A de minimis shipment commonly referred to as Section 321, allows for goods valued at $800 USD or less, to enter duty-free into the U.S. Under this legislation they are also permitted to enter without formal entry. Therefore, this regulation is a great option for importers to save money and time.
Law previous to February 24, 2016, only allowed for a de minimis value of $200 or less.
Some goods may not qualify under Section 321 under the following circumstances.
Section 321 Restrictions
- Goods needing inspection as a condition of release, regardless of value
- Merchandise subject to Anti-Dumping / Countervailing duty (ADD/CVD)
- Products regulated by the following Partner Government Agencies (PGAs),:
- *Food and Drug Administration (FDA)
- Food Safety Inspection Service (FSIS)
- National Highway Transport and Safety Administration (NHTSA)
- Consumer Product Safety Commission (CPSA)
- United States Department of Agriculture (USDA)
*As of July 2017, the FDA has provided exemptions for this restriction for the following goods:
- Radiation-emitting non-medical devices
- Biological samples for laboratory testing
- Food (excluding ackees, puffer fish, raw clams, raw oysters, raw mussels, and foods packed in airtight containers stored at room temperature)
Although the Section 321 option reduces the amount of paperwork required for low-value shipments, it creates a potential compliance pitfall.
Section 321 Daily Restriction
Especially relevant to importers is the daily restriction. As mentioned by authors Teresa M. Polino, Orisia K. Gammell and Julia L. Diaz in the Arent Fox LLP article Did You Know: The 2015 Trade Enforcement Act Can Save Importers Money?, “this increase applies to shipments of articles imported by one person (e.g., a company) on one day, other than in the case of articles sent as gifts from a person in foreign countries or in the case of articles accompanying and for the personal or household use of a person arriving in the U.S.”
As a result of this daily restriction, importers can only take advantage of the Section 321 benefit on one single transaction per day.
How to Declare Section 321
Goods valued at $800 USD or less can enter duty-free, without formal entry or eManifest into the U.S. Keep in mind that if entering with a shipment that does require an eManifest, the following steps will indicate to U.S. Customs and Border Protection (CBP) that a Section 321 is on board.
- Within the ACE eManifest select the shipment type ‘section 321.’
- Enter a shipment control number for the goods
- Include goods details including shipper, consignee, value, commodity, and country of origin.
- Submit the eManifest to U.S.CBP
In addition, the carrier will need to provide the section 321 goods details and paperwork to the border officer upon request.
Since it is not a formal entry, there will be no entry number provided by U.S. CBP for section 321 shipments.
In conclusion, ensure that your carrier is not making multiple Section 321 claims. Carriers may elect to make the Section 321 claim to expedite the clearance process. However, they may be unaware of whether the importer reached their daily allowance or not. To avoid penalties as a result of multiple transactions per day, we recommended that importers regulate shipment filings in the following ways:
- Identify the particular shipment the Section 321 claim will be used each day
- Request creation of formal entries on all other entries
- Use the services of one customs broker to ensure filing of import/export transactions are consistent
- Build strong communication lines with the logistics team including carriers, freight forwarders, and customs brokers
Have questions or comments regarding this provision and how you can ensure that you are taking advantage of Section 321 within the compliance guidelines? Ask us comments section below.