Changing shipment origin won't wash: US CBP turns away whole truckloads

Misdeclared shipments are causing delays at US borders, with full truckloads being turned away if just one item is non-compliant, Canadian shipping company ChitChats warned this week. 

“As you know, China-origin goods have been excluded from de minimis entry into the United States. Our border crossings on 2 May and 3 May were denied due to some shipments being misdeclared, but were in fact of Chinese origin,” said ChitChats. 

It said any misdeclared shipments discovered during a US Customs inspection would result in the truck being turned around – taking with it any compliant shipments on board.  

“US CBP is thoroughly checking parcels for verification of country of origin, immediately refusing our entire truck upon discovery of a single misdeclared or ambiguous country of origin. Shipments crossing at the New York state border were refused again, and we are awaiting the status of the shipments crossing in Washington. 

“We’re actively identifying and removing misdeclared packages from our trucks so we can promptly schedule an additional border crossing for compliant goods,” it added.  

ChitChats said evading tariffs or de minimis charges was a “serious offence” and penalties would be issued if a shipment’s “country of origin, value, or any other detail intended to evade tariffs” had been altered.  

The firm’s own measures could include a C$1,000 fee, disposal of the misdeclared shipment and termination of the client’s ChitChats account, and it warned that CBP would likely take its own measures as well.  

“CBP will retain your information, making future attempts to circumvent tariffs highly likely to fail, and can impose civil penalties up to $50,000 and bar you from shipping to the US, regardless of carrier or method,” it warned.  

It was reported by Criptopolitan that some Chinese social media sites were displaying adverts that promised to lower tariffs by sending goods to another Asian country, from where they wouldl leave with a fresh certificate of origin, allowing them to clear US customs at a lower duty rate. 

But US trade rules state that a shipment must undergo “substantial transformation” — processing that adds real value — before it can legally claim a new national origin.  

“One post on lifestyle app Xiaohongshu urged shippers to ‘transit Malaysia to ‘transform’ into South-east Asian goods’, and another advised: ‘Wash the origin in Malaysia for smooth customs clearance,” read the Criptopolitan article. 

While “origin washing” is a main tactic, the site also revealed that some shippers were mixing expensive items with cheaper goods in a consignment and declaring an average price, so the duty bill is lower. 

However, Malaysia’s Ministry of Investment, Trade and Industry (MITI) announced on Monday that from 6 May it would be the sole issuer of all non-preferential certificates of origin (NPCOs) for shipments to the US, “to address the issue of possible transhipment from certain countries to the US market through Malaysia’s entry and exit points”. 

And it added:”Issuance of NPCOs to the US market by business councils, chambers, or associations appointed by MITI will cease immediately. MITI will enhance audits on NPCO applicants, investigate and take the necessary action in collaboration with the Royal Malaysian Customs Department to curb any transhipment offences to the US.”