2025-00551. Entry of Low-Value Shipments

Table 1—Summary of Total Entry Type 86 Test Benefits, Costs, and Cost Savings

[In 2023 dollars] ^{c  d}

Fiscal year	Benefits	Costs	Cost savings	Net benefits
	(A)	(B)	(C)	(= A−B + C)
Past Impacts
2020	$43,030,483	$4,316,816	$127,208,543	$165,922,210
2021	139,966,936	3,758,383	361,271,949	497,480,501
2022	129,442,889	3,678,928	351,131,510	476,895,471
2023	282,639,872	6,022,697	650,253,194	926,870,369
2024	311,757,221	6,547,586	717,241,795	1,022,451,430
Total undiscounted	906,837,401	24,324,410	2,207,106,990	3,089,619,981
Total present value (2 percent) a	948,430,560	25,682,967	2,312,234,507	3,234,982,100
Annualized (2 percent) b	178,675,386	4,838,429	435,603,206	609,440,162
Future Impacts
2025	340,874,571	7,072,475	784,230,396	1,118,032,491
2026	369,991,920	7,597,365	851,218,997	1,213,613,552
2027	399,109,270	8,122,254	918,207,598	1,309,194,614
2028	428,226,620	8,647,144	985,196,199	1,404,775,675
2029	457,343,969	9,172,033	1,052,184,800	1,500,356,736
2030	486,461,319	9,696,922	1,119,173,401	1,595,937,797
2031	515,578,669	10,221,812	1,186,162,002	1,691,518,859
2032	544,696,018	10,746,701	1,253,150,603	1,787,099,920
2033	573,813,368	11,271,591	1,320,139,204	1,882,680,981
2034	602,930,718	11,796,480	1,387,127,805	1,978,262,042
Total undiscounted	4,719,026,442	94,344,777	10,856,791,003	15,481,472,668
Total present value (2 percent) a	4,280,128,169	85,655,755	9,847,043,148	14,041,515,561
Annualized (2 percent) c	423,111,089	8,467,480	973,427,194	1,388,070,803
Past and Future Impacts (2020-2034)
Total undiscounted	5,625,863,843	118,669,187	13,063,897,993	18,571,092,649
Total present value (2 percent) a	5,228,558,729	111,338,723	12,159,277,655	17,276,497,661
Annualized (2 percent) d	361,328,921	7,694,262	840,288,674	1,193,923,333
Notes:
We present unrounded values in the table to facilitate replication of our analysis. For reporting purposes, and to reflect the uncertainty inherent in these estimates, we recommend rounding these estimates to two significant figures.
Table does not include transfers (see Table 2 for transfers).
a  Present value calculations use 2025 as the base year.
b  Benefits, costs, and net benefits for past years are annualized over a 5-year period from 2020 to 2024.
c  Benefits, costs, and net benefits for future years are annualized over a 10-year period from 2025 to 2034.
d  Benefits, costs, and net benefits for all years are annualized over a 15-year period from 2020 to 2034.

Table 2 illustrates the effects of the Entry Type 86 Test from 2025 through 2034 by presenting a distribution of the benefits, costs, cost savings, transfers, and net benefits experienced by each entity type. Administrative implementation activities produce an annualized net benefit of approximately $960 million (2 percent discount rate, ( print page 3063) 2023 dollars) and improvements in clearance time produce an annualized net benefit of approximately $420 million (2 percent discount rate, 2023 dollars). Changes in express fees and tariffs paid by consignees are considered to be transfers, producing $0 in net benefits. Importantly, impacts on social welfare and fiscal impacts are not additive; the former represents estimates of willingness to pay and opportunity costs, while the latter reflects changes in revenue.

