

imposed by a specific action.16 CBP’s 

proposal does not affect exclusions for 

purposes of determining whether an ad 

valorem trade or national security action 

tariff is applicable at entry. Merchandise 

accorded an exclusion may continue to 

be entered under an appropriate formal 

or informal entry process without being 

subject to the ad valorem tariff, that 

would otherwise apply had the 

exclusion not been accorded, consistent 

with all applicable requirements. 

Products that are not subject to the ad 

valorem tariff imposed by a specified 

trade or national security action, as 

detailed in each action, remain eligible 

for the exemption under Section 

321(a)(2)(C). For example, in recently 

issued Presidential Proclamation 10782, 

imports of aluminum from Mexico are 

not subject to the ad valorem tariff 

imposed pursuant to Section 232 if the 

article meets specified criteria.17

The proposal to make merchandise 

subject to specified trade or national 

security actions ineligible for the 

administrative exemption under Section 

321(a)(2)(C) is consistent with the 

purpose of Section 321(a) and is 

necessary to protect the revenue. The 

rate of duty for merchandise subject to 

additional Section 232, 201 and 301 

duties is higher than the rate applicable 

to merchandise subject to regular rates 

of duty (that is, most-favored-nation 

rates or rates under trade agreements or 

preference programs). Currently, the 

standard duty rate assessed on imported 

merchandise, on average, is less than 2 

percent for goods subject to regular rates 

of duty. In comparison, the additional 

Section 301 ad valorem tariff rate 

assessed on certain goods from China 

currently ranges from 7.5 percent to 100 

percent, the Section 201 tariff rate on 

certain solar cells is an additional 14.25 

percent, and the Section 232 tariff rate 

is an additional 10 percent for 

aluminum and an additional 25 percent 

for steel mill articles. 

As described in the Regulatory 

Flexibility Act section, when the 

standard duty rate is combined with the 

tariff rate applied to the aggregate value 

of imported merchandise subject to an 

ad valorem tariff under Section 232, 201 

and 301, the total amount of additional 

revenue to be collected on merchandise 

subject to these trade or national 

security actions is projected to range 

between $5.9 billion and $7.8 billion in 

2025. Considering the rates of duties 

and the aggregate trade volume of 

affected imports, CBP anticipates that 

the amount of additional revenue to be 

collected under the proposed exception 

would substantially outweigh the 

expense and inconvenience to the U.S. 

Government of collecting the duties. 


ddrumheller on DSK120RN23PROD with PROPOSALS1
6856 Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Proposed Rules 

18CBP will take into account all public comments 

on the ELVS NPRM and will adjust this 

rulemaking’s language as appropriate. 

Thus, making goods subject to ad 

valorem tariffs pursuant to these trade 

or national security actions ineligible for 

the administrative exemption is 

consistent with the purpose of Section 

321(a), because the amount of revenue 

to be collected on goods subject to ad 

valorem tariffs pursuant to these trade 

or national security actions is 

substantial enough to outweigh the 

expense and inconvenience to the 

government of processing the low-value 

shipments. Moreover, creating an 

exception for goods subject to ad 

valorem tariffs pursuant to these trade 

or national security actions protects the 

revenue because failing to collect these 

duties represents a substantial loss of 

revenue to the U.S. Government. 

The above proposal also serves to 

prevent unlawful importations. As 

noted above, over the last 10 years, the 

number of shipments entering the 

United States claiming the 

administrative exemption has increased 

significantly, from approximately 139 

million a year in 2015 to over one 

billion a year in 2024. Even though 

these shipments have a low value, this 

significant increase in volume makes it 

more challenging for CBP to conduct 

targeting for purposes of, among other 

things, identifying violations of U.S. 

trade laws, health and safety 

requirements, intellectual property 

rights, and consumer protection rules, 

and to block illicit synthetic drugs such 

as fentanyl and synthetic drug raw 

materials and related manufacturing 

equipment from entering the country. 

Such enforcement challenges put 

American consumers at risk. CBP 

anticipates that excepting merchandise 

subject to ad valorem tariffs pursuant to 

specified trade or national security 

actions from eligibility for the 

administrative exemption will result in 

a decrease in the overall volume of 

shipments claiming this exemption. 

CBP expects that shipments of ineligible 

merchandise will be consolidated into 

larger shipments and entered under an 

appropriate formal or informal entry 

process, resulting in decreased overall 

volume of shipments. 

D. Unique Considerations for 

Applicability to the International Mail 

Shipments 

While CBP has included international 

mail in the scope of this proposed 

rulemaking, CBP seeks public comments 

that address the operational feasibility 

in the international mail environment. 

The U.S. Postal Service (USPS) has 

committed to provide comments as part 

of the rulemaking record. This approach 

seeks to determine whether there are 

sufficient reasons why postal shipments 

can and should be treated differently, 

and those differences are best addressed 

as the rulemaking moves forward with 

input from the USPS and the public. 

The reasons postal shipments may 

require a different approach in the 

proposed rulemaking include the 

following: (1) the USPS is subject to 

universal service obligations to deliver 

international mail and other constraints 

under both international agreements 

and domestic law, which create unique 

challenges to the application of the 

proposed rule to international mail; (2) 

international mail operates differently 

from other modes of global commerce, 

including that international postal 

shipments do not benefit from an endto-end process as do commercial 

shipments; (3) the overwhelming 

majority of international mail consists of 

low-value shipments and the USPS 

typically cannot collect duties directly 

from the foreign mailers with whom it 

has no relationship; and (4) as a result 

of these operational considerations, the 

application of this proposed rulemaking 

may create substantial unrecoverable 

financial costs for the USPS, which 

would be inconsistent with the legal 

obligation of the USPS to operate in a 

financially self-sufficient manner. 

Further, if CBP decides to exclude 

international mail from the scope of a 

final rule, the agency would intend to 

address the trade remedies and national 

security loophole for de minimis goods 

through additional rulemaking tailored 

to the unique operational and legal 

characteristics of the international mail 

environment. 

III. Discussion of Proposed 

Amendments 

This rulemaking proposes 

amendments to provisions found in 19 

CFR parts 10, 128, and 143. Because 

CBP has also proposed amendments to 

the same provisions in the ELVS NPRM, 

the regulatory amendments proposed in 

this section are amendments of the 

regulations as proposed in the ELVS 

NPRM. See 90 FR 3048.18

CBP proposes an amendment to 19 

CFR part 10 that would make 

merchandise subject to an ad valorem 

tariff under Sections 232, 201 and 301 

ineligible for the exemption under 

Section 321(a)(2)(C). Part 10, among 

other things, implements in CBP 

regulations the statutorily authorized 

administrative exemption for low-value 

shipments, and lists the conditions that 

must be met to qualify for the 

exemption. Section 10.153 identifies 

exceptions to the administrative 

exemption. The ELVS NPRM proposes 

to amend § 10.153 by adding a new 

paragraph (i), which tracks the existing 

statutory exception to eligibility for 

merchandise subject to antidumping 

and countervailing duties. In this 

present notice of proposed rulemaking, 

CBP proposes to further amend this 

section to add an additional new 

paragraph (j), providing that imported 

merchandise subject to actions imposing 

additional duties pursuant to Section 

232, Section 201, or Section 301 are also 

ineligible for the administrative 

exemption. 

CBP additionally proposes 

amendments to 19 CFR parts 128 and 

143, to require a 10-digit HTSUS 

classification for all merchandise 

entered under the proposed basic entry 

process as described in the ELVS 

NPRM. As a result of these proposed 

amendments, a 10-digit HTSUS 

classification would be required under 

both the proposed basic and enhanced 

entry process described in the ELVS 

NPRM. By requiring a 10-digit HTSUS 

classification for entries using either the 

proposed basic or enhanced process, 

CBP will have additional data needed to 

corroborate the product description that 

would also be required for all basic and 

enhanced entries. This HTSUS 

classification assists CBP in determining 

eligibility for the administrative 

exemption, including whether 

merchandise is subject to specified trade 

or national security actions, as well as 

assisting with administration and 

enforcement more generally. Therefore, 

CBP is proposing to amend 19 CFR part 

128, by adding this classification 

requirement to § 128.21(a)(4)(ii), as 

proposed in the ELVS NPRM, and part 

143, by adding this requirement to 

§ 143.23(k), as proposed in the ELVS 

NPRM. 

Part 128, subpart C, sets forth 

requirements and procedures for the 

clearance of imported merchandise 

carried by express consignment 

operators and carriers, including 

couriers, under special procedures. 

Current § 128.21(a) lists the manifest 

information required in advance of the 

arrival of all express consignment cargo. 

The ELVS NPRM proposed to amend 

§ 128.21(a)(4)(ii) to explain that the 

HTSUS subheading number would not 

be required for low-value shipments 

entered under the basic entry process in 

§ 143.23(k). However, given that this 

notice of proposed rulemaking now 

proposes to extend this HTSUS 

subheading number reporting 

requirement to the basic entry process, 

CBP now proposes to amend 

§ 128.21(a)(4)(ii) to make clear that the 


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19 Data pulled from CBP’s Automated Targeting 

System (ATS) database. 

HTSUS subheading number is required 

for shipments claiming the 

administrative exemption entered under 

either the basic entry process, as 

proposed in § 143.23(k) of the ELVS 

NPRM, or the enhanced entry process, 

as proposed in § 143.23(l) of the ELVS 

NPRM. 

Part 143, subpart C, sets forth the 

requirements for the clearance of 

imported merchandise under informal 

entry procedures. In the ELVS NPRM, 

CBP proposed to amend the current 

release from manifest process described 

in current § 143.23(j) and (k). The ELVS 

NPRM consolidates the general 

requirements for the basic entry process 

in proposed § 143.23(k). CBP is 

proposing to further amend paragraph 

(k) by adding the 10-digit HTSUS 

classification as a required data element 

that must be provided for all shipments 

entered using the basic or enhanced 

entry processes proposed in the ELVS 

NPRM. 

IV. Statutory and Regulatory Reviews 

A. Executive Orders 12866 and 13563 

Executive Orders 12866 (Regulatory 

Planning and Review), as amended by 

Executive Order 14094 (Modernizing 

Regulatory Review), and 13563 

(Improving Regulation and Regulatory 

Review) direct agencies to assess the 

costs and benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). Executive Order 13563 

emphasizes the importance of 

quantifying costs and benefits, reducing 

costs, harmonizing rules, and promoting 

flexibility. 

This rule is a ‘‘significant regulatory 

action’’ that is economically significant 

under section 3(f)(1) of Executive Order 

12866, as amended by Executive Order 

14094, because the rule would have an 

annual effect of $200 million or more 

during at least one year of the analysis. 

A regulatory impact analysis (RIA), 

entitled Trade and National Security 

Actions and Low-Value Shipments 

(TraNSALS) Regulatory Analysis and 

Regulatory Flexibility Analysis, has 

been included in the docket of this 

rulemaking USCBP–2025–0003. The 

following presents a summary of the 

aforementioned regulatory impact 

analysis. Although this analysis 

attempts to mirror the terms and 

wording of the rule, no attempt is made 

to precisely replicate the regulatory 

language and readers are cautioned that 

the actual finalized regulatory text, not 

the text of this assessment, is binding. 

1. Purpose of the Rule 

This proposed rule makes 

merchandise subject to an ad valorem 

tariff pursuant to a trade or national 

security action under Section 232, 201, 

or 301 ineligible for the administrative 

exemption in 19 U.S.C. 1321(a)(2)(C). 

The administrative exemption allows 

shipments of merchandise to be 

imported by one person on one day to 

pass free of duty and tax imposed on or 

by reason of importation if the aggregate 

fair retail value in the country of 

shipment does not exceed $800, and the 

shipment is not covered by a single 

order or contract but sent in a separate 

lot to secure duty-free treatment. 

Throughout this analysis, we refer to 

low-value shipments that qualify for the 

administrative exemption in 19 U.S.C. 

1321(a)(2)(C) as ‘‘qualifying low-value 

shipments.’’ For fiscal year 2023, CBP 

estimates that hundreds of thousands of 

qualifying low-value shipments would 

have been assessed additional tariffs 

owed under Section 232, 201, or 301, 

had they not claimed the administrative 

exemption. By allowing these low-value 

shipments to be imported without 

assessment of the additional duties 

owed pursuant to an applicable trade or 

national security action, the 

administrative exemption is 

undermining the United States’ trade 

and national security actions. 

Additionally, low-value shipment 

volumes have grown rapidly in recent 

years, rising from approximately 139 

million to over 1 billion shipments per 

year between fiscal years 2015 and 

2023.19 This overwhelming volume has 

created operational inefficiencies for 

CBP’s inspection of low-value 

shipments for compliance with U.S. 

laws and regulations. CBP anticipates 

that this rulemaking would increase 

tariff revenue, reduce the volume of 

qualifying low-value shipments, 

improve effectiveness of specified trade 

and national security actions, and 

thereby increase the efficiency with 

which CBP targets imports for security 

risks. 

2. Need for the Proposed Rule 

The Trade Expansion Act of 1962 and 

the Trade Act of 1974 authorize the 

President and USTR to impose tariffs in 

certain circumstances. Specifically, as 

relevant to this proposed rulemaking, 

Section 232 of the Trade Expansion Act 

of 1962 authorizes the President to 

adjust imports of an article and its 

derivatives if the Secretary of Commerce 

finds that the article is being imported 

into the United States in such quantities 

or under such circumstances as to 

threaten to impair the national security. 

Section 201 of the Trade Act of 1974 

authorizes the President to impose 

temporary trade measures if the 

International Trade Commission finds 

that an article is being imported in such 

increased quantities as to be a 

‘‘substantial cause of serious injury or 

the threat thereof’’ to U.S. industries. 

Lastly, Section 301 of the Trade Act of 

1974 authorizes USTR, subject to the 

direction of the President, if any, to 

impose import restrictions to address, 

among other things, unreasonable or 

discriminatory acts, policies, or 

practices that burden or restrict U.S. 

commerce. This proposed rulemaking 

refers to tariffs imposed under Section 

232, 201, or 301 as ‘‘specified trade or 

national security actions.’’ 

These specified trade or national 

security actions are designed to protect 

domestic industries, and to address the 

harm to domestic industry and the 

American public from substantial cause 

of serious injury or threat thereof from 

surges of injurious imports and 

unreasonable or discriminatory trade 

practices, and may in turn encourage 

foreign governments to eliminate 

policies that gave rise to the action, or 

to address the threatened impairment of 

U.S. national security caused by certain 

imports. However, some merchandise 

subject to specified trade or national 

security actions may also be eligible for 

the administrative exemption pursuant 

to Section 321 of the Trade Act of 1930, 

as amended (19 U.S.C. 1321(a)(2)). 

