The ongoing trade war between the United States and China has increased tariffs on a wide variety of goods. However, thanks to Section 321 de minimis, these increased import duties are overridden for goods valued at $800 USD or less.
Using this statute allows businesses to import products that might not have been cost-effective before. This can give them a competitive edge and increase their profit margins.
De Minimis
De Minimis customs clearance, also referred to as Section 321 customs clearance, allows goods valued at $800 USD or less to enter the United States duty-free. This international trade regulation benefits global e-commerce without jeopardizing customs and border protection.
However, there are some limits to this. For instance, a business must not make more than one 321 shipment per day and it can’t be part of a larger order that is being sent to multiple locations.
As global eCommerce shipments have grown to over 1 trillion dollars in 2017, many regulators and stakeholders have begun to examine what additional data elements need to be collected ahead of importation to better separate legitimate e-commerce shipments from illegitimate ones.
To address this need, CBP is testing a new ACE entry type called Informal De Minimis that will allow self-filers and customs brokers to electronically submit Section 321 low-valued shipments. This will help to address the growing volume of these shipments and facilitate cross-border e-commerce.
Informal Entry
A Customs Entry is an official statement of specific information about your imported merchandise. It includes the type of goods, country of origin, value, and approximate amount of duties that you expect to pay on your shipment.
Informal entries generally do not require a bond and are primarily used for commercial imports that are less than $2500 in value. However, some products are restricted from informal entry regardless of value, including high-risk items and textiles.
Formal entries are required for shipments valued at $2,500 or more and must include a surety bond to cover any potential duties, taxes and charges that may accrue. They also include detailed information about the import transaction and commercial documents pertaining to the transaction.
In addition to these requirements, formal entries must be filed on CBP Form 7501 (OMB Control Number 1651-0022) or its electronic equivalent. They must also be accompanied by a minimum of $25 in Merchandise Processing Fees.
ACE
If you’re shipping low-value goods into the United States under Section 321, you can speed up your customs clearance by using the Automated Commercial Environment (ACE) system. This web portal allows trade companies, government agencies, and CBP to communicate and access customs reports.
ACE is designed to simplify the import process and streamline paperwork through a single portal that collects, distributes, and processes import data traditionally collected on paper, consolidating it into what are known as message sets. It can be used to secure faster customs clearance processing and compliance for more than 2 Million daily shipments.
ACE is also an important tool for managing duties and fees. Participants can use ACE Periodic Monthly Statements to pay duties and fees on a monthly basis, rather than transaction by transaction.
Customs Brokers
Customs Brokers are a convenient way to get shipments cleared and shipped on time. They can reduce delays and hassles, simplify paperwork management, navigate trade standards and regulations, and even manage documentation development and submission on your behalf.
A good broker must be knowledgeable about your goods, as well as the U.S. customs process, so they can keep you up to date on the latest changes. They can also help you decide which tariffs are best for your shipments.
Delays are one of the biggest headaches facing eCommerce merchants today. Luckily, Section 321 can help you avoid them.
The low value-ceiling and duty-free release under this entry type are great for eCommerce fulfillment. However, it can be tricky to file this entry type correctly.
This entry type is based on the Automated Commercial Environment (ACE), which allows importers to speed up clearance processing and compliance. It also helps them streamline their logistics process and minimize shipping costs.
