Inbound Logistics | January 2025

U V A N A L Y T I C S R H J O

De Minimis Trade Exemption In September 2024, the Biden Administration announced steps to potentially adjust de minimis shipments, or those in which the aggregate fair retail value of the items imported is $800 or less. These shipments, which total about 140 million annually, enter the United States with less information than other imports and are not subject to duties and taxes. That makes it challenging to enforce U.S. trade laws and health and safety requirements, among other concerns. Support for decreasing the de minimis amount or changing the way it’s calculated appears to be bi-partisan, Pelli says. In its announcement, the Administration said it intends to issue a Notice of Proposed Rulemaking that would exclude from the de minimis exemption certain shipments, such as those covered by tariffs imposed under Sections 301 of the Trade Act of 1974. Section 301 tariffs cover approximately 40% of U.S. imports, including 70% of textile and apparel imports from China, the announcement stated. • • • Frameworks like the EU’s IOSS are expected to expand globally. They can streamline cross-border ecommerce taxation but also add compliance complexity. • • • Value-Added Tax (VAT) regulations continue to change. In Switzerland, for instance, new VAT registration requirements went into effect on January 1, 2025. Previously, mail-order businesses shipping goods to Switzerland had to remit VAT payments if their annual revenue from the shipments topped 100,000 Swiss francs. Now, all mail-order platforms must declare and pay VAT for every delivery within Switzerland, no matter their volume. Frameworks like the EU’s VAT Import One-Stop Shop (IOSS), are expected Value-Added Tax (VAT) Regulations

EMBRACING ICS2ENS

By Bryn Heimbeck, President and Co-Founder, Trade Tech

The European Union’s Import Control System 2 (ICS2-ENS) brings Europe, the largest trading market in the world, in line with other major importing markets with an identical regulatory process and data configuration. Here’s why ICS2-ENS matters and how strict data rules ensure accuracy and operational fluidity. By mandating that all Bill of Lading information be submitted to EU Customs 24 hours before cargo is loaded, ICS2- ENS enhances visibility, accuracy, and standardization across the supply chain. This advance notice enables more precise tracking and better decision-making, ultimately leading to greater efficiency and reduced delays. Ignoring ICS2-ENS can lead to severe consequences, including hefty fines for data inaccuracies and potential disruptions in cargo flow. The system's rigorous data accuracy requirements and its alignment with international standards underscore the need for businesses to adapt proactively. Implementing robust compliance measures and leveraging advanced technologies will not only help avoid financial penalties but also streamline operations and enhance overall supply chain performance. VISIBILITY IN THE SUPPLY CHAIN. By requiring detailed shipment data in advance, ICS2-ENS provides a comprehensive view of cargo from loading to discharge. This early notice improves tracking and offers stakeholders actionable insights into their cargo ’ s journey, ultimately facilitating better decision-making and enhancing operational efficiency. THE IMPERATIVE OF DATA ACCURACY AND COMPLETENESS. Visibility alone isn ’ t enough; accurate and complete data is crucial. While penalties for non-compliance have not been finalized for ICS2-ENS, similar regulatory requirements impose strict penalties—up to $5,000 per shipment—for data inaccuracies or omissions.

This regulatory pressure underscores the need for precise data submission. Errors or incomplete information can lead to severe fines and compliance issues, making data integrity a cornerstone of smooth supply chain operations. THE ROLE OF DATA STANDARDIZATION. ICS2-ENS ’ s focus on data standardization mandates a uniform data submission format to a single EU Customs authority, ensuring consistency across all industry participants— carriers, NVOCCs, forwarders, terminals, and brokers. This standardization simplifies compliance, reduces errors, and improves operational efficiency. ICS2-ENS also aligns closely with the World Customs Organization Data Protocol, suggesting potential for further global harmonization in trade regulations. CUSTOMS CLEARANCE AND MANAGING CONGESTION. ICS2-ENS also addresses customs clearance timing, allowing pre-arrival clearance and better congestion management at ports. To support this, service providers need to send shipment data to customs brokers via electronic methods immediately after vessel departure. Real-time data transfer enables brokers to prepare for prompt customs clearance, reducing delays and enhancing overall efficiency. AUTOMATED CUSTOMS CLEARANCE. Automated customs clearance is on the horizon. With technological advancements, customs clearance could soon be automated based on pre-classified SKUs and commercial invoices. This automation promises to streamline processes, minimize manual intervention, and further accelerate global trade efficiency. By enforcing strict data requirements and aligning with international standards, ICS2- ENS addresses key industry challenges and sets the stage for future advancements in customs processes.

154 Inbound Logistics • January 2025