Section 321 provides administrative 

exemptions from duty and taxes that are 

imposed upon or by reason of 

importation for three categories of 

imported articles: 

• Certain bona-fide gifts valued at 

$100 or less ($200, if the gift was from 

certain island possessions) sent from 

persons in foreign countries to persons 

in the United States; 

• Certain personal or household 

articles valued at $200 or less 

accompanying persons arriving in the 

United States; and 

• All other imported articles when 

the aggregate fair retail value of the 

articles in the country of shipment is 

$800 or less. 

This proposed rulemaking only 

concerns shipments in the third 

category, which is covered by the 

administrative exemption in 19 U.S.C. 

1321(a)(2)(C). To avoid confusion with 

the other two administrative 

exemptions, we will refer to this 

exemption alone as the ‘‘administrative 


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20Our estimate is based on a random sample of 

6,238,513 ET86 entries from fiscal year 2023, pulled 

from CBP’s ACE database. We assume that 

qualifying low-value shipments cleared off the 

manifest are as likely as type 86 entries (a test 

which created a new electronic informal entry 

process for filing qualifying low-value shipments in 

ACE (84 FR 40079)) to be covered by additional 

Section 232, 201, or 301 tariffs. 

21 Data pulled from CBP’s Automated Targeting 

System (ATS) database. 

22The ‘‘release from manifest’’ process describes 

shipments claiming an exemption under 19 U.S.C. 

1321(a)(2)(C) which are released from CBP custody 

based on the information provided on the manifest 

or bill of lading, 19 CFR 128.24(e) and 143.23(j)(3)– 

(k). See 84 FR 40079, 40080 (Aug. 13, 2019); 89 FR 

2630, 2631 (Jan. 16, 2024). 

23While other entry types are available, they 

comprise a minor portion of total entries. Because 

type 01 and 11 entries are most common, we 

assume these are the most likely types that will be 

employed for shipments that no longer qualify for 

the administrative exemption. 

24The ‘‘basic entry process,’’ as described in the 

ELVS NPRM is largely the same as what is known 

as the ‘‘release from manifest’’ process currently in 

use but with minor changes to certain data 

elements. Detailed information about those 

proposed data element changes can be found in the 

Entry of Low-Value Shipment NPRM. 

25The proposed ELVS rule would allow entry 

filers to apply for a waiver privilege (i.e., a 

‘‘waiver’’) from the requirement to transmit the 

HTSUS as part of an enhanced entry for non-PGA 

related goods. To obtain a waiver, the filers meet 

several criteria generally demonstrating their ability 

to properly classify merchandise, determine 

whether the merchandise is subject to the 

requirements of partner government agencies 

(PGAs), or otherwise precluded by law from 

eligibility for the administrative exemption. 

exemption.’’ Specifically, the 

administrative exemption allows a 

shipment to be imported duty-free when 

the aggregate fair retail value in the 

country of shipment of all articles 

imported by one person on the same day 

and exempted from the payment of duty 

is less than or equal to $800. This 

administrative exemption was originally 

set at $1 in the Customs Administrative 

Act of 1938 to limit the ‘‘expense and 

inconvenience’’ of collecting duty when 

it was a disproportionate amount of 

work by the U.S. Government compared 

to the amount of revenue that would be 

collected. Since its inception, Congress 

has increased the daily aggregate value 

cap to $5 in 1978, $200 in 1993, and 

$800 in 2016. In recent years, the 

volume of imports subject to ad valorem 

tariffs as a result of specified trade or 

national security actions under Sections 

232, 201, and 301 has increased, but 

low-value shipments qualifying for the 

administrative exemption are permitted 

to enter duty-free, even when subject to 

additional duties pursuant to these 

actions. Thus, the administrative 

exemption dampens the impact of 

specified trade or national security 

actions by allowing low-value imports 

that claim the exemption to legally 

avoid all duties and taxes imposed upon 

or by reason of importation that would 

otherwise be collected, including the 

additional duties collected under 

specified trade and national security 

actions. In fiscal year 2023, an estimated 

77 percent of shipments claiming the 

administrative exemption would have 

been assessed additional duties under 

Section 232, 201, or 301 had they not 

claimed the administrative exemption.20

Additionally, low-value shipments 

create operational inefficiencies for 

CBP’s ability to inspect these goods due 

to their high volumes and more limited 

data requirements. The volume of 

shipments claiming the administrative 

exemption has risen sharply from 

approximately 139 million in fiscal year 

2015 (prior to the increase in the daily 

aggregate exempted value cap) to 1 

billion shipments per year in fiscal year 

2023.21 In 2019, CBP implemented the 

Entry Type 86 Test (84 FR 40079; 

subsequently amended in 89 FR 2630), 

which created a new electronic process 

for filing entries of qualifying low-value 

shipments in the Automated 

Commercial Environment (ACE), as a 

voluntary alternative to the current 

regulatory ‘‘release from manifest’’ 

process under parts 128 and 143 of the 

CBP regulations. Under this test, an 

owner, purchaser, or customs broker 

appointed by an owner, purchaser, or 

consignee may file an entry type 86 

through ACE for shipments claiming the 

administrative exemption. Ten data 

elements are required to be transmitted 

to CBP as part of the entry, including 

the 10-digit HTSUS classification for the 

imported merchandise. The Entry Type 

86 Test facilitates the clearance of 

compliant low-value shipments into the 

United States through the filing of an 

electronic entry in ACE, to include the 

submission of partner government 

agency (PGA) data, which expedites 

release. While Entry Type 86 has sped 

up processing for many shipments 

claiming the administrative exemption, 

the remaining shipments entered under 

the current regulatory ‘‘release from 

manifest’’ process 22 may require 

manual clearance and provide CBP with 

more limited data. CBP anticipates that 

this rulemaking would reduce the 

volume of shipments claiming the 

administrative exemption and thereby 

increase the efficiency with which CBP 

targets imports for security risks, 

including curbing the smuggling of 

illegal opioids such as heroin and 

fentanyl, by shifting some shipments to 

other entry types that require more data 

and the use of an authorized broker. 

3. Summary of Proposed Rule 

In this proposed rule, CBP proposes to 

make all goods subject to trade or 

national security actions under Sections 

232, 201, and 301 ineligible for the 

administrative exemption. As a result, 

importers of such goods would have to 

pay both the standard duties and any 

additional duties imposed pursuant to 

trade and national security actions 

under Sections 232, 201, and 301, even 

when the entry value is under $800; 

shipments containing such goods would 

instead need to be entered through an 

alternative entry type. CBP assumes that 

filers will use entry type 11 (another 

informal entry type) or entry type 01 (a 

formal entry type), depending on the 

value of the merchandise.23 To enable 

CBP to determine whether merchandise 

is eligible for the administrative 

exemption, CBP proposes to collect the 

10-digit HTSUS classification as part of 

the basic as well as the enhanced 

processes, as described in the ELVS 

NPRM. This is a proposed modification 

of the ELVS NPRM, which did not 

propose to require the 10-digit HTSUS 

classification as part of the data required 

for entry under the basic entry 

process.24 In the ELVS NPRM, CBP 

proposed to only require the 10-digit 

HTSUS classification of the 

merchandise to be provided as part of 

the enhanced entry process (subject to 

waiver in certain circumstances subject 

to specified conditions).25 This Trade 

and National Security Actions and LowValue Shipments NPRM would expand 

that HTSUS classification reporting 

requirement to include shipments 

claiming the administrative exemption 

under the basic entry process. 

The proposed rule would strengthen 

the United States’ specified trade and 

national security actions, especially for 

Section 301 tariffs. For example, the 

goal of the current Section 301 action is 

to discourage China’s acts, policies, and 

practices related to technology transfer, 

intellectual property, and innovation 

that burden or restrict U.S. commerce. 

Additionally, the specified trade or 

national security actions can be used to 

protect domestic industries from serious 

injury, or the threat thereof, by import 

surges or adjust imports that threaten to 

impair the national security. Moreover, 

enforcement of U.S. trade laws and US 

trading rights protects domestic 

industries and workers from unfairly 

traded imports. An industry that is 

particularly vulnerable to 

circumvention by qualifying low-value 

shipments from China is the U.S. textile 

and apparel manufacturing industry. A 

large volume of Chinese textile and 

apparel imports claim the 

administrative exemption, thereby 

avoiding tariffs. Further, approximately 


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26See Chapter 5 of standalone RIA for sources 

and estimation method. 27We acknowledge that consolidation may not be 

possible for all qualifying low-value shipments. For 

a discussion of which shipments might be 

consolidated see Exhibit 3–5 of the standalone RIA. 

28For example, imagine a retailer sells 10,000 

identical shirts manufactured in China via an 

eCommerce platform, and each shirt has a value of 

$10. Packaging each shirt individually at a factory 

or distribution center in China for direct delivery 

to the final consumer in the United States allows 

filers to claim the administrative exemption on 

behalf of the final consignee (i.e., the consumer). 

Absent this administrative exemption, the retailer 

must pay the tariff based on the value of each shirt 

as well as a filing fee for each individual shipment. 

If the retailer chooses instead to ship all 10,000 

shirts as a single line item in a bulk shipment to 

an existing distribution center in the United States, 

the total tariff payment is the same, but the filing 

fee is orders of magnitude smaller because it is only 

paid once (rather than 10,000 times). The shirts can 

then be packaged in the United States for individual 

delivery to the final customer. Retailers will make 

strategic decisions about how to import goods 

affected by this rule based on a variety of factors 

including filing fees; the relative costs of using 

foreign or domestic distribution centers; the costs 

in terms of money and time associated with slower, 

lower-priced ocean freight (bulk containers) versus 

faster, higher-priced air freight (individual packets); 

inventory management costs; etc. 

29See the ELVS Regulatory Analysis supporting 

the NPRM. 

30ELVS proposes to require a CTIN, the country 

of shipment of the merchandise, the 10-digit 

HTSUS for all enhanced entries. ELVS also 

proposes to require enhanced entries to include a 

URL, product picture, product identifier, and/or a 

shipment x-ray or other security screening report 

number verifying completion of foreign security 

scanning of the shipment. The seller name and 

address, purchaser name and address, any data or 

documents required by other government agencies, 

advertised retail product description, and 

marketplace name and website or phone number 

are proposed to be required for enhanced entries as 

they are applicable. 

50 percent of the value of current 

qualifying low-value shipments is 

attributed to textiles and apparel that 

would otherwise be subject to 

additional duties under Section 301. 

Broadly speaking, an estimated 15.9 

percent of total imports covered by 

Section 232, 201, and 301 tariffs are 

exempt from the tariffs as a result of 

claiming the administrative 

exemption.26 By excepting imported 

goods that are subject to additional 

duties imposed under Section 232, 201, 

and 301 actions from the administrative 

exemption under 19 U.S.C. 

1321(a)(2)(C), CBP would increase the 

effectiveness of these specified trade or 

national security actions. This proposed 

rule would further help protect 

domestic industries and discourage 

unreasonable or discriminatory 

practices, among other things, by other 

countries. 

This rule would also increase CBP’s 

inspection efficiency by shifting a large 

volume of shipments that would 

become ineligible to claim the 

administrative exemption into 

alternative entry types, such as formal 

type 01 and informal type 11 entries. 

Low-value shipments claiming the 

administrative exemption are currently 

more challenging for CBP to efficiently 

inspect than other entry types because 

they arrive with more limited data. As 

a result, CBP officers must do more 

work to ensure that a low-value 

shipment is admissible and to 

determine whether the shipment is 

eligible for the administrative 

exemption, which is often impossible 

without physical inspection of the 

shipment. Shipments entered using type 

01 or 11 entries, in contrast, arrive with 

more detailed information about the 

contents of the goods included in the 

shipment, increasing CBP’s inspection 

efficiencies. 

Furthermore, shifting shipments that 

will become ineligible for the 

administrative exemption to an 

alternative entry type, such as type 01 

formal or type 11 informal entry, is 

likely to result in the consolidation of 

multiple, similar items into a single 

shipment.27 Specifically, the $800 daily 

aggregate value limit for shipments 

claiming the administrative exemption 

incentivizes importers to de-consolidate 

goods into numerous low-value 

shipments to avoid paying tariffs. 

Absent the ability to avoid tariffs, 

importers are likely to be incentivized to 

reduce per-unit shipping costs by 

consolidating items in bulk 

shipments.28 This consolidation results 

in fewer, higher value entries, where 

multiple identical items can be 

reviewed by CBP officers at the same 

time. Consolidation of non-identical 

items is also possible and could result 

in savings if they are from the same 

shipper or origin or have other similar 

characteristics. However, for the 

purposes of this analysis, we focus on 

the consolidation of similar or identical 

goods, because that is where there are 

the clearest savings for both trade 

members and CBP. 

Finally, the proposed rule is likely to 

improve CBP’s ability to accurately 

identify the contents of a shipment 

claiming the administrative exemption 

even if it does not contain goods subject 

to an ad valorem tariff as a result of a 

trade or national security action under 

Section 232, 201, or 301. Many of these 

goods currently use the ‘‘release from 

manifest’’ entry process, and absent this 

rule, would use the basic entry process 

if the ELVS NPRM is finalized. The 

‘‘release from manifest’’ process (or its 

proposed modification into the ‘‘basic 

entry process’’ as described in the ELVS 

NPRM) is less costly for importers, 

because less information is submitted to 

CBP, but the release of shipments by 

CBP is slower, averaging 3 days.29 In 

contrast, shipments using type 01 or 11 

entries, or the current Entry Type 86 

Test (or its proposed modification into 

the ‘‘enhanced entry process’’ as 

described in the ELVS NPRM), are 

typically released by CBP within 1 day. 

This proposed rule would require a 10- 

digit HTSUS classification under both 

the basic and enhanced entry process. 

As a result, importers will likely opt for 

enhanced entry, with its faster clearance 

times, given that the difference in 

administrative costs between the basic 

and enhanced entry processes will 

become negligible. Having the HTSUS 

classification along with several 

additional data elements required for 

enhanced entry under the ELVS NPRM 

will improve CBP’s targeting abilities.30

4. Proposed Rule Benefits, Costs and 

Transfers 

Analytic Baseline 

This analysis estimates the benefits, 

costs, and transfers anticipated for a 10- 

year period beginning in 2025, the 

expected year of rule implementation. 

Estimating these effects requires 

defining and modeling a baseline 

scenario that reflects the world without 

the proposed regulation. By comparing 

the baseline, or ‘‘world without the 

regulation,’’ to the ‘‘world with the 

regulation,’’ analysts can characterize 

the incremental effects of the regulation. 

