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What You Need To Know Regarding the Section 321 De Minimis Value Increase

ABC Customs Brokers May 26, 2016

On February 24, 2016 President Barack Obama signed into law the Trade Facilitation and Trade Enforcement Act of 2015 (H.R. 644) (TFTE), also referred to as the Customs Reauthorization bill. This law addressed a bevy of trade topics, including the de minimis value for the entry of low value goods. Commonly referred to as Section 321, this legislative measure raised the Section 321 de minimis value from $200 or less to $800 or less. The Section 321 provision allows for low value entries, valued at $800 or less, to enter into the commerce of the U.S.duty free and without formal entry. For many importers this was very goods news as it reduced the amount of paperwork required on low value shipments, but it also created a potential compliance pitfall.

Section 321 Product Restrictions:

Goods requiring inspection as a condition of release, regardless of value, merchandise subject to Anti-Dumping / Countervailing duty (ADD/CVD), and certain products regulated by the following Partner Government Agencies (PGAs), may not qualify under Section 321:

  • 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)

Section 321 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.”

Under this regulation importers are only allowed to take advantage of the Section 321 benefit on one single transaction per day.

Carriers may make a Section 321 claim in conjunction with their eManifest filing, subsequently reducing the amount of paperwork on such low value transactions.

Best Practices:

Ensure that your carrier is not making multiple Section 321 claims. Carriers may elect to make the Section 321 claim in order to expedite the clearance process being unaware of whether the importers daily allowance has been reached or not. To avoid hefty penalties it is recommended that shipment filings be highly regulated in the following ways:

  • Identify the particular shipment the Section 321 claim will be used each day
  • Request that a formal entry be made on all other entries
  • Use the services of one customs broker to ensure import/export transactions are filed in a consistent manner
  • Build strong communication lines with the logistics team including carriers, freight forwarders, and customs brokers