Good morning. More packages than ever are entering the U.S. under a trade provision—frequently used by e-commerce giants Temu and Shein—that allows duty-free entry with little scrutiny, even as lawmakers call for action, Risk & Compliance Journal's Richard Vanderford reports. 

The so-called de minimis provision allows packages with contents under $800 in value to enter the country under a simplified procedure. Critics say that is a loophole helping companies end-run tariffs and defy bans on imported goods made with forced labor.

• The stats: So far in fiscal year 2024, at least 485 million packages have entered the U.S. under the provision, according to data provided to The Wall Street Journal by Rep. Mike Gallagher, a Wisconsin Republican who chairs the House Select Committee on the Chinese Communist Party. That compares with 685 million packages in all of fiscal year 2022, according to U.S. Customs and Border Protection. A representative for Customs said Gallagher’s 2024 figure is accurate.
   
• The background: Most Americans encounter the de minimis provision when they return from abroad and bring souvenirs without paying duty. Businesses such as Temu and Shein, though, have used the program to let them bypass the scrutiny Customs gives bulk shipments by sending goods directly to U.S. consumers. The House Select Committee estimates Temu and Shein alone account for about a third of all de minimis shipments.
   
• Where do U.S. businesses stand? U.S. businesses broadly are split on the provision. Homeland Security Secretary Alejandro Mayorkas in January met with members of the National Council of Textile Organizations and heard complaints the exception is being exploited.

We invite readers to take part in our 2024 Risk & Compliance Survey. It will only take a few moments of your time, and your insights will inform industry trends and enhance our community knowledge. We hope to present aggregated results in a future edition of Risk & Compliance Journal.

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Follow us on X at @WSJRisk. Follow Risk & Compliance editor David Smagalla @DSmagalla_DJ and reporters Mengqi Sun @_MengqiSun, Dylan Tokar @dgtokar and Richard Vanderford @VanderfordRich.

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