The baseline scenario is forwardlooking, in that it projects what the 

world would look like, in the future, 

absent the new regulation. We make 

three key assumptions related to the 

baseline scenario: 

• Shipment modes and entry types: 

We assume that in the future, absent 

this proposed rule, shipments would 

continue to be entered into the United 

States in the same proportions (by 

shipment mode and entry type) as in 

2023. These entries are predominantly 

commercial non-express type 86 entries 

(58 percent), followed by manifest 

express entries (17 percent), manifest 

commercial non-express (16 percent), 

postal (8 percent), and express type 86 

entries (1 percent). 

• Low-value shipment growth: We 

assume the total value of qualifying lowvalue shipments in 2026 through 2034 

grows at the rate of projected GDP 

growth over the same period. We note 

that this assumption is highly uncertain. 

Since 2016, when Congress increased 

the administrative exemption limit to 

$800, the volume of qualifying lowvalue shipments has increased 

exponentially, with shipments from 


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31Consumer surplus is an economic measure of 

welfare that reflects the difference between what a 

consumer is willing to pay and what the consumer 

paid for a product. 

32 In this analysis, we assume the prices 

experienced by consumers include tariffs and 

processing fees paid by manufacturers or retailers 

selling the goods and arranging for their 

importation and delivery. 33We note that this analysis focuses primarily on 

the overall societal effect of the proposed rule. It 

does not quantify the potential distributional effects 

associated with the incidence of the increased 

prices for affected goods and the incidence of 

revenue gains associated with the collection of tariff 

revenue; however, it describes the potential 

distributional effects of increased prices 

qualitatively in Section 3.4 and Appendix A. 

Forecasting how the tariff revenue may be returned 

to the U.S. population (e.g., through tax cuts or 

other policy options) is beyond the scope of this 

effort. If tax cuts are selected, additional 

distributional distortions are possible. 

China the primary contributor to this 

growth. We assess the sensitivity of our 

results to alternative growth 

assumptions. 

• Entry of Low-Value Shipments 

(ELVS) Rule: CBP has published a 

Notice of Proposed Rulemaking 

proposing the ELVS rule, which would 

replace the existing Entry Type 86 Test 

with a new entry process (‘‘enhanced 

entry’’) providing expedited clearance 

for qualifying low-value shipments. For 

the purposes of this analysis, we assume 

that the final ELVS rule will be 

published and implemented in advance 

of the Trade and National Security 

Action final rule. If it is not, this 

analysis will be revised as necessary in 

the final rule. 

Incremental Costs and Transfers 

We model costs and transfers from the 

proposed rule using a partial 

equilibrium analysis for industry-level 

qualifying low-value imports from 2025 

to 2034. The primary costs of the 

proposed rule are consumer surplus 

losses resulting from increased duties 

and possibly increased processing fees, 

resulting in higher prices for imported 

goods paid by U.S. consumers on 

imported goods.31 32 Under the proposed 

rule, importers are required to pay 

tariffs on all goods subject to an ad 

valorem tariff pursuant to Section 232, 

201, or 301, and some shipments are 

subject to additional fees. Our analysis 

focuses only on goods that would be 

subject to Section 301 tariffs absent the 

administrative exemption. Data shows 

that 0.1 percent of goods (by value) that 

entered using ET86 in FY 2023 had 

HTSUS codes subject to Section 232 or 

201 tariffs. The resulting price increases 

lead to higher equilibrium dutyinclusive prices and reduced imported 

quantities, leading to a decline in 

consumer surplus, a measure of welfare 

that reflects the difference between what 

a consumer is willing to pay and what 

the consumer paid for a product. 

An important component of consumer 

surplus loss is the transfer of tariff 

revenue to the government. Although 

consumers face higher prices for 

imported goods, the U.S. government 

generates tariff revenue on goods that 

were previously avoiding tariffs by 

claiming the administrative exemption. 

The net effect of consumer surplus 

losses and gain in government tariff 

revenues is the resulting welfare change 

under the proposed rule.33

Cost Shocks 

To model the impact of the proposed 

rule, we introduce cost shocks 

comprised of two components: (1) a 

tariff that will apply to certain goods 

currently claiming the administrative 

exemption; and (2) additional fees 

associated with services provided by 

licensed customs brokers and CBP staff 

to process low-value shipments, 

regardless of whether the shipments 

remain in the 19 U.S.C. 1321(a)(2)(C) 

exemption environment or shift to 

formal type 01 or informal type 11 

entry. The tariffs apply on an ad 

valorem basis to affected goods, 

regardless of whether these goods are 

shipped individually or as part of larger, 

consolidated shipments. The weighted 

average tariff rate for affected low-value 

shipments across all industries included 

in the analysis is 21.2 percent. Table 1 

presents the weighted average tariff rate 

by industry for affected low-value 

shipments. 

TABLE 1—WEIGHTED AVERAGE SECTION 301 AND MFN TARIFF RATES BY 3-DIGIT NAICS CODE

NAICS code NAICS description 

Weighted average 

tariff rate 

(%) 

11 ............................................ Agriculture, Forestry, Fishing and Hunting .............................................................................. 21.8 

211 .......................................... Oil and Gas Extraction ............................................................................................................. 25.0 

212 .......................................... Mining (except Oil and Gas) .................................................................................................... 25.0 

311–312 .................................. Food, Beverage and Tobacco Product Manufacturing ............................................................ 12.2 

313 .......................................... Textile Mills ............................................................................................................................... 31.2 

314 .......................................... Textile Product Mills ................................................................................................................. 31.0 

315 .......................................... Apparel Manufacturing ............................................................................................................. 21.0 

316 .......................................... Leather and Allied Product Manufacturing ............................................................................... 28.3 

321–323 .................................. Wood, Paper, Printing .............................................................................................................. 21.2 

324 .......................................... Petroleum and Coal Products Manufacturing .......................................................................... 26.8 

325–326 .................................. Chemical, Plastics, Rubber Products Manufacturing ............................................................... 17.8 

327 .......................................... Nonmetallic Mineral Product Manufacturing ............................................................................ 23.9 

331 .......................................... Primary Metal Manufacturing ................................................................................................... 23.1 

332 .......................................... Fabricated Metal Product Manufacturing ................................................................................. 25.5 

333 .......................................... Machinery Manufacturing ......................................................................................................... 24.9 

334 .......................................... Computer and Electronic Product Manufacturing .................................................................... 21.0 

335 .......................................... Electrical Equipment, Appliance, and Component Manufacturing ........................................... 26.4 

336 .......................................... Transportation Equipment Manufacturing ................................................................................ 22.8 

337–339 .................................. Furniture and Miscellaneous Manufacturing ............................................................................ 14.1 

All Industries ........................... ................................................................................................................................................... 21.2 

Source: Data provided by the International Trade Administration (ITA) via email on October 11, 2024. 

In contrast to tariff payments, fees are 

assessed on a per-shipment basis, and 

thus vary significantly depending on 

assumptions about the degree to which 

items are bundled together in larger, 

consolidated shipments. These fees 

include: (1) payments to brokers to file 

and process entries; and (2) the 

merchandise processing fee (MPF) paid 


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34Conversations with brokers suggest the MPF for 

higher-value bulk shipments will be negligible. 

Therefore, we do not consider the MPF fees 

explicitly in the analysis. 

35As noted earlier, we acknowledge that 

consolidation may not be possible for all qualifying 

low-value shipments. Thus, this scenario more 

likely represents a lower-bound estimate of the 

impacts of the proposed rule. 

36As discussed in detail in Section 3.3.2 of the 

standalone RIA, given the high cost of broker fees 

and MPF relative to the value of items included in 

qualifying low-value shipments, it is likely that 

retailers will strategically consolidate shipments in 

order to negate the impact of these fees. Thus, this 

low impact scenario considers only the impact of 

newly applicable tariffs. The impact of additional 

broker fees and MPF is considered in the high 

impact scenario. 

37 In this high impact scenario, some shipments 

are likely to remain as low value shipments and 

should therefore see faster clearance times resulting 

from the use of a different filing process. However, 

as discussed earlier and in Chapter 3 of the 

standalone RIA, in both the low and high impact 

scenarios, we anticipate substantial consolidation of 

individual items in larger, bulk shipments, where 

they will be sent to U.S. facilities for storage, 

packaging, and distribution. These items will likely 

travel by ship, rather than plane, so while they will 

be cleared through customs more quickly, they will 

take longer to travel from the foreign port to their 

U.S. destination (this time cost is offset by 

substantially lower freight costs associated with 

ocean freight). On balance, considering all affected 

shipments, it is difficult to say whether net time 

savings will occur. For this reason, we do not 

explicitly quantify potential time-savings or time 

costs in this analysis. 

to CBP on all type 01 and 11 entries.34

Table 2 presents the fees charged by 

brokers (working with carriers) to file 

and process entries. Our estimate for the 

cost of processing an international 

shipment in the postal environment is 

$8.55. We do not include the $7.20 

dutiable mail fee charged by CBP, which 

is required when CBP personnel must 

complete the paperwork for postal 

shipments themselves, as it is not clear 

how often CBP personnel would be the 

ones completing the paperwork. CBP is 

requesting public comment on the 

expected costs of processing a shipment 

in the postal environment, including 

how often the dutiable mail fee is 

expected to apply. 

TABLE 2—PER SHIPMENT FEES

Type Fee 

($/shipment) 

Broker fee: 1

Non-express commercial carrier 2 ................................................................................................................................................ $1.00 

Express commercial carrier 3 ........................................................................................................................................................ 30.00 

Postal carrier 3 .............................................................................................................................................................................. 8.55 

Merchandise Processing Fee (MPF): 4

All .................................................................................................................................................................................................. 2.53 

Sources and assumptions: 

1A licensed broker is not currently required for the ‘‘release from manifest’’ entry process, nor would the ELVS NPRM require one for the basic 

entry process if the ELVS NPRM is finalizes as proposed. We assume for purposes of this analysis that a broker fee is charged for any entry requiring an HTSUS code and is similar regardless of whether the filer uses enhanced entry, entry type 86, 01, or 11. (Source: Personal communication with representatives of a major broker association on 9/26/2024.) 2Email from CBP dated 10/11/2024. 

3Fajgelbaum and Khandelwal (2024). 

4 Minimum merchandise processing fee for informal entries as of October 1, 2023. (As viewed on 10/11/2024 on https://

www.federalregister.gov/documents/2023/07/28/2023-16197/cobra-fees-to-be-adjusted-for-inflation-in-fiscal-year-2024-cbp-dec-23-08.) 

We highlight that these fees are a 

significant additional cost for many 

qualifying low-value shipments relative 

to the overall value of these goods. For 

example, roughly one-fifth (18.5 

percent) of qualifying low-value 

shipments have a declared value of $5 

or less and the majority of these 

shipments (61.5 percent) have a 

declared value of $25 or less. 

Examination of the magnitude of fees 

relative to the value of shipments 

currently claiming the administrative 

exemption, coupled with discussions 

with representatives of the customs 

broker and logistics community, suggest 

that shipment consolidation is a likely 

outcome of the proposed rule (see 

chapter 3 in the RIA available in the 

docket of this rulemaking for additional 

detail). We evaluate the uncertainty 

associated with an assumption about the 

likelihood of consolidation by modeling 

two separate scenarios, summarized 

below: 

• Low impact scenario. We assume 

that in order to mitigate additional fees, 

similar or identical Section 301 goods 

are consolidated into larger, bulk 

shipments, which would be entered 

using either entry type 01 or entry type 

11 and would be comprised of multiple 

pieces of identical items.35 As a result, 

the only increase in price experienced 

by consumers of goods subject to 

Section 301 duties is the duty because 

all fees are assumed to be fully 

mitigated.36 Certain shipments without 

Section 301 goods are also affected 

because they must provide an HTSUS 

code where none was required 

previously. Non-Section-301 shipments 

in the express environment using the 

basic entry process are consolidated to 

mitigate the fees paid to the broker for 

filing the entry with the HTSUS (i.e., 

similar to Section 301 goods, fees are 

assumed to be negligible, or $0). For 

express shipments that would use 

enhanced entry, and therefore already 

provide HTSUS codes, no change in 

entry mode occurs. Similarly, because 

this rule does not require an HTSUS 

code for postal shipments, postal 

shipments without Section 301 goods 

are also unaffected. 

• High impact scenario. In this 

scenario, we assume less consolidation 

occurs. Shipments without Section 301 

goods remain qualifying low-value 

shipments and pay a fee to a customs 

broker to file the entry with the HTSUS 

code. The fee ranges from $1 to $30 per 

shipment, depending on the carrier. 

Because the affected parties are hiring a 

broker to file the entry and assign an 

HTSUS code, they file an enhanced 

entry, rather than a basic entry.37 For 

shipments with Section 301 goods, we 

assume that the typical business 

relationship between non-express 

carriers and their clients supports 

consolidation of like items as a means 

of mitigating fees, which would result in 

these shipments being entered either 

using entry type 01 or entry type 11 (i.e., 

net fees, when combined with the 

potential savings in shipping costs 

associated with consolidation, are 

assumed to be negligible, or close to $0). 

However, we assume Section 301 

shipments transported by express 

carriers and the postal service remain 

unconsolidated and apply associated 

per shipment fees (i.e., broker/filing fees 

range from $8.55 to $30 per shipment, 

depending on the carrier, plus a MPF of 

$2.53 per shipment). 


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38As discussed in Point #7, these losses are likely 

to be regressive in nature, disproportionately 

affecting low-income and minority consumers. 

39OMB Circular No. A–4 (2023) requires agencies 

to estimate the present value and annualized 

impacts of a proposed rule by applying a 2 percent 

real discount rate. 

40We note that our estimate of the net effect of 

changes in consumer surplus and tariff revenue 

does not explicitly measure potential changes in 

producer surplus. The direction and magnitude of 

bias introduced to the net welfare estimate is 

uncertain. Please see Section 3.1 for additional 

discussion. 

41The historical evidence on tariff pass-through 

(and the related phenomenon of exchange rate passthrough) has suggested that the benefits from 

reduced tariffs are only partially passed through to 

consumers (i.e., foreign suppliers increase their 

prices in response to the tariff cut). More recent 

evidence focuses on the effect of the sharp increases 

in tariffs, primarily hitting Chinese imports, in 2018 

to 2019. In this episode, the estimated effects are 

very different. Fajgelbaum et al. (2020) finds 

complete pass-through of tariffs to import prices 

using product-level monthly import and export data 

from the U.S. Census Bureau, i.e., foreign supplier 

did not reduce their prices in response to the tariffs. 

These results are supported by more recent analyses 

by Chang et al. (2021) and Ma et al. (2021) (as cited 

in Fajgelbaum and Khandelwal 2021) and Amiti et 

al. (2020). These studies focus on the price of 

imported goods at the entry port. Cavallo et al. 