Table 2—Summary of Entry Type 86 Test Annualized Impacts by Entity Type From 2025-2034

[2 Percent discount rate, in 2023 dollars]

Effect	U.S. Government	Trade/consumers	Net effect
Impacts on Social Welfare
Administrative Implementation	$972,773,259	($7,813,546)	$964,959,714
Transmitting Data	0	(7,267,112)	(7,267,112)
Programming	(227,558)	(612,630)	(840,188)
Training	0	0	0
Collecting New Data Elements	0	(360,180)	(360,180)
Time Savings	973,000,818	426,376	973,427,194
Improved Clearance Time	0	423,111,089	423,111,089
Total Increase in Social Welfare	972,773,259	415,297,543	1,388,070,803
Fiscal Impacts (Transfers)
Tariffs	(2,095,103,797)	2,095,103,797	0
Express Fees	(163,886,413)	163,886,413	0
Total Fiscal Impacts	(2,258,990,211)	2,258,990,211	0
Notes:
We present unrounded values in the table to facilitate replication of our analysis. For reporting purposes, and to reflect the uncertainty inherent in these estimates, we recommend rounding these estimates to two significant figures.
Costs are shown using parentheses.
a  Present value calculations use 2025 as the base year.
b  Impacts are annualized over 10 years from 2025 to 2034. We estimate the annualized impacts from the perspective of an individual in 2020, when entities started incurring costs or benefits related to the Entry Type 86 Test. This reflects the equal payment that would need to be made in each of the 10 years to equal the total present value of the costs and benefits.

The full regulatory impact analysis included in the docket of this rulemaking provides detailed discussions of key sources of uncertainty related to costs, benefits, and transfers of the Entry Type 86 Test. The full regulatory impact analysis also includes a quantitative sensitivity analysis to highlight the importance of key assumptions and presents the results in appendix A.

5. Proposed Rule Benefits, Costs, and Transfers

This proposed rule updates the data elements currently required under the Entry Type 86 Test. We estimate impacts likely to be experienced by CBP, customs brokers, software providers, ECOs, and consignees due to the provision of these additional data elements. While the proposed rule is expected to produce security benefits, we are unable to quantify these benefits in this analysis due to data limitations.^[68] As with our analysis of the Entry Type 86 Test, we estimate costs of the proposed rule using information obtained through discussions with CBP and interviews with the trade.^[69] Key cost categories include administrative implementation activities, such as software reprogramming, staff training, and additional data collection. Incremental changes in tariff or fee revenue relative to Baseline 1 are not anticipated.

For the three regulatory alternatives considered by CBP, we estimate the anticipated benefits, costs, and transfers under two baseline scenarios. We first consider the incremental effects of the proposed rule relative to a baseline scenario where CBP continues to implement the Entry Type 86 Test. This scenario reflects the most likely forecast of available entry types absent the proposed rule. CBP is not currently equipped to handle the now-sizable low-value shipment volumes manually without any automated clearance process like entry type 86. Reverting to an entirely manual process would be infeasible and contrary to CBP's mission to facilitate the entry of legitimate goods into the United States.

We also present results considering an alternative baseline scenario regarding the future availability of an automated entry process in the absence of a new rule. This alternative baseline scenario assumes that, beginning in 2025, the technology and processes developed for electronic filing and automated clearance under the Entry Type 86 Test would no longer be available for low-value shipments and, effectively, are reinstated with this rulemaking. This baseline scenario is a counterfactual used to illustrate the cumulative effects of this rulemaking and not an announcement of a change to the existing Entry Type 86 Test. The practical result of applying this alternative baseline scenario is an estimate of the cumulative impacts of (1) continuing to leverage the advances made with the implementation of the Entry Type 86 Test, while also (2) making enhancements to the process via the proposed rule. CBP recognizes that the public may have an interest in understanding the combined effect of the program that is being codified in the rulemaking as well as the modifications to the program under consideration in the proposed rule and this baseline scenario allows the reader to do that—the effects, when measured against this baseline scenario, are the total prospective effects of the Entry Type 86 ( print page 3064) Test and this rulemaking. For the purposes of this analysis, CBP considers the second baseline to be the primary baseline for this rulemaking.

Where possible, we quantify and monetize these impacts over a 10-year period from 2025 to 2034. Table 3 provides a summary of the costs, benefits, and transfers resulting from each regulatory alternative, including relevant chapters where these impacts are presented.

