Tariff Watch: Successful CAPE Phase 3 Launch, CBP Proposes New Rules for Low-Value Postal Shipments

Welcome to the latest edition of Tariff Watch, the weekly series from J.M. Rodgers that keeps busy importers, manufacturers, and supply chain leaders ahead of rapidly shifting US trade policies.

The first full week of October saw the long-anticipated Phase 3 of the CAPE Portal successfully go live, with hundreds of declarations accepted on day one and billions in potential refunds already processing. Meanwhile, after the de minimis exemption was permanently suspended earlier this year, CBP proposed new rules that would further change how low-value international shipments enter the postal system. Here’s the latest for this week:

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What’s New

• Successful Phase 3 launch: The latest phase of the CAPE portal went live last Tuesday, October 6, after months of litigation in the Court of International Trade (CIT). CAPE Phase 3, first announced in June, lets active CIT litigants file IEEPA tariff refunds for finally liquidated entries. By noon on launch day, CBP said in a CIT filing that it had already accepted some 477 declarations for processing. In the filing, CBP said that as of October 2, CAPE had processed $136.6 billion in potential and certified refunds across earlier phases, with $126 billion sent to the Treasury Department for disbursement.
• CBP proposes new informal mail entry rules: US Customs and Border Protection (CBP) published a Notice of Proposed Rulemaking (NPRM) last Thursday that would fundamentally alter how low-value shipments are cleared. If adopted, the new rules would replace the current informal mail entry process with the new ACE Entry Type 13 (ET13). The new rule would also require that CBP not release international mail shipments valued at $2,500 or less until an entry is filed. In addition, the NPRM proposes moving the filing deadline for Entry Type 11 (ET11) to on or before the date of importation, rather than the current 15 calendar days after arrival.
• New bond requirements in NPRM: Another significant proposed change in the October 8 NPRM is a bond requirement for low-value shipments. Under the proposal, every ET11 and ET13 filer would need a single transaction bond or a continuous bond to cover import duties. If enacted, the NPRM would set minimum liquidated damages amounts. For a breach of a bond condition on ET11 or ET13, damages would be the greater of the merchandise value or $1,000. For restricted goods or alcoholic beverages, damages would be the greater of three times the value or $1,000. CBP is soliciting public comment on the proposed rules until December 7.

Who’s Impacted

Here’s who’s most affected by this week’s news:

• IEEPA litigating importers: Following months of waiting, importers who are active CIT plaintiffs with finally liquidated entries can now actively process their refunds through CAPE Phase 3. The high number of declarations processed on launch day portends a smooth refund experience.
• E-commerce sellers and low-value importers: The proposed requirement that every ET11 and ET13 filer hold a bond would tighten compliance constraints for e-commerce shippers and businesses that rely on low-value informal entries. In particular, the $1,000 penalty floor for bond breaches could be difficult for smaller e-commerce shippers to bear.

What We’re Seeing

Agile importers take every change in stride. Here’s how the J.M. Rodgers team saw them react this past week:

• Rapid CAPE filings: With Phase 3 now live, eligible plaintiffs are actively filing their declarations to secure their share of the billions in accepted IEEPA refunds. Companies are prioritizing the submission of their historical entry data to avoid potential portal congestion or processing delays.
• Evaluating new abandonment risks for mail: Many in the trade community are contemplating the severe consequences outlined in the new NPRM for postal shipments. Because the proposal says international mail valued at $2,500 or less that isn’t properly entered within 15 days of importation would be considered voluntarily abandoned, shippers are mapping their informal entry volumes and testing their data to ensure they can meet the proposed timelines.

What We’re Monitoring

Here are the ongoing stories we’re watching this week:

• The polysilicon MIP rollout: We’re watching to see how the solar and semiconductor supply chains are preparing for December 4, when new Section 232 minimum import prices (MIPs) and a 15% ad valorem tariff on covered polysilicon derivatives take effect. Importers are now adjusting their procurement contracts to ensure entered values meet the required price floors to avoid owing additional duties.
• The NPRM comment deadline: We will be closely monitoring the industry’s response to CBP’s proposed informal entry changes leading up to the December 7 deadline for public comments

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That wraps another week of US trade policy news. To make sure you don’t miss a thing, subscribe to Tariff Watch here. See you next week!

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Sources

• Hundreds of Phase 3 Declarations Already Accepted, Trade Law Daily
• CBP Starts Refunds for Finally Liquidated Entries, Supply Chain Dive
• Low Value Shipments, a Proposed Rule by CBP, Federal Register
• CBP Proposes Bonds for Low-Value Informal Entries, Diaz Trade Law
• The 15-Day Entry Window Is Being Closed, Docket