(2019) employs data from product-level data for 

several large U.S. retailers and finds tariffs were 

passed through almost fully to U.S. import prices 

at the entry port. However, the effects on resulting 

retail prices were muted, suggesting tariff incidence 

was largely born by U.S. retailers. Importantly, 

these studies evaluated the effects of the tariff on 

all imports, not just qualifying low-value 

shipments, which comprise a small percentage of 

imports in each product category. If a 

comprehensive tariff did not lower supply prices, 

a tariff affecting only a small percentage of the total 

is even less likely to lower supply prices. In this 

analysis, we assume that higher U.S. import prices 

at the entry port are passed on entirely to U.S. 

consumers, similar to the assumptions in 

Fajgelbaum and Khandelwal (2024). 42We highlight three reasons why evidence of full 

pass-through is accompanied by uncertainty. First, 

analysis of the recent tariff episode is drawn from 

a relatively short time window before the effects of 

the global pandemic and supply chain disruptions 

thoroughly confounded the ability to measure 

longer run effects carefully. This episode includes 

elements of what Fajgelbaum and Khandelwal term 

the ‘‘trade war’’ that are important because firms on 

both sides of the market were experiencing shocks 

to both supply (via traded inputs) and demand, 

making identification of the demand effects 

complicated. Further, a potential reason for 

complete pass-through of tariffs is that markets are 

slow to adjust to shocks: prices are locked in by 

previously negotiated contracts; and consumers of 

imported goods are slow to find alternative sources 

of supply. Second, while the recent episodes tend 

to find complete pass-through for most goods they 

examine, there is some heterogeneity in the 

response across firms and product sectors. This no 

doubt results from differences in market structure, 

response horizons, and substitution options in both 

supply and demand. As an example, Fajgelbaum 

and Khandelwal (2021) emphasizes that this work 

does not address how tariffs might change the 

selection of products to be imported, or the 

possibility that foreign suppliers might downgrade 

the quality of imported products while holding 

prices fixed. Finally, it should be said that while 

the evidence of complete tariff pass-through in the 

recent episode is very strong, it is also regarded as 

significantly puzzling and a subject for active 

research to uncover precisely why foreign supply 

prices were not more responsive. 

43 It is possible that there will also be an increase 

in producer surplus. See Section 3.1. 

44As noted earlier, our analysis focuses primarily 

on the overall societal effect of the proposed rule. 

It does not quantify the potential distributional 

effects associated with the incidence of the 

increased prices for affected goods and the 

incidence of revenue gains associated with the 

collection of tariff revenue; however, it describes 

the potential distributional effects of increased 

prices qualitatively in Section 3.4 and Appendix A. 

If more of the tariff is borne by foreign producers, 

price increases will be smaller, reducing the 

disproportionate impact on lower-income 

consumers. The potential for disproportionate 

impacts associated with tax policies designed to 

return tariffs to consumers also exists in such a 

scenario. 

45Fajgelbaum, P.D. and A. Khandelwal. (2024). 

‘‘The Value of De Minimis Imports.’’ National 

Bureau of Economic Research Working Paper No. 

32607. 

Results 

Results from the partial equilibrium 

analysis are as follows: 

1. Consumer surplus losses in 2025 

range from $10.0 billion (low scenario) 

to $18.2 billion (high scenario). These 

losses are largely explained by higher 

import prices faced by consumers. In 

both scenarios, tariffs raise the price of 

low-value shipments for the consumer. 

In the high scenario, these price 

increases are heightened due to broker 

fees and MPF applicable to many 

shipments. In addition, consumers 

experience a welfare loss associated 

with a reduction in import quantities 

resulting from these price increases. 

2. Tariff revenues increase in all years 

relative to the baseline. In 2025, $7.8 

billion in tariff revenues are generated 

in the low scenario, compared with $5.9 

billion in the high scenario. Because 

tariff revenues depend on the value of 

imported goods, the high scenario 

generates less revenue as consumer 

demand falls in response to the 

additional fees on many shipments. 

3. The proposed rule results in net 

decreases in welfare in the low scenario 

(¥$2.2 billion in 2025) and high 

scenario ($¥12.3 billion in 2025).38 For 

the 10 years following rule 

implementation, the present value of 

these welfare effects is a loss of $21.9 

billion in the low scenario and $121.9 

billion in the high scenario (assuming a 

2 percent real discount rate).39 The 

greater impacts in the high scenario 

result from the additional costs imposed 

on imported goods in the form of broker 

fees and merchandise processing fees.40

4. Tariff pass-through—the rate at 

which increased tariffs are passed on to 

consumers through higher prices—is a 

key parameter that influences all three 

partial equilibrium outputs presented in 

this report: consumer surplus, tariff 

revenues, and net welfare effects. 

Consistent with recent economic 

evidence on tariff pass-through, we 

assume full tariff pass-through to U.S. 

consumers in our main estimates.41 That 

is, consumers bear the full cost of 

increased tariffs as foreign suppliers do 

not adjust their supply prices. Given 

uncertainty in the rate of tariff passthrough, we calculated the ‘‘break-even’’ 

points where the net welfare effects are 

$0.42 In the low scenario, pass-through 

rates greater than 79 percent (including 

the 100 percent pass-through assumed 

in our main estimates) result in net 

welfare losses; lower pass-through rates 

would result in net welfare gains. In the 

high scenario, this break-even point is 

roughly 35 percent. In other words, if 

foreign producers reduce their prices by 

an amount equal to 21 percent of the 

tariff increase in the low scenario, or 65 

percent of the tariff increase in the high 

scenario, consumer surplus losses are 

offset by increased tariff revenue.43 44

5. Impacts are largely concentrated 

among qualifying low-value shipments 

containing Section 301 goods, which are 

subject to tariffs under the proposed 

rule. In the high scenario, we estimate 

additional costs for a subset of 

qualifying low-value shipments not 

containing Section 301 goods, which 

may be subject to additional broker fees 

to comply with the rule’s requirements 

to provide HTSUS codes. 

6. Apparel manufacturing comprises 

the majority (51.4 percent) of the value 

of qualifying low-value shipments. 

While the effects of the rule on each 

industry are not exactly proportional to 

its share of imports (due to differing 

demand elasticities and tariffs in each 

sector), the effects are concentrated 

among few industries comprising most 

affected imports. 

7. Distributional considerations: 

While data limitations hindered our 

ability to examine how the proposed 

rule may disproportionately impact 

some consumers, Fajgelbaum and 

Khandelwal (2024) 45 provide evidence 

that eliminating the administrative 

exemption entirely would 

disproportionately affect lower-income 

and minority consumers. In their paper, 

the authors explain that direct-toconsumer imports comprise a higher 

share of household spending for zip 

codes with lower incomes and lower 

shares of white households. Their 

analysis finds that consumers in the 

poorest zip codes lose 24.8 percent more 

consumer surplus than the 

representative consumer. In Appendix 

A in the standalone RIA, we provide 

additional detail on this study and its 


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applicability to our analysis of the 

proposed rule. 

8. Baseline growth in qualifying lowvalue imports is highly uncertain. In our 

main estimates, we assume that post2025 growth in qualifying low-value 

import values follows growth in real 

GDP. In essence, this implies that the 

value of qualifying low-value shipments 

would comprise the same share of 

overall GDP in each year from 2025 to 

2034. Growth in the low-value import 

sector, however, has considerably 

outpaced GDP in recent years. As a 

sensitivity analysis, we present a highgrowth scenario assuming 18.4 percent 

annual increases in qualifying low-value 

shipment value and associated welfare 

effects. This percentage corresponds 

with the growth in total low-value 

shipment values between 2023 and 2024 

and is generally reflective of growth 

since 2016. The resulting present value 

of welfare losses over the 10-year 

analysis period is approximately 

doubled relative to our main estimates: 

using a discount rate of 2 percent, we 

estimate $47.2 billion in net welfare 

losses in the low scenario and $262.5 

billion in net welfare losses in the high 

scenario. We note, however, that 

sustaining 18 percent growth in the 

value of qualifying low-value shipments 

may be implausible. 

Our primary estimates are presented 

in Table 3. Programming costs to the 

U.S. government associated with rule 

implementation are also considered. 

Over the 10-year period of our analysis, 

the present value cost of these software 

changes is approximately $460,000, 

assuming a discount rate of 2 percent. 

TABLE 3—PARTIAL EQUILIBRIUM ANALYSIS RESULTS: 2025–2034 MAIN RESULTS

[$Billions, 2024 dollars] 

Year 

Low impact scenario High impact scenario 

Consumer Tariff Welfare Consumer Tariff Welfare 

2025 ......................................................... ¥$10.0 $7.8 ¥$2.2 ¥$18.2 $5.9 ¥$12.3 

2026 ......................................................... ¥10.3 8.0 ¥2.2 ¥18.6 6.0 ¥12.5 

2027 ......................................................... ¥10.5 8.2 ¥2.3 ¥18.9 6.2 ¥12.8 

2028 ......................................................... ¥10.7 8.3 ¥2.3 ¥19.3 6.3 ¥13.0 

2029 ......................................................... ¥10.9 8.5 ¥2.4 ¥19.6 6.4 ¥13.2 

2030 ......................................................... ¥11.0 8.6 ¥2.4 ¥19.9 6.5 ¥13.4 

2031 ......................................................... ¥11.2 8.7 ¥2.5 ¥20.3 6.6 ¥13.7 

2032 ......................................................... ¥11.4 8.9 ¥2.5 ¥20.6 6.7 ¥13.9 

2033 ......................................................... ¥11.6 9.1 ¥2.5 ¥21.0 6.8 ¥14.2 

2034 ......................................................... ¥11.8 9.2 ¥2.6 ¥21.4 7.0 ¥14.4 

Total, undiscounted .......................... ¥109.4 85.4 ¥24.0 ¥197.9 64.5 ¥133.4 

Present value, 2% d.r. ..................... ¥99.9 78.0 ¥21.9 ¥180.8 58.9 ¥121.9 

Annualized, 2% d.r. .......................... ¥10.9 8.5 ¥2.4 ¥19.7 6.4 ¥13.3 

Note: Growth in the value of qualifying low-value shipments is assumed to match growth in real GDP from 2025 to 2034. When growth is assumed to match year-over-year growth in low-value shipments since 2016, net welfare losses in the low scenario are estimated at $47.2 billion 

and $262.5 billion in the high impact scenario. 

Incremental Benefits 

The proposed rule would preclude 

goods subject to specified trade or 

national security actions from claiming 

the administrative exemption, which 

would strengthen the effectiveness of 

the United States’ trade and national 

security actions. Moreover, the change 

in eligibility for the administrative 

exemption would significantly reduce 

the volume of qualifying low-value 

shipments, and to enforce this change in 

eligibility for the administrative 

exemption, CBP would require all lowvalue shipments entered through basic 

entry to provide an additional data 

element. Both the reduction in 

qualifying low-value shipments and the 

additional data would improve CBP’s 

ability to identify violative goods and 

prevent inadmissible merchandise from 

entering the United States. These 

benefits are described qualitatively 

below. 

Trade and National Security Actions 

First, the proposed rule would 

strengthen the effectiveness of United 

States’ trade and national security 

actions. Section 301 tariffs are meant to 

incentivize changes in foreign 

governments’ acts, policies, or practices. 

Additionally, specified trade and 

national security actions can be used to 

protect U.S. industries from injurious 

serious injury, or the threat thereof, 

caused by import surges, unreasonable 

or discriminatory practices, or adjust 

imports that threaten to impair national 

security. Allowing these goods to be 

imported without assessing the Section 

301 tariff that would otherwise be 

applicable undermines this effort. 

Excluding these goods from the 

administrative exemption and requiring 

additional data will allow CBP officers 

to assess additional duties, specified in 

an applicable trade or national security 

action. 

By increasing tariff revenue, this rule 

would help accomplish the goals of the 

tariff actions. The largest effect would 

be on goods subject to Section 301 

tariffs. Based on a random sample of 

6,238,717 type 86 entries in fiscal year 

2023, we estimate that 77 percent of the 

total value of all ET86 entries covered 

goods subject to tariffs imposed under 

Section 301. According to CBP statistics, 

the total value of all imports claiming 

the administrative exemption in FY 

2023 was $54.6 billion. We assume that 

the share of the total value of qualifying 

low-value shipments containing goods 

subject to Section 301 tariffs was the 

same for entries entered under the 

‘‘release from manifest’’ process as 

compared to type 86 entries. With this 

assumption, we estimate that the total 

value of all qualifying low-value 

shipments that would have been subject 

to Section 301 tariffs in fiscal year 2023 

was $41.1 billion. The total value of 

type 01 and 11 entries covered by 

Section 301 tariffs that same year was 

$215.9 billion. Hence, we estimate that 

qualifying low-value shipments made 

up 16.0 percent of the total value of 

goods covered by Section 301 tariffs. 

This rule would therefore strengthen the 

incentive for China to eliminate its acts, 

policies, and practices related to 

technology transfer, intellectual 

property, and innovation that are 

unreasonable or discriminatory and 

burden or restrict U.S. commerce. 


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46For context, in 2023, 68.1 million U.S. workers 

separated from their job, either voluntarily or 

involuntarily. But in 2023, 70.8 million workers 

were hired at new jobs, leading to the economy 

adding about 2.7 million jobs on net. These 

estimates suggest that if the proposed rule had been 

first active in 2023, the economy would have added 

about 2.6 million jobs on net instead. 

Targeting of Violative Shipments 

In addition to the primary benefit of 

this regulation, strengthening U.S. trade 

and national security actions, the 

proposed rule will also support CBP’s 

efforts to identify and intercept items 

violating import laws and regulations. 

The proposed rule would require all 

shipments claiming the administrative 

exemption under 19 U.S.C. 

1321(a)(2)(C), entered under either the 

proposed new basic or the proposed 

new enhanced entry process, to provide 

a 10-digit HTSUS classification for the 

merchandise within the shipment. In 

the absence of the proposed 

modification to the rule as proposed in 

the ELVS NPRM, basic entries would 

not be required to provide 10-digit 

HTSUS classifications. This additional 

data element would allow CBP to more 

effectively target and screen basic 

entries in order to identify violative 

shipments (e.g., prohibited items that 

are not allowed to enter the United 

States and other items ineligible for 

entry under the administrative 

exemption). CBP seizure statistics show 

that low-value shipments pose a 

security concern when compared to 

type 01 and 11 entries. In particular, 

CBP finds that goods claiming the 

administrative exemption have higher 

seizure rates for narcotics, IPR 

violations, and prohibited items than 

goods entered through entry type 01 and 

11. See Section 5 of the standalone RIA 

for more details on the security 

concerns posed by low-value shipments. 