Table 3—Summary of the Incremental Impacts of Regulatory Alternatives Under Alternative Baseline Scenarios

Regulatory alternative a	Baseline scenario (2025-2034)
	Baseline 1: Entry Type 86 Test continues	Baseline 2: No Entry Type 86 Test
1. Codify the Entry Type 86 Test	Costs, benefits, and transfers are zero	Costs, benefits, and transfers of the proposed rule are equivalent to the future impacts estimated for Entry Type 86 Test.b
2. (Preferred) Enhanced entry with HTSUS waiver available	Costs, benefits, and transfers are presented in Chapters 7 to 9 of the full analysis	Costs, benefits, and transfers of the proposed rule are equal to the sum of the Entry Type 86 Test future impacts and the proposed rule impacts.b
3. Enhanced entry with no HTSUS waiver available	Costs, benefits, and transfers are presented in Chapters 7 to 9 of the full analysis, including unquantified costs associated with no waiver provision	Costs, benefits, and transfers of the proposed rule are equal to the sum of the Entry Type 86 Test future impacts, the proposed rule impacts, and unquantified costs associated with no waiver provision.b
Notes:
a  Detailed discussion of regulatory alternatives is available in Chapter 10 of the full analysis.
b  Detailed discussion of future Entry Type 86 Test impacts and this proposed rule's impacts is available in Chapters 3 to 6 and Chapters 7 to 9 of the full analysis respectively.

a. Preferred Regulatory Alternative: Baseline 1 (Entry Type 86 Test Continues)

Table 4 presents total present value costs assuming a baseline where the Entry Type 86 Test were to continue in the absence of this new regulation. Because benefits are unquantified, we are unable to calculate the likely net benefits of the proposed rule. Total present value costs of the proposed rule over the 10-year period of analysis are estimated to be approximately $110 million (2023 dollars), assuming a discount rate of 2 percent.

Table 4—Summary of Proposed Rule Benefits and Costs—Baseline 1: Entry Type 86 Test Continues

[In 2023 dollars]

Fiscal year	Benefits	Costs c	Net benefits d
2025	Positive Unquantified	$91,854,198
2026	Positive Unquantified	2,139,656
2027	Positive Unquantified	2,184,004
2028	Positive Unquantified	2,228,352
2029	Positive Unquantified	2,272,700
2030	Positive Unquantified	2,317,048
2031	Positive Unquantified	2,361,396
2032	Positive Unquantified	2,405,744
2033	Positive Unquantified	2,450,092
2034	Positive Unquantified	2,494,440
Total undiscounted	Positive Unquantified	112,707,628
Total present value (2 percent) a	Positive Unquantified	110,718,728
Annualized present value (2 percent) b	Positive Unquantified	12,084,247
Notes:
a  Present value calculations use 2025 as the base year.
b  Costs are annualized over a 10-year period from 2025 to 2034.
c  We present unrounded values in the table to facilitate replication of our analysis. For reporting purposes, and to reflect the uncertainty inherent in these estimates, we recommend rounding these estimates to two significant figures.
d  Net benefits are uncertain due to our inability to quantify the likely incremental security benefits of the proposed rule.

Table 5 presents the distribution of costs and benefits by entity type assuming a baseline where the Entry Type 86 Test exists. Affected entities include the U.S. Government (representing CBP, the Department of the Treasury, and PGAs) and trade/consumers (including customs brokers, software providers, ECOs, importers, and other industry participants, including consumers). Administrative implementation activities are likely to cost approximately $12 million (2023 dollars) on an annualized basis, assuming a discount rate of 2 percent. Security-related effects, including providing the data needed to help interdict fentanyl smuggling, result in positive benefits that we are unable to quantify due to data limitations. Improvements in clearance time, and changes in express fees and tariffs paid by trade participants, are unlikely to result from the proposed rule when compared to the baseline that includes the Entry Type 86 Test. ( print page 3065)

Table 5—Summary of Proposed Rule Annualized Impacts by Entity Type—Baseline 1: Entry Type 86 Test Continues

[2 Percent discount rate, in 2023 dollars]

