On February 18, 2021, U.S. Customs and Border Protection (CBP) released a one-pager on a July, 28 2020, Administrative Ruling related to domestic warehouses and fulfillment centers.

What is the Scope of this Ruling?

19 U.S.C. § 1321(a)(2)(c) enables CBP to admit qualifying merchandise duty- and tax-free provided that the merchandise is imported by “one person on one day” and has a total fair retail value in the country of shipment of $800 or less. On July 28, 2020, CBP issued an administrative ruling recognizing fulfillment centers and domestic warehouses as the “one person” for unsold merchandise. Under this ruling, foreign owners/sellers of unsold merchandise may also qualify as the “one person” provided their identity is presented to CBP and the total value of their merchandise imported on one day is $800 or less.

What is CBP Doing to Enforce?

Through informed compliance, CBP is working closely with its trade partners to identify and educate entities who are affiliated with large volumes of ineligible shipments. CBP may take enforcement action, including against egregious and repeat violators, including placing holds on ineligible shipments, revoking Section 321 privileges, or requiring formal entry until sustained compliance is achieved.

What Can You Do to Facilitate Compliance?

Domestic Warehouse and Fulfillment Center Consignees who receive over $800 of unsold merchandise in one day can coordinate with merchandise owners to help ensure their shipments comply with Section 321 regulations. Ø Merchandise Owners may qualify for Section 321 provided the total value of their shipments do not exceed $800 on one day, and their identity (first and last name or name of company) is presented to CBP via the manifest or Entry Type 86 filing. Ø Shippers and Carriers should refer to CBP’s CAMIR and CATAIR updates to ensure the merchandise owner’s identity is presented appropriately to CBP. See below examples.

For more information please see our previous posts below or reach out to John Brew, Frances Hadfield, or Clayton Kaier.

Customs Archives | International Trade Law (cmtradelaw.com)

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Photo of John Brew John Brew

John Brew is the co-chair of Crowell & Moring’s International Trade Group and a partner in the firm’s Washington, D.C. office. He has extensive experience in import and export trade regulation, and he regularly advises corporations, trade associations, foreign governments, and non-governmental organizations…

John Brew is the co-chair of Crowell & Moring’s International Trade Group and a partner in the firm’s Washington, D.C. office. He has extensive experience in import and export trade regulation, and he regularly advises corporations, trade associations, foreign governments, and non-governmental organizations on matters involving customs administration, enforcement, compliance, litigation, legislation and policy.

John represents clients in proceedings at the administrative and judicial levels, as well as before Congress and the international bureaucracies that handle customs and trade matters. He advises clients on all substantive import regulatory issues handled by U.S. Customs and Border Protection and Immigration and Customs Enforcement, such as classification, valuation, origin, marking, tariff preference programs, other agency regulations, admissibility, import restrictions, quotas, drawback, audits, prior disclosures, penalties, investigations, Importer Self Assessment and Customs-Trade Partnership Against Terrorism programs, importations under bond, the Jones Act, vessel repairs, and foreign trade zone matters.

Photo of Frances P. Hadfield Frances P. Hadfield

Frances P. Hadfield is a counsel in Crowell & Moring’s International Trade Group in the firm’s New York office. Her practice focuses on forced labor and withhold release orders (WRO), import regulatory compliance, and customs litigation. She regularly advises corporations on matters involving…

Frances P. Hadfield is a counsel in Crowell & Moring’s International Trade Group in the firm’s New York office. Her practice focuses on forced labor and withhold release orders (WRO), import regulatory compliance, and customs litigation. She regularly advises corporations on matters involving customs compliance, audits, customs enforcement, as well as import penalties.

Frances represents clients before the U.S. Court of International Trade and the U.S. Court of Appeals for the Federal Circuit, as well as in proceedings at the administrative level. She advises corporations on both substantive federal and state regulatory issues that involve U.S. Customs and Border Protection, the Federal Trade Commission, Food and Drug Administration, and U.S. Fish & Wildlife in matters pertaining to product admissibility, audits, classification, import restrictions, investigations, marking, licenses, origin, penalties, and tariff preference programs.