Imports claiming the administrative 

exemption made up 87 percent of total 

seizures in fiscal year 2023. 

Macroeconomic and Distributional 

Effects 

We estimate the macro-economic and 

distributional effects of the proposed 

rule using USAGE–TERM, a computable 

general equilibrium (CGE) model of the 

United States. At its most disaggregate 

level USAGE–TERM tracks variables 

like inputs, output, employment, 

investment, trade, and prices for 513 

sectors in 70 regions across the U.S. A 

summary of the results of the CGE 

analysis follows: 

• In the low impact scenario, we 

estimate that the average price of 

imported goods would be 0.29% higher. 

We estimate that consumer prices 

would be 0.10% higher in year 1 and 

0.12% higher in year 10. 

• We estimate consumer welfare 

losses of $9.5 billion in year 1, shrinking 

to $6.7 billion in year 10. 

• We estimate a decrease in GDP, 

compared to the baseline, of 0.03% in 

both year 1 and year 10. 

• Sectors that benefit from the 

proposed rule, like apparel, textiles, and 

leather, would see job growth. These 

sectors would employ 5,900 more 

people in year 1, and 3,900 more people 

in year 10 compared to the baseline. 

• We did not explicitly model the 

impacts on the logistics and express 

sectors. To the extent that consumers 

use more logistics and express services 

we would expect these sectors to benefit 

from the proposed rule. 

• These job gains, which could be a 

result of new jobs being created or fewer 

job separations, would be offset by a net 

reduction of jobs in other sectors. On 

net, the U.S. economy would have 

97,000 fewer jobs in year 1, due to an 

increase in job separations and a 

reduction in new hires. By year 10 the 

economy would return to full 

employment.46

• In the high impact scenario, we 

estimate that the average price of 

imported goods would be 0.51% higher. 

We estimate consumer prices would be 

0.17% higher in year 1 and 0.21% 

higher in year 10. 

• In the high impact scenario, we 

estimate consumer welfare losses of 

$16.5 billion in year 1, shrinking to 

$11.6 billion in year 10. 

• We estimate a decrease in GDP, 

compared to the baseline growth of 

GDP, compared to the baseline, of 

0.06% in year 1 and 0.05% in year 10. 

• Sectors that benefit from the 

proposed rule, like apparel, textiles, and 

leather, would see job growth. These 

sectors would employ 9,700 more 

people in year 1, and 6,400 more people 

in year 10 compared to the baseline. 

• These job gains would be offset by 

fewer jobs in other sectors. On net, the 

U.S. economy would have 136,000 

fewer jobs in year 1, due to an increase 

in job separations and a reduction in 

new hires. By year 10 the economy 

would return to full employment. 

B. Additional Requirements for 

Regulatory Analysis 

Table 4 provides a cost accounting 

statement for the proposed rule. 

Estimates correspond to the low-impact 

scenario based on our understanding 

that many low-value shipments are 

likely to be consolidated under the 

proposed rule to lessen costs associated 

with fees. Therefore, CBP considers the 

low-impact scenario as the primary 

estimate of the impact of this proposed 

rule. 

TABLE 4—A–4 ACCOUNTING STATEMENT FOR THE PROPOSED RULE

Category Annualized estimate 

(in 2024 dollars) Source citation 

Benefits 

Monetized benefits .................................. None ...................................................................................................................... RIA, Chapter 5. 

Quantified, non-monetized benefits ........ None.

Qualitative (unquantified) benefits .......... Greater enforcement/effectiveness by requiring goods with 232, 201, and 301 

duties to utilize entry types subject to duty payment. Improved targeting of 

violative shipments by requiring certain qualifying low-value shipments to 

provide HTSUS codes that describe the contents of the entry. In certain 

cases, CBP estimates that consolidation of shipments would lead to faster 

merchandise release, enhanced national security and improved health and 

safety.

Costs 

Monetized costs ...................................... $10.9 billion (low scenario) or $19.7 billion (high scenario) in consumer surplus 

loss.

RIA, Chapter 3. 

Quantified, non-monetized costs ............ None.


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TABLE 4—A–4 ACCOUNTING STATEMENT FOR THE PROPOSED RULE—Continued 

Category Annualized estimate 

(in 2024 dollars) Source citation 

Qualitative (unquantified) costs ............... None.

Cost Savings Monetized costs ................ None.

Quantified, non-monetized cost savings None.

Qualitative (unquantified) cost savings ... None.

Transfers 

Monetized budgetary transfers ............... None ...................................................................................................................... RIA, Chapter 3. 

Other monetized transfers ...................... $8.5 billion (low scenario) or $6.4 billion (high scenario) in additional duty revenue, paid for by U.S. consumers assuming full pass-through by foreign producers and returned to consumers to offset consumer surplus loss.

Distributional Effects 

Effects on State, local, and/or tribal governments.

Effects on small businesses ...................

The proposed rule affects consumers, which could include anyone in the 

United States, including businesses, not-for-profit organizations, government 

jurisdictions, as well as individuals. As a result, a substantial number of small 

entities are likely to be affected. Prices for an individual affected low-value 

shipment could increase by 12.2 to 31.2 percent, depending on whether only 

tariffs or tariffs plus broker fees are incurred, the type of carrier transporting 

the shipment into the United States, and the underlying value of the shipment. Lacking readily-available information describing the number of qualifying low- value shipments and their value imported annually by small entities, CBP cannot certify this rule under the Regulatory Flexibility Act at this 

time. Instead, it conducts an Initial Regulatory Flexibility Analysis (IRFA).

RIA, Chapter 6. 

Effects on inflation ................................... Inflation increases by between 0.1% and 0.17% in year 1 .................................. RIA, Chapter 4. 

Effects on growth .................................... GDP growth is 0.03% lower in year 1 .................................................................. RIA, Chapter 4. 

Note: Present value calculations use 2025 as the base year. Costs are annualized over 10 years from 2025 to 2034 and reflect a 2 percent 

discount rate. 

C. Regulatory Flexibility Act 

The Regulatory Flexibility Act of 1980 

(5 U.S.C. 601 et. seq.) (RFA), as 

amended by the Small Business 

Regulatory Enforcement Fairness Act of 

1996 (SBREFA), requires agencies to 

assess the impact of regulations on 

small entities. A small entity may be a 

small business (defined as any 

independently owned and operated 

business not dominant in its field that 

qualifies as a small business per the 

Small Business Act); a small not-forprofit organization; or a small 

governmental jurisdiction (locality with 

fewer than 50,000 people). 

Under the requirements of the RFA, as 

amended by SBREFA and Executive 

Order 13272 entitled ‘‘Proper 

Consideration of Small Entities in 

Agency Rulemaking,’’ agencies must 

consider the potential impact of 

proposed regulations on small 

businesses, small governmental 

jurisdictions, and small organizations 

during the development of their rules. 

Specifically, CBP is required to 

prepare an RFA analysis and take other 

steps to assist small entities, unless it 

certifies that the rule will not have a 

‘‘significant economic impact on a 

substantial number of small entities.’’ 

The Small Business Administration 

(SBA) provides guidelines on the 

analytical process used to assess the 

impact of a particular rulemaking on 

small entities. Generally, an agency first 

conducts a threshold analysis to 

determine whether it can certify the 

proposed rule. The threshold analysis 

provides the factual basis for such a 

determination. If the results of the 

threshold analysis indicate that a rule 

may have a significant impact on a 

substantial number of small entities, or 

if the agency is uncertain, it is required 

to prepare an Initial Regulatory 

Flexibility Analysis (IRFA) and publish 

the IRFA for public comment with the 

proposed rule. The analytic components 

of an IRFA are: 

1. A description of the reasons why 

action by the agency is being 

considered; 

2. A succinct statement of the 

objectives of, and legal basis for, the 

proposed rule; 

3. A description of, and, where 

feasible, an estimate of the number of 

small entities to which the proposed 

rule will apply; 

4. A description of the projected 

reporting, record-keeping and other 

compliance requirements of the 

proposed rule, including an estimate of 

the classes of small entities that will be 

subject to the requirement and the type 

of professional skills necessary for 

preparation of the report or record; 

5. An identification, to the extent 

practicable, of all relevant Federal rules 

which may duplicate, overlap or conflict 

with the proposed rule; 

6. A description of any significant 

alternatives to the proposed rule that 

accomplish the stated objectives of 

applicable statutes and that minimize 

any significant economic impact of the 

proposed rule on small entities, such as, 

• the establishment of differing 

compliance or reporting requirements or 

timetables that take into account the 

resources available to small entities; 

• the clarification, consolidation, or 

simplification of compliance and 

reporting requirements under the rule 

for such small entities; 

• the use of performance rather than 

design standards; and, 

• an exemption from coverage of the 

rule, or any part thereof, for such small 

entities. 

This section presents data and 

analysis in support of these 

requirements. First, we provide an 

overview of the proposed rule, and then 

we conduct the threshold analysis in 

Section 6.2 of the RIA. Because the 

significance of impacts of the proposed 

rule on small entities is uncertain, we 

also prepare an IRFA in Section 6.3 of 

the RIA. 

Overview of the Proposed Rule 

This proposed rule makes 

merchandise subject to an ad valorem 

tariff pursuant to a trade or national 


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47Proportion of qualifying low-value shipments 

containing Section 301 textile and apparel items is 

calculated using data on type 86 entries provided 

by CBP via email on August 14, 2024. We assume 

that qualifying low-value shipments cleared off the 

manifest are similar in nature to goods using type 

86 entry. 

48See Chapter 5 of the RIA available in the docket 

of this rulemaking for sources and estimation 

method. 

49See the ELVS Regulatory Analysis supporting 

the NPRM. 

security action under Section 232, 201, 

or 301 ineligible for the administrative 

exemption in 19 U.S.C. 1321(a)(2)(C). 

Such shipments would instead need 

to be entered through an alternate entry 

type, such as entry type 01 (formal) or 

entry type 11 (informal). Importers of 

such goods would then have to pay both 

the additional duties owed under a 

specified trade or national security 

action and regular customs duties, if 

applicable, when the value is below 

$800. To enable CBP to determine 

which entries are ineligible, CBP would 

require a 10-digit Harmonized Tariff 

Schedule of the United States (HTSUS) 

classification for all shipments of 

merchandise entered using the basic or 

enhanced entry processes proposed in 

the ELVS NPRM and claiming the 

administrative exemption. In the ELVS 

NPRM, CBP proposed to require that 

HTSUS codes be collected for qualifying 

low-value shipments entered through an 

enhanced entry process. Modifying 

these changes proposed in ELVS, this 

Trade and National Security Actions 

and Low-Value Shipments NPRM 

would expand that requirement to lowvalue shipments entered through the 

basic entry process proposed in ELVS, 

by requiring the provision of a 10-digit 

HTSUS code(s) on the bill of lading or 

other entry document. 

This proposed rule would strengthen 

the United States’ trade and national 

security actions, especially for Section 

301 tariffs. For example, the goal of the 

current Section 301 tariffs is to 

discourage China’s acts, policies, and 

practices related to technology transfer, 

intellectual property, and innovation 

that are unreasonable or discriminatory 

and burden or restrict U.S. commerce. 

Additionally, trade and national 

security actions can be used to protect 

domestic industries from substantial 

threat of serious injury, or the threat 

thereof by import surges or adjust 

imports that threaten to impair national 

security. An industry that is particularly 

vulnerable to circumvention by 

qualifying low-value shipments is the 

U.S. textile and apparel manufacturing 

industry. A large volume of textile and 

apparel imports claim the 

administrative exemption thereby 

avoiding tariffs. Specifically, 

approximately 50 percent of the value of 

current qualifying low-value shipments 

is attributed to textiles and apparel that 

would otherwise be subject to 

additional duties under Section 301.47

Broadly speaking, an estimated 15.9 

percent of imports covered by Section 

232, 201, and 301 tariffs are exempt 

from the additional tariffs under the 

administrative exemption.48 By 

including imports that would have been 

eligible for the administrative 

exemption without this rule, CBP would 

increase the effectiveness of these 

specified trade and national security 

actions. These actions would help 

protect national security and discourage 

unreasonable or discriminatory 

practices. 

This rule would also increase CBP’s 

inspection efficiency by shifting a large 

share of low-value shipments into 

alternative entry types. Qualifying lowvalue entries are more challenging for 

CBP to efficiently inspect than other 

entry types because they arrive with 

more limited data. As a result, CBP 

officers must do more work to ensure a 

low-value shipment is admissible and 

otherwise complies with applicable U.S. 

trade laws and regulations. Shipments 

entered using entry type 01 or entry 

type 11, in contrast, arrive with more 

detailed information about the contents 

of the goods included in the shipment. 

Furthermore, shifting low-value 

shipments to an alternative entry type is 

likely to result in consolidation of 

multiple items into a single shipment. 

Specifically, the $800 limit for 

qualifying low-value shipments 

incentivizes importers to de-consolidate 

goods into numerous low-value 

shipments to avoid paying tariffs. 

Absent the ability to avoid tariffs, 

importers are likely to be incentivized to 

reduce per-unit shipping costs by 

consolidating items in bulk shipments. 

This consolidation results in fewer, 

higher value entries, where multiple 

items can be reviewed by CBP officers 

at the same time. 

Finally, the proposed rule is likely to 

improve CBP’s ability to accurately 

identify the contents of a shipment 

claiming the administrative exemption 

even if it does not contain goods subject 

to a trade or national security action 

under Section 232, 201, or 301. Many of 

these goods currently use manifest 

clearance to enter the United States. The 

‘‘release from manifest’’ entry process 

(or the proposed new basic entry) is (or 

would be) less costly for importers, 

because less information is submitted to 

CBP, but the release of shipments by 

CBP is slower, averaging 3 days.49 In 

contrast, shipments using entry types 01 

or 11, or the current entry type 86 (or 

the proposed new enhanced entry), are 

(or would be) typically released by CBP 

within 1 day. This proposed rule would 

require a 10-digit HTSUS classification 

for all basic entry shipments. As a 

result, importers will likely opt for 

enhanced entry, with its faster clearance 

times, given that the difference in 

administrative costs between basic and 

enhanced will become negligible. 

Having the HTSUS classification, along 

with several additional data elements 

required for enhanced entry, will 

improve CBP’s ability to identify 

violative shipments. Furthermore, 

because enhanced entry is an automated 

process with required data elements 

being submitted in advance of the 

shipment’s arrival in the United States, 

additional efficiency gains for CBP 

officers and importers are likely. 

