CBP revokes 'de minimis' rules helping counterfeiters

In what may be viewed as a step forward in the war against the illicit trade in counterfeit goods, US Customs and Border Protection (CBP) has revoked the 'de minimis' exemption for low-value shipments of FDA-regulated goods.

The CBP's notice means that, effective immediately, all FDA-regulated products like food, animal feed, cosmetics, medical devices and equipment, and medicines can no longer be released by CBP without FDA review, with all earlier exemptions now rescinded.

The agency notes that since the exemptions were granted, the "technological capabilities of both the trade and the FDA have advanced significantly" and that means the agency now has the capacity to "review all electronically transmitted FDA-regulated products offered for import, regardless of shipment quantity and value, to facilitate legitimate trade and prevent the importation of violative products…that may pose risks to health, safety, and security."

The move comes against the backdrop of a plan to remove the de minimis exception for all products by the Trump administration. The mechanism, which allows goods valued at $800 or less to enter the US duty-free, is thought to have played a role in the emergence of small shipments as a major carrier for counterfeit goods entering the US.

For many years, small-package shipments have qualified for streamlined customs procedures that have made it difficult for border security to detect and stop packages containing counterfeit goods, as well as other illicit products such as fentanyl and other illicit drugs, pill press parts, and products that are made with forced or child labour.

Lawmakers have argued that the sheer volume of packages is overwhelming the capacity of CBP to protect US citizens from illegal goods, given that, on average, CBP processes over 4 million de minimis shipments into the US each day.

That is now all set to change, however, as the Trump administration did away with de minimis exemptions for goods arriving from China and Hong Kong – two notorious sources of counterfeit goods – on May 2. More than three-quarters (76 per cent) of de minimis shipments entering the US originated from China before the ban.

Moreover, the passage earlier this month of Trump's wide-ranging One Big Beautiful Bill Act (OBBBA) means that the de minimis exemptions will be stripped from imports from all other countries on July 1, 2027.

CBP Acting Commissioner Pete Flores recently estimated that in fiscal 2024, de minimis shipments accounted for 97 per cent of intellectual property rights seizures, equating to 31m counterfeit items. He added that such shipments also accounted for 77 per cent of health and safety seizures, equivalent to more than 20m dangerous or illicit items.