Customs Implements New Programs for Duty-Free de Minimis Shipments.

E-Commerce and Section 321 Shipments

Section 321(a)(2)(C) of the Tariff Act of 1930, as amended, authorizes CBP to provide an administrative exemption to admit free from duty and tax shipments of merchandise (other than bona fide gifts and certain personal and household goods) imported by one person on one day having an aggregate fair retail value in the country of shipment of not more than $800. This exemption is known as a de minimis entry. CBP has created Section 321 programs to enable the agency to monitor and protect against illegitimate trade while providing the public the benefits of duty free shipments for qualified imports.

To learn more about these programs, select program overview.

The Section 321 de minimis provision has attracted interest of late. On February 24, 2016, the Trade Enforcement and Trade Facilitation Act of 2015, Pub. L. 114-125, 130 Stat. 122 ("TFTEA"), was signed into law, which increased the de-minimis value exemption under 19 U.S.C. § 1321 from $200 to $800. Accordingly, beginning March 10, 2016, articles valued at $800 or less, which are imported by one person on one day, are eligible for duty free entry, under 19 U.S.C. § 1321(a)(2)(C). Because of this increase in value, merchants have expressed their desire to apply the de-minimis value exemption to withdrawals from FTZs. Specifically, bulk commercial merchandise shipped to the United States would be brought into the port limits and admitted into an FTZ. Once an e-Commerce purchase, valued at $800 or less is made, based on the aggregate purchase by a single customer on a single day, the merchants propose to enter the merchandise using weekly informal entry procedures pursuant to Section 321 of the Tariff Act of 1930, as amended (19 U.S.C. § 1321) and U.S. Customs and Border Protection ("CBP") Regulations: 19 C.F.R. §§ 10.151, 10.153, 143.21, and 143.23. In Binding Ruling H282601 of September 18, 2018, CBP responded to the American Apparel and Footwear Association, stating:

"Because the merchandise is imported in a bulk consolidated shipment valued at over $800 at importation, 19 C.F.R. § 10.153(d) prevents the goods from leaving the FTZ duty free under 19 C.F.R. § 10.151. Moreover, under Section 321, the $800 per day limit applies to the AAFA Members at the point of importation and not to the individual purchasers subsequent to importation. Accordingly, the shipments and transactions proposed by AAFA, valued over $800 at importation, do not qualify for duty-free treatment and informal entry under the administrative exception of Section 321."

With the rise of the de minimis to $800 we have seen more online retailers taking advantage of it. For example, Sears has a warehouse in Canada for de minimis shipments of apparel direct to consumers in the U.S. Customs has advised online retailers that they must be careful to follow the rules for Section 321, including the "single customer on a single day" provision.