Threshold Analysis 

A threshold analysis conducted 

pursuant to RFA/SBREFA involves 

determining whether the proposed 

regulatory changes will significantly 

impact a substantial number of small 

entities subject to the regulation. 

Responding to this question requires 

understanding both: (1) the number of 

affected entities that are small; and (2) 

the economic impact on these small 

entities in the context of the proposed 

regulatory action. 

Should the proposed rule go into 

effect, entities could be affected in two 

ways: 

1. Imports subject to a trade or 

national security action under Section 

232, 201, or 301 would no longer qualify 

for the administrative exemption in 19 

U.S.C. 1321(a)(2)(C), which allows a 

shipment to be imported duty-free when 

the aggregate fair retail value in the 

country of shipment for articles 

imported into the United States on the 

same day and exempted from the 

payment of duty does not exceed the 

administrative exemption limit of $800 

per person per day. Consignees (i.e., 

consumers) of these imports will pay 

higher prices for the goods resulting 

from tariffs and, possibly, additional 

processing fees. 

2. Paperwork for other imported 

goods using the administrative 

exemption will need to include HTSUS 

codes to facilitate CBP’s ability to 

confirm that the goods are not covered 

by Section 232, 201, or 301 tariffs. 

Consignees of these imports will pay 

higher prices for the goods resulting 

from additional processing fees assessed 

by CBP and by licensed customs 

brokers. 


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50To detect businesses, CBP looked for entities 

that used the following key terms in their names: 

Inc., Co., LLC. Individuals with these letter 

combinations in their names were later manually 

screened out of the sample. CBP did not attempt to 

identify not-for-profit organizations or 

governmental jurisdictions in its consignee data. 

(Personal communication between IEc and CBP on 

July 6, 2023.) 

51 Data pulled from ACE Reports on June 13, 2023 

representing all consignees of type 86 entries on 

January 1, 2023. CBP provided the cleaned data to 

IEc via email on June 23, 2023. 

52This process relies on D&B Hoovers’ automated 

search functions to identify the business profiles 

associated with a list of businesses, not manual 

business-by-business searching. This search 

functionality is described in more detail in D&B 

Hoovers (2019, p. 25). This resource is available at 

https://app.dnbhoovers.com/product/wp-content/ 

uploads/2020/10/DB-Hoovers-User-Guide-920.pdf. 

53 D&B Hoovers contains data fields for both 

‘‘employees at single site’’ and ‘‘employees at all 

sites.’’ When both numbers are provided, we default 

to using the ‘‘employees at all sites’’ entry in order 

to capture the size of the larger parent company. 

When only the ‘‘employees at single site’’ 

information is available, we use that entry instead. 

54The matched data was downloaded from D&B 

Hoovers on July 27, 2023, accessed via: 

app.dnbhoovers.com/login. We assume all data to 

be in 2023 dollars, consistent with the download 

date. 

55 In some cases, SBA provides a size standard for 

the NAICS code as well as an ‘‘exception’’ for a subset of businesses with specific activity types. This 

analysis does not consider the ‘‘exceptions’’ when 

classifying businesses as small. 

Judicial review of agency compliance 

with the RFA requirements limits the 

scope of regulatory flexibility analyses 

to directly regulated entities (SBA 

2017). In the case of the proposed rule, 

the entities that would have claimed the 

administrative exemption absent the 

proposed rule are considered directly 

regulated and therefore the subject of 

the threshold analysis. Here, consignees 

(i.e., consumers) are the entities or 

individuals potentially eligible for the 

administrative exemption. As described 

in detail in Section 3.4 of the RIA, we 

assume that all duties and fees are 

incurred directly by consignees. 

Consistent with the scenarios 

evaluated in the above sections, this 

section conducts the threshold analysis 

under two scenarios meant to act as 

upper and lower bounds of the effects 

of this proposed rule. These scenarios 

highlight the uncertainty regarding how 

importers will respond to the rule 

requirements: 

• Low Impact Scenario: All importers 

respond to avoid fees. Importers of 

Section 232, 201, and 301 goods 

consolidate while importers of goods 

not subject to specified trade or national 

security actions either consolidate or 

move to postal. In this scenario, price 

increases are limited to required tariffs, 

because all other fees are assumed to be 

fully mitigated. 

• High Impact Scenario: In this 

scenario, less consolidation of 

shipments occurs. As a result, in 

addition to tariffs, prices are also 

affected by higher fees. See Sections 

3.3.1 and 3.3.2 of the RIA for detailed 

descriptions of the price shocks under 

each scenario. 

Substantial Test 

This section explores whether a 

substantial number of affected entities 

are small. The RFA does not provide a 

definition of a ‘‘substantial number.’’ In 

its guide to government describing how 

to comply with the RFA, the SBA states: 

‘‘Substantial number’’ depends on the 

number of regulated entities and the 

size of the regulated industry. The 

interpretation of the term ‘‘substantial 

number’’ is not likely to be five small 

firms in an industry with more than 

1,000 small firms. On the other hand, it 

is important to recognize that five small 

firms in an industry with only 20 firms 

would be a substantial number. 

Depending on the rule, the 

substantiality of the number of small 

businesses affected should be 

determined on an industry-specific 

basis and/or on the number of small 

businesses overall. (SBA 2017, p. 21.) 

This analysis evaluates the extent to 

which a substantial number of 

consignees that would become ineligible 

for the administrative exemption due to 

the proposed rule are small entities. 

Affected consignees could be anyone in 

the United States—including 

businesses, not-for-profit organizations, 

and government jurisdictions as well as 

individuals—that purchases a good 

valued at $800 or less from a retailer 

that manufactures products outside of 

the United States. Individuals are not 

‘‘entities’’ as defined by the RFA, and 

thus are excluded from this analysis. 

All small entities in the United States 

have the potential to be affected by the 

proposed rule. As described in Chapter 

3 of the standalone RIA document, the 

proposed rule affects products produced 

by 19 industries defined at the 3-digit 

North American Industry Classification 

System (NAICS) sector, with more than 

half of the affected goods coming from 

the apparel industry. Ideally, this 

analysis would rely on all historical 

low-value shipment transactions to 

characterize the entities most likely to 

be affected by the proposed rule. In the 

absence of that information, we 

characterize which industries are most 

likely to be affected, and which portion 

of consignees may be small entities, 

using data on consignees who imported 

goods using type 86 entries over the 

course of an example day in fiscal year 

2023. This analysis relied on the 

following steps: 

1. Identify a sample of businesses that 

are consignees. As noted above, we rely 

on a sample of shipments using type 86 

entry for one day in fiscal year 2023 as 

a representative sample of consignees 

importing qualifying low-value 

shipments absent this rule. On this date, 

CBP identified nearly 1.2 million 

consignees associated with 

approximately 1.6 million type 86 

entries. Within this list, CBP detected 

786 likely businesses based on the 

names provided in the ‘‘header party’’ 

field and randomly selected 394 of these 

businesses for analysis.50 51

2. Obtain the business profiles of the 

consignees. We uploaded the names and 

location information for the 394 

businesses to D&B Hoovers’ website and 

relied on D&B Hoovers’ proprietary 

algorithm to match entities with the 

information stored in its database.52 For 

the 394 businesses in our sample, D&B 

Hoovers’ search functionality was able 

to match profiles for 182 entities (46 

percent). The 212 unmatched 

consignees either do not have business 

profiles in D&B Hoovers or the owner’s 

name and location information provided 

by CBP do not match the business 

records on the site. For the 182 matched 

entities, we collect primary NAICS 

code, number of employees,53 and 

annual revenue information as 

presented in D&B.54

3. Determine which businesses in the 

sample are small businesses. We 

compare number of employees and 

annual revenues with the SBA’s 

definitions of small business associated 

with each six-digit NAICS code (SBA 

2023).55

The 182 businesses in the sample are 

associated with 117 NAICS codes (6- 

digit) spanning many sectors. Table 5 

provides a sample of NAICS codes 

represented by the consignee businesses 

to demonstrate the breadth of industries 

associated with type 86 entries on a 

given day. As shown in Table 6, the 

consignees organize into nearly every 2- 

digit sector NAICS code. Using the 6- 

digit NAICS codes for classification 

purposes, 92 percent of businesses in 

the sample qualify as small businesses. 

Data from CBP does not identify the 

type of good associated with the 

consignees, therefore we are unable to 

differentiate between entities that would 

be affected by Section 301 tariffs (in 

both the low scenario and high scenario) 

and all other entities that would be 

affected by fees in the high scenario 

only. 

Taken together, this analysis finds 

that a substantial number of small 

entities may be affected by the proposed 

rule. 


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TABLE 5—EXAMPLE NAICS CODES AMONG SAMPLED CONSIGNEES

NAICS code Industry 

111998 ................................. All Other Miscellaneous Crop Farming. 

221118 ................................. Other Electric Power Generation. 

236115 ................................. New Single-family Housing Construction. 

238340 ................................. Tile and Terrazzo Contractors. 

238910 ................................. Site Preparation Contractors. 

238990 ................................. All Other Specialty Trade Contractors. 

311615 ................................. Poultry Processing. 

325199 ................................. All Other Basic Organic Chemical Manufacturing. 

325412 ................................. Pharmaceutical Preparation Manufacturing. 

325510 ................................. Paint and Coating Manufacturing. 

325910 ................................. Printing Ink Manufacturing. 

332312 ................................. Fabricated Structural Metal Manufacturing. 

332322 ................................. Sheet Metal Work Manufacturing. 

332710 ................................. Machine Shops. 

333310 ................................. Commercial and Service Industry Machinery Manufacturing. 

335313 ................................. Switchgear and Switchboard Apparatus Manufacturing. 

339940 ................................. Office Supplies (except Paper) Manufacturing. 

423110 ................................. Automobile and Other Motor Vehicle Merchant Wholesalers. 

423120 ................................. Motor Vehicle Supplies and New Parts Merchant Wholesalers. 

423110 ................................. Automobile and Other Motor Vehicle Merchant Wholesalers. 

423120 ................................. Motor Vehicle Supplies and New Parts Merchant Wholesalers. 

423110 ................................. Automobile and Other Motor Vehicle Merchant Wholesalers. 

445110 ................................. Supermarkets and Other Grocery Retailers. 

449110 ................................. Furniture Retailers. 

449210 ................................. Electronics and Appliance Retailers. 

531311 ................................. Residential Property Managers. 

532111 ................................. Passenger Car Rental. 

541618 ................................. Other Management Consulting Services. 

561730 ................................. Landscaping Services. 

611110 ................................. Elementary and Secondary Schools. 

811111 ................................. General Automotive Repair. 

811192 ................................. Car Washes. 

812112 ................................. Beauty Salons. 

812910 ................................. Pet Care (except Veterinary) Services. 

Note: The NAICS codes presented in this table represent a sample of industries associated with entry type 86 consignees on a typical recent 

date, not a comprehensive list of all affected industries. See the main text for details. 

TABLE 6—NUMBER OF SMALL BUSINESSES IN SAMPLE OF CONSIGNEES

Two-digit 

NAICS code a Sector 

Total 

businesses 

in sample 

Small 

businesses 

in sample 

Percent 

small 

11 ........................ Agriculture, Forestry, Fishing and Hunting ................................................ 1 1 100 

22 ........................ Utilities ........................................................................................................ 2 2 100 

23 ........................ Construction ............................................................................................... 11 11 100 

31 ........................ Manufacturing ............................................................................................. 2 1 50 

32 ........................ Manufacturing ............................................................................................. 7 6 86 

33 ........................ Manufacturing ............................................................................................. 17 16 94 

42 ........................ Wholesale Trade ........................................................................................ 14 12 86 

44 ........................ Retail Trade ................................................................................................ 23 22 96 

45 ........................ Retail Trade ................................................................................................ 8 8 100 

48 ........................ Transportation and Warehousing ............................................................... 5 5 100 

49 ........................ Transportation and Warehousing ............................................................... 1 1 100 

51 ........................ Information ................................................................................................. 5 5 100 

52 ........................ Finance and Insurance .............................................................................. 1 1 100 

53 ........................ Real Estate and Rental and Leasing ......................................................... 5 5 100 

54 ........................ Professional, Scientific, and Technical Services ....................................... 21 20 95 

55 ........................ Management of Companies and Enterprises ............................................ 2 1 50 

56 ........................ Administrative and Support and Waste Management and Remediation 

Services.

9 7 78 

61 ........................ Educational Services .................................................................................. 2 1 50 

62 ........................ Health Care and Social Assistance ........................................................... 5 4 80 

72 ........................ Accommodation and Food Services .......................................................... 6 5 83 

81 ........................ Other Services (except Public Administration) .......................................... 18 17 94 

99 ........................ Unclassified b .............................................................................................. 17 17 100 

Total ............. ..................................................................................................................... 182 168 92 

Sources: IEc analysis of 182 businesses named as consignees of type 86 entries for one day in 2023 (provided by CBP), business profiles 

from D&B Hoovers, and SBA small business size standards (SBA 2023). See text for details. 

Notes: 


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1. While 2-digit NAICS codes are used for presentation purposes, the 6-digit NAICS codes were used to determine which businesses are 

small. 

2. All businesses identified with NAICS code 999990 in D&B Hoovers are presumed small. 

Significance Test 

This section tests whether the effects 

of the rule would be significant for the 

small entities identified above. The RFA 

does not define a ‘‘significant effect’’ in 

quantitative terms. In its guidance to 

agencies on how to comply with the 

RFA, SBA states, 

[i]n the absence of statutory 

specificity, what is ‘significant’ will vary 

depending on the economics of the 

industry or sector to be regulated. The 

agency is in the best position to gauge 

the small entity impacts of its 

regulation. (SBA 2017, p. 18.) 

DHS component agencies typically 

assume that an annual per entity cost 

exceeding 1 percent of the annual gross 

revenues for that entity is significant 

(Houser 2012). Therefore, this analysis 

considers the 1 percent threshold when 

analyzing these potential impacts. 

To accurately assess whether small 

entity consignees are likely to be 

significantly affected by the rule 

requires data on the total volume of 

affected shipments each entity is likely 

to purchase. Data describing total 

historical qualifying low-value 

shipment volume for the 168 small 

businesses in the sample of consignees 

provided by CBP is not readily 

available. Instead, we compare the value 

of the shipments with the percent 

increase in cost considering Section 301 

tariffs (for the low and high scenarios) 

as well as the increased fees associated 

with entry (for the high scenario only). 

While the value of a shipment is not a 

measure of revenue, it provides a proxy 

for the capacity of entities to absorb the 

potential increases in shipment costs. 