Effect	U.S. Government	Trade/consumers	Subtotal
Impacts on Social Welfare
Administrative Implementation	($680,248)	($11,403,999)	($12,084,247)
Transmitting Data	0	0	0
Programming	(680,248)	(10,657,045)	(11,337,293)
Training	0	(35,450)	(35,450)
Collecting New Data Elements	0	(711,504)	(711,504)
Time Savings	0	0	0
Improved Clearance Time	0	0	0
Security	Positive Unquantified	Positive Unquantified	Positive Unquantified
Total Increase in Social Welfare	(680,248)	(11,403,999)	(12,084,247).
Fiscal Impacts (Transfers)
Tariffs	0	0	0
Express Fees	0	0	0
Total Fiscal Impacts	0	0	0
Notes:
We present unrounded values in the table to facilitate replication of our analysis.
Costs are shown using parentheses.
a  Present value calculations use 2025 as the base year.
b  Costs are annualized over 10 years from 2025 to 2034.

The full regulatory impact analysis included in the docket of this rulemaking provides detailed discussions of key sources of uncertainty related to costs, benefits, and transfers of this proposed rule. The full regulatory impact analysis also includes a quantitative sensitivity analysis to highlight the importance of key assumptions and presents the results in appendix A.

b. Preferred Regulatory Alternative: Baseline 2 (No Entry Type 86 Test)

Table 6 presents total present value costs assuming a baseline where the Entry Type 86 Test does not exist. Because security benefits of the Entry Type 86 Test and the proposed rule are unquantified, the likely cumulative net benefits of these interventions are underestimated. Assuming a baseline without the Entry Type 86 Test, total present value net benefits over the 10-year period of analysis are estimated to be at least $14 billion (2023 dollars), assuming a discount rate of 2 percent.

Table 6—Summary of Cumulative Benefits and Costs—Baseline 2: No Entry Type 86 Test

[In 2023 dollars]

Fiscal year	Benefits c	Costs	Cost savings	Net benefits d
	(A)	(B)	(C)	(= A − B + C)
2025	$340,874,571	$98,926,674	$784,230,396	$1,026,178,293
2026	369,991,920	9,737,021	851,218,997	1,211,473,897
2027	399,109,270	10,306,258	918,207,598	1,307,010,610
2028	428,226,620	10,875,495	985,196,199	1,402,547,323
2029	457,343,969	11,444,733	1,052,184,800	1,498,084,036
2030	486,461,319	12,013,970	1,119,173,401	1,593,620,750
2031	515,578,669	12,583,208	1,186,162,002	1,689,157,463
2032	544,696,018	13,152,445	1,253,150,603	1,784,694,176
2033	573,813,368	13,721,682	1,320,139,204	1,880,230,890
2034	602,930,718	14,290,920	1,387,127,805	1,975,767,603
Total undiscounted	4,719,026,442	207,052,405	10,856,791,003	15,368,765,040
Total present value (2 percent) a	4,280,128,169	196,374,484	9,847,043,148	13,930,796,832
Annualized (2 percent) b	423,111,089	20,551,727	973,427,194	1,375,986,556
Notes :
We present unrounded values in the table to facilitate replication of our analysis. For reporting purposes, and to reflect the uncertainty inherent in these estimates, we recommend rounding these estimates to two significant figures.
a  Present value calculations use 2025 as the base year.
b  Benefits, costs, and net benefits are annualized over a 10-year period from 2025 to 2034.
c  Benefits are underestimated due to our inability to quantify the anticipated security-related benefits of the proposed rule. These values reflect only the quantified benefits of the Entry Type 86 Test. The total benefits associated with a baseline without the Entry Type 86 Test would be the values presented in this table as well as additional positive unquantified benefits.
d  Net benefits are underestimated due to our inability to quantify the likely incremental security benefits of the proposed rule.

( print page 3066)

Table 7 presents the distribution of costs and benefits by entity type assuming a baseline where the Entry Type 86 Test does not exist. Administrative implementation activities are likely to produce a positive annualized net benefit of approximately $950 million (2 percent discount rate, 2023 dollars) and improvements in clearance time produce a positive annualized net benefit of approximately $420 million (2 percent discount rate, 2023 dollars). Security-related effects, including providing the data needed to help interdict illicit fentanyl, result in positive benefits that we are unable to quantify due to data limitations. Changes in express fees and tariffs paid by consignees are considered to be revenue transfers, producing $0 in net benefits. Importantly, impacts on social welfare and fiscal impacts are not additive; the former represents estimates of willingness to pay and opportunity costs, while the latter reflects changes in revenue.

