A de minimis shipment, also called a Section 321 shipment, allows for goods valued at $800 US Dollars or less to enter duty-free into the United States. Section 321 (19 U.S.C. 1321) is the statute that describes de minimis. With the passage of the Trade Facilitation and Trade Enforcement Act (TFTEA) (2016), the value amount increased from $200 to $800. Significantly, importers are permitted to enter these de minimis value shipments of goods without making a formal entry with Customs, such as on a Form 7501. This regulation provides a great option for importers to save money and time. However there are restrictions (listed below):
Section 321 Restrictions
- Goods needing inspection as a condition of release (regardless of value)
- Quota-class merchandise
- Merchandise subject to Anti-Dumping Duty (ADD) and/or Countervailing Duties (CVD)
- Products regulated by the following agencies:
- U.S. Department of Agriculture (USDA)
- Food Safety Inspection Service (FSIS)
- National Highway Transport and Safety Administration (NHTSA)
- Consumer Product Safety Commission (CPSA)
- Food and Drug Administration (FDA) *
*However, as of July 2017, the FDA provided exemptions for this restriction for the following goods:
- Food (excluding ackees, puffer fish, raw clams, raw oysters, raw mussels, and foods packed in airtight containers stored at room temperature)
- Biological samples for laboratory testing
- Radiation-emitting non-medical devices
Further FDA guidance is available here:
Potential Import Compliance Pitfalls
Although the Section 321 shipment option reduces the amount of paperwork required for low-value shipments, it does create some potential compliance pitfalls. Notably, the single transaction requirement. The Section 321 benefit applies only to shipments of articles imported by one person (e.g., a company) on one day. As a consequence, importers can only take advantage of the Section 321 benefit on one single transaction per day.
Often, carriers may elect to make the Section 321 claim to expedite the clearance process. An importer’s carrier will need to provide the section 321 goods details and paperwork to CBP officials upon request. Because it is not a formal entry, no entry number is provided for section 321 shipments. However, an importer may make a self-filing.
Importers may choose to file informal entries without using Customs brokers.
Once the carrier notifies the importer of the shipment’s arrival date, the importer must personally inform the entry port’s Customs office that they will file an informal entry to process and pick up the merchandise. Importers making self-filings will need invoices, bills of sale and valid identification if they want to claim the goods personally at the port.
If the merchandise is arriving at a distant port, and the importer has not arranged for freight or courier service, the importer can authorize another person to clear the goods on their behalf by writing a letter to the CBP Port Director. The letter must include sufficient details about the shipment proving that the rightful owners of the merchandise. Any shipments that are not picked up within 15 days of arrival will be sent to a warehouse and the recipient will be responsible for the storage fees. Goods unclaimed after six months in the warehouse may be sold at auctions.
How to Declare a Section 321 Shipment
- 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 CBP
Avoiding CBP Penalties and Problems
In order to avoid penalties as a result of multiple transactions per day, importers may wish to consider controlling their shipment filings in the following manner:
- Identify the particular shipment the Section 321 claim will be used each day.
- Use a customs broker to ensure consistent filing of import/export transactions.
- Communicate regularly with the logistics team including carriers, freight forwarders, and customs brokers.
If you have any questions regarding these de minimis shipments or are interested in developing a program to take advantage of this benefit please contact our team.