Low Impact Scenario 

In the low impact scenario, qualifying 

low-value shipments formerly claiming 

the administrative exemption incur 

tariffs averaging 21.25 percent on an ad 

valorem basis (see Chapter 3 in the 

standalone RIA available in the docket 

of this rulemaking). As described in 

Chapter 3, we assume consignees incur 

100 percent of the tariff. Table 7 

presents the distribution of affected 

shipments by shipment value, using 

entry type 86 shipments imported in 

fiscal year 2023 as a representative 

sample (i.e., the exact distribution may 

differ for shipments cleared off the 

manifest that would have entered with 

an administrative exemption in the 

baseline). 

TABLE 7—DISTRIBUTION OF QUALIFYING LOW-VALUE SHIPMENTS BY SHIPMENT VALUE

Shipment value bin Mid-point of shipment 

value 

% of total entry type 

86 shipments 

$0–$5 ............................................................................................................................... $2.50 18.5 

$6–$25 ............................................................................................................................. 15.50 43.0 

$26–$50 ........................................................................................................................... 38.00 20.0 

$51–$75 ........................................................................................................................... 63.00 8.4 

$76–$100 ......................................................................................................................... 88.00 4.7 

$101–$200 ....................................................................................................................... 150.50 4.7 

Over $200 ........................................................................................................................ 500.50 0.8 

Source: IEc analysis of data provided by email from CBP on September 9, 2024. 

Using the mid-point of shipment 

value for each bin, the weighted average 

value per shipment is approximately 

$32. Applying the tariff rate likely to be 

incurred by consignees, we find that the 

increased cost per shipment is 

approximately $6.80 (21.25 percent of 

$32). We do not have readily available 

data on the number of affected 

shipments imported annually per entity. 

Therefore, it is uncertain whether tariff 

rates of this magnitude impose a 

significant impact on small entities 

importing these affected shipments 

under the low scenario. However, a 

21.25 percent increase in the cost of 

importing affected goods represents a 

significant impact relative to the value 

of the shipment. 

High Impact Scenario 

In the high impact scenario, 

consignees of affected low-value 

shipments experience price increases 

resulting from the tariffs described 

above in the low impact scenario. 

Additionally, some consignees incur 

additional price increases resulting from 

fees required to file and process 

shipments (for a detailed description see 

Chapter 3 in the standalone RIA 

available in the docket of this 

rulemaking). Table 8 summarizes the 

additional per shipment fees that might 

be incurred, depending on the carrier 

providing shipping services. None or 

some combination of these fees apply, 

depending on whether the shipment 

includes a good subject to additional 

Section 232, 201, or 301 duties, and 

whether a broker is already involved in 

the shipping process in the baseline. 

TABLE 8—PER SHIPMENT FEES

Type Fee 

($/shipment) 

Broker fee: 1

Commercial non-express carrier 2 ................................................................................................................................................ $1.00 

Express commercial carrier 3 ........................................................................................................................................................ 30.00 

Postal carrier 3 .............................................................................................................................................................................. 8.55 

Merchandise Processing Fee: 4

All .................................................................................................................................................................................................. 2.53 

Sources and assumptions: 


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1A licensed broker is not currently required for the ‘‘release from manifest’’ entry process, nor would the ELVS NPRM require one for the basic 

entry process if the ELVS NPRM is finalized as proposed. We assume for the purposes of this analysis that a broker fee is charged for any entry 

requiring an HTSUS code and is similar regardless of whether the filer uses enhanced entry, entry type 86, 01, or 11. (Source: Personal communication with representatives of a major broker association on 9/26/2024.) 2Email from CBP dated 10/11/2024. 

3Fajgelbaum and Khandelwal (2024). 

4 Minimum merchandise processing fee for informal entries as of October 1, 2023. (As viewed on 10/11/2024 on https://

www.federalregister.gov/documents/2023/07/28/2023-16197/cobra-fees-to-be-adjusted-for-inflation-in-fiscal-year-2024-cbp-dec-23-08.) Informal 

entries apply to shipments that do not exceed $2,500 and is the entry option most likely to be used for shipments currently exercising the administrative exemption (i.e., shipments that do not exceed $800). 

Relying on the detailed information 

characterizing shipment/fee 

combinations provided in Chapter 3 in 

the standalone RIA (available in the 

docket of this rulemaking) we find: 

• Approximately 73 percent of 

qualifying low-value shipments do not 

experience increases in fees; only 

additional tariffs will apply. 

• Among the commercial non-express 

carriers, only the consignees with 

shipments moving from manifest 

clearance to enhanced are expected to 

incur increased fees. This bin represents 

approximately 4 percent of total 

qualifying low-value shipment volume. 

Increased fees range from 1 percent to 

40 percent of the value of the shipment. 

• Among express commercial 

carriers, nearly all shipments will incur 

additional fees, ranging from 1 percent 

to 1,301 percent of the value of the 

shipment. These fees are in addition to 

the tariffs described above. The affected 

shipments represent 18 percent of total 

qualifying low-value shipments. 

• For postal, only shipments 

containing Section 232, 201, and 301 

goods experience additional fees. These 

shipments represent approximately 6 

percent of total low-value shipment 

volume. Increased fees range from 2 

percent to 443 percent of the shipment 

value, and are in addition to tariffs. 

As described in the low impact 

scenario, data describing the number, 

value, and entry mode of qualifying 

low-value shipments by consignee is not 

readily available. Therefore, we are 

uncertain whether tariffs and fees of this 

magnitude impose a significant impact 

on the annual revenues of small entities 

importing these affected shipments. 

However, the value of fees and tariffs 

relative to the value of individual 

shipments suggests the potential for a 

significant increase in the price of 

affected goods. Given that options exist 

for reducing fees, such as consolidation, 

and are likely to be available for many 

shipments, we believe the low impact 

scenario is more likely. 

D. Initial Regulatory Flexibility Analysis 

(IRFA) 

Due to uncertainty regarding whether 

impacts to various small entities are 

significant, CBP does not certify that 

this rule has a significant economic 

impact on a substantial number of small 

entities and we instead provide 

information in this section for an IRFA. 

1. A description of the reasons why 

action by the agency is being 

considered. 

U.S. trade law authorizes the 

President or USTR to assess additional 

tariffs under certain acts of Congress, 

including the Trade Expansion Act of 

1962 and the Trade Act of 1974. Section 

232 of the Trade Expansion Act of 1962 

authorizes the President to adjust 

imports of an article and its derivatives 

if there is a determination that the 

article is being imported in such 

quantities or under such circumstances 

as to threaten to impair the national 

security. Section 201 of the Trade Act of 

1974 authorizes the President to impose 

temporary trade measures if there is 

substantial cause of serious injury or 

threat thereof to U.S. industries because 

of increased imports. Lastly, Section 301 

of the Trade Act of 1974 allows USTR 

to impose import restrictions to address, 

among others, unreasonable or 

discriminatory acts, policies, or 

practices that burden or restrict U.S. 

commerce. This proposed rulemaking 

will refer to Section 232, 201, or 301 as 

‘‘specified trade or national security 

actions.’’ 

Trade or national security actions are 

designed to protect domestic industries 

and the American public from serious 

injury, or the threat thereof, caused by 

import surges and unfair trade practices 

or to adjust imports that threaten to 

impair national security, or to encourage 

foreign governments to eliminate 

policies that are unreasonable or 

discriminatory and burden or restrict 

U.S. commerce. However, some 

merchandise subject to specified trade 

or national security actions may also be 

eligible for the administrative 

exemption pursuant to Section 321 of 

the Trade Act of 1930, as amended (19 

U.S.C. 1321(a)(2)). Section 321 provides 

administrative exemptions from duty 

and taxes that are imposed by reason of 

importation for three categories of 

imported articles: 

• Certain bona-fide gifts valued at 

$100 or less ($200, if the gift was from 

certain island possessions) sent from 

persons in foreign countries to persons 

in the United States; 

• Certain personal or household 

articles valued at $200 or less 

accompanying persons arriving in the 

United States; and 

• All other imported articles when 

the aggregate fair retail value of the 

articles in the country of shipment is 

$800 or less. 

This proposed rulemaking concerns 

shipments in the third category, which 

are covered by the administrative 

exemption in 19 U.S.C. 1321(a)(2)(C). To 

avoid confusion with the other two 

administrative exemptions, we will refer 

to this exemption alone as the 

‘‘administrative exemption.’’ 

Specifically, the administrative 

exemption allows a shipment to be 

imported free of duties and taxes 

imposed upon or by reason of 

importation when the aggregate fair 

retail value in the country of shipment 

of articles imported by the same person 

on the same day and exempted from the 

payment of duty is less than or equal to 

$800. The administrative exemption 

limit was originally set at $1 in the 

Customs Administrative Act of 1938 to 

limit the ‘‘expense and inconvenience’’ 

of collecting duty when it was a 

disproportionate amount of work by the 

U.S. government compared to the 

amount of revenue that would be 

collected. Since its inception, Congress 

has increased this daily aggregate value 

cap to $5 in 1978, $200 in 1993, and 

$800 in 2016. In recent years, the 

volume of imports subject to specified 

trade or national security actions has 

increased, but the tariffs imposed as a 

result of these actions do not apply to 

imports that enter as qualifying lowvalue shipments. Thus, the 

administrative exemption dampens the 

impact of specified trade or national 

security actions by allowing imports 

that claim the exemption to legally 

avoid all duties and taxes that would 

otherwise be collected, including the 

additional duties collected under 

specified trade and national security 

actions. In fiscal year 2023, hundreds of 

thousands of shipments would have 

been assessed additional tariffs under 

Section 232, 201, or 301 had they 

entered through formal or other type of 

informal entry. 

Additionally, low-value shipments 

create operational inefficiencies for 


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56 Data pulled from CBP’s Automated Targeting 

System (ATS) database. 

CBP’s ability to conduct an inspection 

of these goods. The volume of qualifying 

low-value shipments has risen sharply 

from approximately 139 million in fiscal 

year 2015 (prior to the increase in the 

exemption value) to 1 billion shipments 

per year in fiscal year 2023.56 While 

entry type 86 has sped up processing for 

many of the qualifying low-value 

shipments, the remaining shipments are 

processed manually and with more 

limited data than other types of entries. 

CBP anticipates that this rulemaking 

would reduce the volume of qualifying 

low-value shipments and thereby 

increase the efficiency with which CBP 

identifies imports presenting security 

risks, including curbing the smuggling 

of illegal opioids such as heroin and 

fentanyl, by shifting some shipments to 

other entry types that require more data 

and the use of an authorized broker. 

2. A succinct statement of the 

objectives of, and legal basis for, the 

proposed rule. 

The proposed rulemaking aims to 

uphold the objectives of U.S. trade and 

national security actions, protect the 

revenue, and prevent unlawful 

importations. Trade or national security 

actions, such as additional tariffs under 

Section 232, Section 201, and Section 

301, are meant to prevent specific harms 

such as the threat posed by certain 

imports to national security or domestic 

industries or to respond to 

discriminatory or unreasonable 

practices that restrict or burden U.S. 

commerce. The rule would prevent lowvalue shipments from circumventing 

these trade or national security actions 

by claiming the administrative 

exemption. Moreover, considering the 

rate of duties and the aggregate trade 

volume of affected imports, the amount 

of additional revenue to be collected 

under the proposed rule would 

substantially outweigh any added 

expense or inconvenience to the U.S. 

Government. Finally, CBP expects that 

the affected goods would be 

consolidated into larger shipments and 

entered under an appropriate formal or 

informal entry process, resulting in 

decreased overall volume of shipments. 

This consolidation would help CBP 

officers inspect entries for inadmissible 

merchandise more efficiently. 

The authority to except merchandise 

subject to specified trade or national 

security actions from the administrative 

exemption comes from 19 U.S.C. 

1321(b). This statutory provision 

authorizes regulations that except 

certain merchandise from eligibility for 

the administrative exemptions in 19 

U.S.C. 1321(a) when such exceptions 

are consistent with the purpose of 19 

U.S.C. 1321(a), or necessary to protect 

the revenue or to prevent unlawful 

importations. The authority to require 

HTSUS classification as part of the 

proposed basic entry process (in 

addition to the proposed enhanced 

entry process) as described in the ELVS 

NPRM comes from 19 U.S.C. 

498(a)(1)(A), which authorizes the 

prescription of special rules for the 

declaration and entry of low-value 

shipments. 

3. A description of, and, where 

feasible, an estimate of the number of 

small entities to which the proposed 

rule will apply. 

As described in Section 6.2.1 of the 

standalone RIA, the proposed rule does 

not directly regulate any one industry. 

Instead, it 1) imposes additional 

requirements on shipments that seek to 

use the administrative exemption, and 

2) makes goods subject to ad valorem 

tariffs under Section 232, 201, and 301 

ineligible for the administrative 

exemption. Therefore, any individual or 

entity that would have claimed the 

administrative exception in the baseline 

is affected by the proposed rule. Those 

individuals and entities importing 

goods that previously met the 

requirements for the administrative 

exemption are likely to be affected by 

higher prices for these goods. 

Any small entity in the United States 

has the potential to be affected by the 

rule as a consignee. Analysis of a 

sample of consignees of shipments 

using type 86 entry for one day in 2023 

demonstrates that 92 percent of 

businesses in the sample qualify as 

small. 

4. A description of the projected 

reporting, record-keeping and other 

compliance requirements of the 

proposed rule, including an estimate of 

the classes of small entities that will be 

subject to the requirement and the type 

of professional skills necessary for 

preparation of the report or record. 

The proposed rule would add a 

reporting requirement to the basic entry 

process beyond the proposed 

requirements described in the ELVS 

NPRM. Under this rule, the 10-digit 

HTSUS classification would need to be 

reported with the entry filing for each 

product in a basic entry. The 10-digit 

HTSUS classification reporting 

requirement is already proposed for 

enhanced entry in the ELVS NPRM. Any 

small entity that would import a lowvalue shipment subject to specified 

trade or national security actions 

through basic entry in the absence of 

this rule would be affected by this new 

requirement. This would include both 

small businesses and individual 

consumers. Reporting the HTSUS codes 

requires the ability to determine the 

merchandise’s HTSUS codes. We expect 

most importers to hire a licensed 

customs broker to determine the HTSUS 

codes and file the entry. 

5. An identification, to the extent 

practicable, of all relevant Federal rules 

which may duplicate, overlap or conflict 

with the proposed rule. 

This proposed rule would not conflict 

with any relevant Federal rules. This 

NPRM does, however, propose 

amendments to another NPRM’s 

proposed amendments. The ELVS 

NPRM proposes the creation of a new 

entry process for entering low-value 

shipments, referred to as the ‘‘enhanced 

entry process,’’ which would allow CBP 

to target high-risk shipments more 

effectively. The ELVS NPRM also 

proposes revisions to the current 

process for entering low-value 

shipments cleared off the manifest, 

referred to as the ‘‘basic entry process,’’ 

to require additional data elements that 

would assist CBP in verifying eligibility 

for duty- and tax-free entry. For more 

information about the ELVS NPRM and 

its effects, please see regulations.gov for 

the rule and the accompanying 

regulatory analysis. 

