U.S. $2,500 limit for informal entries takes effect

The following is from the 11 January 2013 edition of American Shipper.

A new U.S. rule raising the threshold value to $2,500 for shipments eligible for informal customs entry went into effect Jan. 7.

As previously reported, U.S. Customs and Border Protection last month published notice of its intent to increase by $500 the limit for which merchandise may qualify for an informal entry, thereby eliminating the need for a surety bond, expediting customs clearance and reducing the amount of the Merchandise Processing Fee from $25 to $2 for electronic filings.

CBP has said a major reason for the new informal entry limit is to counter inflation, which has reduced the real dollar value eligible for expedited treatment.

The U.S. action also equalizes the informal entry threshold with that of Canada in an effort to simplify cross-border trade between the two neighbors. Both governments had committed to the change as part of the 2011 Beyond the Border Action Plan to coordinate border management in ways that spur trade and economic growth. Canada raised its threshold to (CND)$2,500 from $1,600.

“The harmonization of the value thresholds for customs clearance for both Canada and the United States will not only facilitate and expedite trade between our countries, but will also facilitate trade from other countries into either Canada or the United States,” Vic Toews, Canada's Minister of Public Safety, said in a news release. “Reducing the administrative and paperwork burden on Canadian businesses improves Canada’s competitiveness, especially for our small businesses, which are the backbone of our economy.”

Primary beneficiaries of the new procedures are express delivery companies and their customers, which are expected to see a reduction in document filing and record-keeping activity, as well as lower shipping costs.

A large proportion of the goods covered under an increased informal entry level of $2,500 are likely to involve new importing firms, which generally will be small to midsized enterprises, the Express Association of America said in a statement praising the new rule. "Raising the informal entry level will be a stimulus to the growing e-commerce industry, and numerous small and medium sized firms will share in this benefit," it said. - Eric Kulisch