Table 7—Summary of Proposed Rule Annualized Impacts by Entity Type—Baseline 2: No Entry Type 86 Test

[2 Percent discount rate, in 2023 dollars]

Effect	U.S. Government	Trade/consumers	Subtotal
Impacts on Social Welfare
Administrative Implementation	$972,093,012	($19,217,545)	$952,875,467
Transmitting Data	0	(7,267,112)	(7,267,112)
Programming	(907,806)	(11,269,675)	(12,177,481)
Training	0	(35,450)	(35,450)
Collecting New Data Elements	0	(1,071,684)	(1,071,684)
Time Savings	973,000,818	426,376	973,427,194
Improved Clearance Time	0	423,111,089	423,111,089
Security	Positive Unquantified	Positive Unquantified	Positive Unquantified
Total Increase in Social Welfare	972,093,012	403,893,545	1,375,986,556
Fiscal Impacts (Transfers)
Tariffs	(2,095,103,797)	2,095,103,797	0
Express Fees	(163,886,413)	163,886,413	0
Total Fiscal Impacts	(2,258,990,211)	2,258,990,211	0
Notes:
We present unrounded values in the table to facilitate replication of our analysis.
Costs are shown using parentheses.
a  Present value calculations use 2025 as the base year.
b  Costs are annualized over 10 years from 2025 to 2034.

The full regulatory impact analysis included in the docket of this rulemaking provides detailed discussions of key sources of uncertainty related to costs, benefits, and transfers of this proposed rule. The full regulatory impact analysis also includes a quantitative sensitivity analysis to highlight the importance of key assumptions and presents the results in appendix A.

c. Summary of Regulatory Alternatives

Table 8 summarizes estimates of net benefits for each regulatory alternative relative to the two different baseline scenarios described earlier. Incremental effects estimated relative to Baseline 1 reflect the net benefits of the enhancements to the existing Entry Type 86 Test that will be codified if the proposed rule is finalized. Incremental effects estimated relative to Baseline 2 reflect the cumulative net benefits of continuing to leverage the systems and processes put in place to implement the Entry Type 86 Test in combination with the enhancements included in the proposed rule. To reflect the uncertainty inherent in the analysis presented in this report, we round our results to two significant figures.

Table 8—Annualized Net Benefits of Regulatory Alternatives

[2 Percent discount rate, in 2023 dollars] ^{a  b  c}

Regulatory alternative	Baseline scenario
	Baseline 1: d Entry Type 86 Test continues	Baseline 2: e No Entry Type 86
1. Codify Entry Type 86 Test	$0	$1.4 billion + unquantified security benefits.
2. (Preferred) Enhanced entry with HTSUS waiver available	−$12 million + unquantified security benefits associated with enhanced data elements (e.g., URL)	$1.4 billion + unquantified security benefits associated with HTSUS and enhanced data elements (e.g., URL).
3. Enhanced entry with no HTSUS waiver available	−$12 million + unquantified security benefits associated with enhanced data elements (e.g., URL) −unquantified costs of obtaining HTSUS codes if no waiver is available	$1.4 billion + unquantified security benefits associated with HTSUS and enhanced data elements (e.g., URL)−unquantified costs of obtaining HTSUS codes if no waiver is available.
Notes:
a  To reflect the uncertainty inherent in these estimates, we round estimates to two significant figures.
b  Net benefits are annualized over a 10-year period from 2025-2034.
c  Implementation of the Entry Type 86 Test also results in substantive transfers between the U.S. Government and consumers in the form of reduced tariffs and fees. These transfers are summarized in Table 2. Because the transfers represent off-setting costs to the U.S. Government and benefits to consumers, their net benefit is $0. The enhancements considered in the proposed rule are unlikely to result in additional transfers.
d  Incremental effects estimated relative to Baseline 1 reflect the net benefits of the enhancements to the existing Entry Type 86 Test that will be codified if the proposed rule is finalized.
e  Incremental effects estimated relative to Baseline 2 reflect the cumulative net benefits of continuing to leverage the systems and processes put in place to implement the Entry Type 86 Test in combination with the enhancements included in the proposed rule.