6. A description of any significant 

alternatives to the proposed rule that 

accomplish the stated objectives of 

applicable statutes and that minimize 

any significant economic impact of the 

proposed rule on small entities. 

In addition to the preferred regulatory 

alternative (the proposed rule), CBP also 

considered two other alternatives. 

• First, CBP considered a more 

stringent alternative where all 

shipments except for bona fide gifts 

under 19 U.S.C. 1321(a)(2)(A) would be 

prohibited from claiming the 

administrative exemption. Although 

this alternative is not modeled in this 

analysis, CBP anticipates the 

incremental welfare loss and gain in 

tariff revenue under this alternative 

would be greater than those under the 

proposed rule because more shipments 

would be affected. Therefore, this 

alternative has the potential to increase 

impacts on small entities. 

• Second, CBP considered an 

alternative identical to the proposed 

rule but with an additional requirement 

that HTSUS codes be required for postal 

shipments entered by USPS. This 

alternative is not feasible because the 

collection of HTSUS codes in the postal 

environment is currently restricted by 

U.S. obligations under the Universal 

Postal Union. Therefore, this alternative 

would not meet the stated objectives of 

the proposed rule. 


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57CBP is aware of the November 12, 2024 

decision in Marin Audubon Society v. Federal 

Aviation Administration, No. 23–1067 (D.C. Cir. 

Nov. 12, 2024). To the extent that a court may 

conclude that CEQ regulations implementing NEPA 

are not judicially enforceable or binding on this 

agency action, CBP has nonetheless elected to 

follow those CEQ regulations, in addition to DHS’s 

Directive and Instruction Manual, to meet the 

agency’s obligations under NEPA, 42 U.S.C. 4321 et 

seq. 

E. Paperwork Reduction Act 

In accordance with the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3507), 

an agency may not conduct, and a 

person is not required to respond to, a 

collection of information unless the 

collection of information displays a 

valid control number assigned by the 

Office of Management and Budget 

(OMB). The collection of information 

contained in this proposed rule, will be 

submitted to OMB for review under 

section 3507(d) of the Paperwork 

Reduction Act (PRA). The public can 

direct comments to the Office of 

Information and Regulatory Affairs of 

OMB, Attention: Desk Officer for 

Customs and Border Protection. Such 

comments can be submitted in the 

regulatory docket for this proposed rule. 

This rule, if finalized, would make 

low-value shipments subject to 

specified trade or national security 

actions ineligible for the administrative 

exemption, resulting in a change to 

OMB-approved collection 1651–0024 

beyond the changes proposed in the 

Entry of Low-Value Shipments NPRM. 

Under the changes to the information 

collection in that NPRM, basic entries 

do not have a time burden as they have 

no data requirement beyond what is 

submitted on the bill of lading, whereas 

CBP reports separate burden estimates 

for Form 3461s filed on paper, Form 

3461s and Form 3461ALTs filed 

electronically, and enhanced entries 

filed electronically. 

The proposed rule would require all 

entries using the basic entry process (as 

described in the ELVS NPRM) to 

provide a 10-digit HTSUS code to 

facilitate CBP’s ability to confirm 

eligibility for the administrative 

exemption. Shipments found ineligible 

would need to refile under formal or 

other type of informal entry to enter the 

merchandise (excluding enhanced or 

basic entry), leading to a decrease in 

both basic and enhanced entries. 

Because the HTSUS code will be 

required for all shipments entered using 

the basic or enhanced entry process 

(subject to waiver in certain 

circumstances, as detailed in the Entry 

of Low-Value Shipments NPRM), there 

is less of a difference in the filing 

requirements between basic and 

enhanced entries, so we expect some 

basic entries to shift to enhanced 

entries. As a result, we will see a change 

in the number of responses for Form 

3461, 3461ALT; Excluding Enhanced, 

and enhanced entries. CBP does not 

expect a change in the number of 

respondents as a result of this rule. 

As low-value shipments subject to 

specified trade or national security 

actions are made ineligible for the 

administrative exemption, importers 

will have to file entry under formal or 

other type of informal entry (excluding 

enhanced or basic entry) and fill out 

Form 3461, 3461ALT (excluding 

enhanced). As low-value shipments 

shift away from basic or enhanced, CBP 

and brokers expect them to 

reconsolidate into larger shipments. 

CBP does not know the level of 

consolidation that will occur, and it is 

not estimated in the main analysis of 

this rulemaking, but subject matter 

experts in the trade community that 

CBP interviewed as part of the economic 

analysis report that they expect enough 

consolidation to occur that this rule will 

not result in additional time burden for 

the public and that it may even result 

in time savings. In keeping with that 

information, CBP is adjusting its 

estimates of the filings to reflect a level 

of consolidation at which the time 

burden to the public breaks even as a 

result of this rule. CBP will revisit these 

estimates when it renews this 

information collection. Upon 

finalization of this proposed rule, OMBapproved collection 1651–0024 will be 

revised to reflect the increased burden 

hours as follows: 

Paper Only Entry/Immediate Delivery 

Form 3461 

Estimated Number of Respondents: 

1,669. 

Estimated Number of Total Annual 

Responses: 33,923. 

Estimated Time per Response: 0.25 

hours (15 minutes). 

Estimated Total Annual Burden 

Hours: 8,481. 

ACE Cargo Release Electronic 

Submission 

Form 3461 and 3461ALT Excluding 

Enhanced Entry 

Estimated Number of Respondents: 

6,580. 

Estimated Number of Total Annual 

Responses: 23,027,005. 

Estimated Time per Response: 0.17 

hours (10 minutes). 

Estimated Total Annual Burden 

Hours: 3,837,834. 

Enhanced Entry 

Estimated Number of Respondents: 

535. 

Estimated Number of Total Annual 

Responses: 242,230,193. 

Estimated Time per Response: 0 hours 

(0.0007 minutes). 

Estimated Total Annual Burden 

Hours: 2,826. 

F. National Environmental Policy Act 

DHS and its components analyze 

actions to determine whether the 

National Environmental Policy Act of 

1969 (‘‘NEPA’’), 42 U.S.C. 4321 et seq., 

applies to these actions and, if so, what 

level of NEPA review is required. 42 

U.S.C. 4336. DHS’s Directive 023–01, 

Revision 01 and Instruction Manual 

023–01–001–01, Revision 01 

(‘‘Instruction Manual 023–01–001–01’’) 

establish the procedures that DHS uses 

to comply with NEPA and the Council 

on Environmental Quality (‘‘CEQ’’) 

regulations for implementing NEPA, 40 

CFR parts 1500 through 1508.57

Federal agencies may establish 

categorical exclusions for categories of 

actions they determine normally do not 

significantly affect the quality of the 

human environment and, therefore, do 

not require the preparation of an 

Environmental Assessment or 

Environmental Impact Statement. 42 

U.S.C. 4336e(1); see also 40 CFR 1501.4, 

1507.3(c)(8), 1508.1(e). DHS has 

established categorical exclusions, 

which are listed in Appendix A of its 

Instruction Manual 023–01–001–01. 

Under DHS’s NEPA implementing 

procedures, for an action to be 

categorically excluded, it must satisfy 

each of the following three conditions: 

(1) the entire action clearly fits within 

one or more of the categorical 

exclusions; (2) the action is not a piece 

of a larger action; and (3) no 

extraordinary circumstances exist that 

create the potential for a significant 

environmental effect. 

DHS has analyzed this action under 

Directive 023–01 and Instruction 

Manual 023–01–001–01. DHS has made 

a determination that this rulemaking 

action is one of a category of actions that 

do not individually or cumulatively 

have a significant effect on the human 

environment. First, this proposed rule 

clearly fits within the Categorical 

Exclusions A3(a) and A3(d) of DHS’s 

Instruction Manual 023–01–001–01, 

Appendix A, for the promulgation of 

rules of a ‘‘strictly administrative or 

procedural nature’’ and rules that 

‘‘interpret or amend an existing 

regulation without changing its 

environmental effect,’’ respectively. The 

proposed rule would create a new 


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process for entering low-value 

shipments, allowing CBP to target highrisk shipments more effectively. The 

proposed rule would also revise the 

current process for entering low-value 

shipments to require additional data 

elements that would assist CBP in 

verifying eligibility for duty- and taxfree entry of low-value shipments and 

bona-fide gift. Second, this NPRM is not 

part of a larger action. Third, this NPRM 

presents no extraordinary circumstances 

creating the potential for significant 

environmental effects. Therefore, a more 

detailed NEPA review is not necessary. 

DHS seeks any comments or 

information that may lead to the 

discovery of any significant 

environmental effects from this NPRM. 

Signing Authority 

In accordance with Treasury Order 

100–20, the Secretary of the Treasury 

delegated to the Secretary of Homeland 

Security the authority related to the 

customs revenue functions vested in the 

Secretary of the Treasury as set forth in 

6 U.S.C. 212 and 215, subject to certain 

exceptions. This regulation is being 

issued in accordance with DHS 

Directive 07010.3, Revision 03.2, which 

delegates to the Commissioner of CBP 

the authority to prescribe and approve/ 

sign regulations related to customs 

revenue functions. Pete Flores, Senior 

Official Performing the Duties of the 

Commissioner, having reviewed and 

approved this document, has delegated 

the authority to electronically sign this 

document to the Director (or Acting 

Director, if applicable) of the 

Regulations and Disclosure Law 

Division of CBP, for purposes of 

publication in the Federal Register. 

List of Subjects 

19 CFR Part 10 

Bonds, Exports, Imports, Reporting 

and recordkeeping requirements, Trade 

agreements. 

19 CFR Part 128 

Administrative practice and 

procedure, Freight, Reporting and 

recordkeeping requirements. 

19 CFR Part 143 

Reporting and recordkeeping 

requirements. 

Proposed Amendments to the CBP 

Regulations 

For the reasons stated above in the 

preamble, CBP proposes to amend 19 

CFR parts 10, 128, and 143 as set forth 

below. 

PART 10—ARTICLES CONDITIONALLY 

FREE, SUBJECT TO A REDUCED 

RATE, ETC. 

■ 1. The general authority citation for 

part 10 continues to read as follows: 

Authority: 19 U.S.C. 66, 1202 (General 

Note 3(i), Harmonized Tariff Schedule of the 

United States (HTSUS)), 1321, 1481, 1484, 

1498, 1508, 1623, 1624, 4513. 

* * * * * 

■ 2. Amend § 10.153 by adding 

paragraph (j); 

The addition reads as follows: 

§ 10.153 Conditions for exemption. 

* * * * * 

(j) The exemption provided for in 

§ 10.151 is not to be allowed with 

respect to imported merchandise 

covered in an action imposing 

additional duties pursuant to either 

Section 232 of the Trade Expansion Act 

of 1962 (19 U.S.C. 1862), Section 201 of 

the Trade Act of 1974 (19 U.S.C. 2251 

et seq.), or Section 301 of the Trade Act 

of 1974 (19 U.S.C. 2411 et seq.). 

* * * * * 

PART 128—EXPRESS 

CONSIGNMENTS 

■ 3. The general authority citation for 

part 128 continues to read as follows: 

Authority: 19 U.S.C. 58c, 66, 1202 

(General Note 3(i), Harmonized Tariff 

Schedule of the United States), 1321, 1484, 

1498, 1551, 1555, 1556, 1565, 1624. 

■ 4. Amend § 128.21 by revising 

paragraph (a)(4)(ii) to read as follows: 

§ 128.21 Manifest requirements. 

(a) * * * 

(4) * * * 

(ii) If the merchandise is eligible for, 

and is entered under, the informal entry 

procedures as provided in § 128.24, 

except for merchandise eligible to pass 

free of duty and tax as provided in 

§ 128.24(f) and entered under 

§ 143.23(k) of this chapter. 

* * * * * 

PART 143—SPECIAL ENTRY 

PROCEDURES 

■ 5. The general authority citation for 

part 143 continues to read as follows: 

Authority: 19 U.S.C. 66, 1321, 1414, 1481, 

1484, 1498, 1624, 1641. 

■ 6. Amend § 143.23 by adding 

paragraph (k)(9) to read as follows: 

§ 143.23 Form of entry. 

* * * * * 

(k) * * * 

(9) The 10-digit classification of the 

merchandise in Chapters 1–97 (and 

additionally in Chapter 99, if 

applicable) of the Harmonized Tariff 

Schedule of the United States (HTSUS), 

if entering merchandise meeting the 

requirements of 19 U.S.C. 1321(a)(2)(C) 

and § 10.151. 

* * * * * 

Robert F. Altneu, 

Director, Regulations & Disclosure Law 

Division, Regulations & Rulings, Office of 

Trade, U.S. Customs and Border Protection. 

[FR Doc. 2025–01074 Filed 1–17–25; 8:45 am] 

BILLING CODE 9111–14–P 

DEPARTMENT OF TRANSPORTATION 

Federal Highway Administration 

23 CFR Part 500 

23 CFR Part 515 

[FHWA Docket No. FHWA–2024–0048] 

RIN 2125–AG00 

Asset Management Plans; 

Management and Monitoring Systems 

AGENCY: Federal Highway 

Administration (FHWA), U.S. 

Department of Transportation (DOT). 

ACTION: Proposed rule; extension of 

comment period. 

SUMMARY: The FHWA is extending the 

comment period for a notice of 

proposed rulemaking (NPRM) and 

request for comments, which was 

published on November 13, 2024. The 

original comment period is set to close 

on January 13, 2025. The extension is 

based on concerns expressed by 

stakeholders that the January 13, 2025, 

closing date does not provide sufficient 

time to review and provide 

comprehensive comments. The FHWA 

recognizes that others interested in 

commenting may have similar concerns 

and agrees that the comment period 

should be extended. Therefore, the 

closing date for comments is changed to 

February 12, 2025, which will provide 

stakeholders and others interested in 

commenting additional time to discuss, 

evaluate, and submit responses to the 

docket. 

DATES: Comments must be received on 

or before February 12, 2025. Late 

comments will be considered to the 

extent practicable. 

ADDRESSES: Mail or hand deliver 

comments to the U.S. Department of 

Transportation, Dockets Management 

Facility, 1200 New Jersey Avenue SE., 

Washington, DC 20590, or submit 

electronically at https://

www.regulations.gov. All comments 

should include the docket number that 


ddrumheller on DSK120RN23PROD with PROPOSALS1