Senators Urge Treasury, Homeland Security to End Trade Loophole, Stop Fentanyl Smuggling

A Customs and Border Protection officer works with a dog to check parcels for fentanyl at John F. Kennedy Airport's U.S. Postal Service facility in New York City on June 24, 2019. Johannes Eisele/AFP via Getty Images

Four Democratic senators are calling on the Biden administration to eliminate a trade exemption that allows packages valued at less than $800 to ship to the United States with relatively little customs scrutiny, citing concerns that drug traffickers are exploiting this “loophole.”

In a letter dated Oct. 28, the senators told Treasury Secretary Janet Yellen and Homeland Security Secretary Alejandro Mayorkas that they should use their statutory authority to eliminate the trade provision known as the de minimis exemption for e-commerce shipments.

“We are particularly concerned by reports that drug traffickers are abusing the de minimis exemption to smuggle illicit fentanyl and its precursor chemicals into the United States, turning an exemption into a loophole,” the lawmakers wrote.

The four lawmakers are Sens. Elizabeth Warren (D-Mass.), Richard Blumenthal (D-Conn.), Sherrod Brown (D-Ohio), and Sheldon Whitehouse (D-R.I.). Warren, Brown, and Whitehouse are members of the Finance Committee, and Blumenthal is on the Homeland Security Committee.

The letter referenced a recent Reuters investigation revealing how a maintenance worker was able to receive more than 15,432 pounds of fentanyl precursors in small packages shipped to his home in Tucson, Arizona, from China.

“The opioid epidemic is a serious threat in the United States that has killed hundreds of thousands of Americans,” the senators wrote.

“We must use every tool to combat it and protect American families.”

Earlier this month, eight China-based companies and eight Chinese nationals were indicted for allegedly trafficking synthetic opioids and fentanyl precursors.

The defendants “openly advertised their ability to thwart border officials,” used evasive tactics such as mislabeling the contents of shipments, and had shipped “a stable supply of precursor chemicals” to clients in the United States and Mexico for years, according to the Department of Justice (DOJ).

In July, the DOJ announced the indictment against a Chinese national for allegedly exploiting the trade loophole to import more than 2 tons of fentanyl precursors from China.

U.S. Customs and Border Protection (CBP) processes about 4 million de minimis shipments a day. From 2018 to 2021, CBP data showed that between 61 percent and 77 percent of de minimis shipments originated from China and Hong Kong.

In September, the White House announced new steps to crack down on the de minimis loophole. That decision “represented a first step toward addressing abuses of the de minimis provision,” the senators wrote, adding that “additional actions are necessary.”

The Coalition for a Prosperous America applauded the White House’s announcement but said the proposed measures are “long overdue.”

Lawmakers from both parties have introduced several bills that aim to rein in the de minimis exemption, particularly for shipments from China.

In June, Sen. Marco Rubio (R-Fla.) and Brown introduced the Import Security and Fairness Act to end the de minimis loophole for goods from China and Russia and require the CBP to obtain more information about de minimis packages entering the United States.

“This loophole is essentially a backdoor way for competitors like China to ship goods into the U.S. without paying the tariffs and other taxes and fees they owe,” Brown said in a statement at the time. “Our bill would stop Chinese companies from abusing our trade laws.”

A companion version of the legislation was introduced in the House by Reps. Neal Dunn (R-Fla.) and Earl Blumenauer (D-Ore.).

Warren, Brown, Whitehouse, and Blumenthal also asked Yellen and Mayorkas to respond to several questions before Nov. 12, including the DHS’s current estimates of the amount of fentanyl and the amount of illicit trade that enters the United States annually via the de minimis loophole.

“We urge you to act quickly and use your authority to protect Americans from drug dealers and predatory online vendors who use this loophole to send dangerous substances over the United States border,” the senators wrote.

Reuters contributed to this report.