B. Additional Requirements for Regulatory Analysis

Table 9 provides a cost accounting statement for the proposed rule where the baseline includes the Entry Type 86 Test. Table 10 provides the analogous information assuming the Entry Type 86 Test did not exist.

Table 9—A-4—Accounting Statement for the Proposed Rule—Baseline 1

[Entry Type 86 Test continues]

Category	Annualized estimate (in 2023 dollars) 1
Benefits:
Monetized benefits	None.
Quantified, non-monetized benefits	None.
Qualitative (unquantified) benefits	Improved security resulting from more efficient targeting of inbound low-value shipments. Improved security includes the interdiction of fentanyl smuggling, among other things. Enforcement of customs regulations plays a critical role in protecting the American public, environment, and economy.
Costs:
Monetized costs	$12 million.
Quantified, non-monetized costs	None.
Qualitative (unquantified) costs	None.
Transfers:
Monetized budgetary transfers	None.
Other monetized transfers	None.
Distributional Effects:
Effects on State, local, and/or tribal governments Effects on small businesses	Which entities are affected by the proposed rule depends on whether the costs associated with transmitting shipments through the enhanced entry process are passed on to consumers in the form of higher prices. If customs brokers and express consignment operators (ECOs) bear the costs, then at least 314 small businesses may be affected; however, only some medium and large volume brokers are projected to incur costs that exceed 1 percent of their annual revenues. If consignees bear the costs through increased prices, then any small business, organization, or government jurisdiction importing low-value shipments has the potential to be affected. The increase in the cost per shipment is estimated to be $0.01, or 0.03% of the average value of low-value shipments.
Effects on wages	Not anticipated.
Effects on growth	Not anticipated.
Source: Calculations using data sources described throughout the main text.
1  Present value calculations use 2025 as the base year. Costs are annualized over 10 years from 2025 to 2034 and reflect a 2 percent discount rate.

Table 10—A-4—Accounting Statement for the Proposed Rule—Baseline 2

[No Entry Type 86 Test]

Category	Annualized estimate (in 2023 dollars)
Benefits:
Monetized benefits	$420 million.
Quantified, non-monetized benefits	None.
Qualitative (unquantified) benefits	Improved security resulting from more efficient targeting of inbound low-value shipments. Improved security includes the interdiction of fentanyl smuggling, among other things. Enforcement of customs regulations plays a critical role in protecting the American public, environment, and economy.
Costs:
Monetized costs	$21 million.
Quantified, non-monetized costs	None.
Qualitative (unquantified) costs	Costs to brokers of verifying and assigning HTSUS codes the first time a new product is shipped. Because this cost category only applies to new products, and given the potential economies of scale, the omission of this cost estimate may result in only a minor overstatement of net benefits.
Cost Savings:
Monetized costs savings	$970 million.
Quantified, non-monetized cost savings	None.
( print page 3068)
Qualitative (unquantified) cost savings	None.
Transfers:
Monetized budgetary transfers	$2.3 billion.
Other monetized transfers	None.
Distributional Effects:
Effects on State, local, and/or tribal governments Effects on small businesses	Which entities are affected by the proposed rule depends on whether the costs associated with transmitting entry information through the enhanced entry process are passed on to consumers in the form of higher prices. If customs brokers, ECOs, and software providers bear the costs, then at least 314 small businesses may be affected; however, only some medium and large volume brokers and software providers are projected to incur costs that exceed 1 percent of their annual revenues. If consignees bear the costs through increased prices, then any small business, organization, or government jurisdiction importing qualifying low-value goods has the potential to be affected. However, costs to consignees are offset by the value of time savings and reduced tariffs and fees. The net effect is a decrease in the cost per shipment of $2.86, or a savings equal to approximately 8.9% if the value of a shipment.
Effects on wages	Not anticipated.
Effects on growth	Not anticipated.