On December 1, 2016, we wrote about U.S. Customs and Border Protection’s (CBP) new E-Commerce and Small Business Branch, which was created to help consumers and merchants safely navigate the complexities associated with the steady rise of global e-commerce. CBP defines e-commerce as high-volume, low-value shipments purchased via electronic means. E-commerce shipments pose the same health, safety, and economic security risks as containerized shipments, but the volume is higher and growing. Additionally, transnational criminal organizations are shipping illicit goods to the U.S. via small packages due to a perceived lower interdiction risk and less severe consequences if the package is interdicted.
In an effort to combat those risks and have a stronger trade posture in the e-commerce environment, the CBP released its e-commerce strategy. The new e-commerce strategy addresses the growing volume of imported small packages and the challenges it presents for the U.S. economy and security.
The strategy includes efforts to educate the public and trade community to ensure they understand their responsibilities as importers to comply with customs regulations.
What New Challenges Does E-Commerce Pose to the U.S.
- Increasing Trade Volume
- Since 2000, the number of Americans shopping online has increased four-fold, from 22% to 79%.
- The rise in e-commerce has led to a massive increase in shipments valued under $2,500, affecting sea, rail, and land ports of entry.
- By the end of Fiscal Year 2017, one express hub saw a 1,000 percent increase in shipments over 20 years, primarily small shipments.
- Dangerous and Non-Compliant Shipments
- In early 2017, during a “small packages” special operation at the international mail facility in New York, CBP seized more than five pounds of fentanyl, along with almost 1,300 other non-compliant shipments – a total non-compliance rate of 43 percent.
- CBP must receive qualitative data about low -value shipments to identify such risks to the nation’s safety and security.
- Consumer Awareness
- Many new importers empowered by e-commerce are unfamiliar with CBP’s requirements and regulations.
- Less experienced importers may face unexpected transaction costs as well as possible import restrictions and penalties.
- Compliance failure may severely impact the success of small e-commerce businesses
CBP Has Developed This E-Commerce Strategy to Advance Four Primary Goals
- Enhance legal and regulatory authorities to better posture CBP and interagency partners to address emerging threats
- Review existing legal and regulatory authorities to develop risk segmentation processes, improve targeting, and realign resources
- Develop a plan that will incentivize compliance from all stakeholders within the e-commerce supply chain
- Build upon existing legal authorities to enhance partnerships with domestic and international stakeholders that address small parcel shipments
- Enhance and adapt all affected CBP operations to respond to emerging supply chain dynamics created by the rapid growth of e-commerce
- Enable risk-based enforcement to increase operational efficiency
- Determine highest risk e-commerce packages utilizing a counter network approach including state-of-the-art techniques and technology
- Optimize workforce, policies, and procedures to adapt CBP to the evolving e-commerce environment
- Drive private sector compliance through enforcement resources and incentives
- Strengthen e-commerce compliance through enforcement mechanisms
- Incentivize compliance through an e-commerce known shipper program
- Leverage Partner Government Agency network to enhance enforcement procedures for e-commerce shipments
- Facilitate international trade standards for e-commerce to support economic prosperity
- Lead standards and best practices development with the interagency and international customs community
- Explore technology options to increase the exchange of e-commerce information
- Educate the e-commerce community to promote an understanding of applicable cross-border trade rights and responsibilities
What Are the Benefits of CBP’s E-Commerce Strategy
CBP’s E-commerce strategy will provide the following benefits:
- Strengthens CBP’s ability to protect the U.S. economy
- Improves trade risk management
- Maximizes collection of owed trade revenue
- Deters trade and customs law violations
- Strengthens international mail enforcement
- Enhances CBP’s long-term partnership with the trade community
How Will CBP Measure the Success of the E-Commerce Strategy
To measure success of the key goals and objectives of the strategy, CBP will use internal, targeted performance measures and:
- Create a baseline for the data
- Set key measurement targets
- Report on its progress
- Update related public-facing Government Performance and Results Modernization Act measures
We highly encourage all new (and even experienced) importers to know the “Top 10 Tips” when importing and ensure you have a compliance plan in place so imported merchandise does not end up detained by CBP. If you want to get your compliance plan started, contact us today at 305-456-3830 or via email at firstname.lastname@example.org.
[…] E-Commerce is one of the fastest-growing sectors of the US economy. Although E-Commerce has become increasingly more common over the past several decades, since the onset of the pandemic in early 2020, the prevalence of E-commerce has propelled by 3-5 years. Not only did the value of e-commerce in the second quarter of 2020 (Q2) see a 45% increase from the same time last year, but also, currently, more than 1 out of every $5 (28%) spent in the United States is related to e-commerce! Below are some e-commerce statistics CBP presented: […]