Modernizing De Minimus: Upcoming New ‘Section 321’ Requirements for Truck Shipments

Trade Update • November 06, 2018

As part of an effort to modernize the handling of certain low-value imports, U.S. Customs and Border Protection has announced that beginning next year all commercial truck shipments containing “Section 321 merchandise” will be required to file an advance electronic manifest in accordance with the guidelines specified in the Trade Act of 2002.

Which goods does this apply to?

The expression “Section 321 merchandise” refers to a provision of the Trade Facilitation and Trade Enforcement Act of 2015 which raised the maximum value of goods that can be imported into the United States free of duty and tax (the so-called de minimis value) from $200 to $800.

In customs parlance “Section 321” is therefore a type of informal entry for shipments not exceeding $800 in value that is limited to one shipment per individual or company per day (it also cannot be one of several lots covered by a single order or contract).

There are a number of exceptions that don’t qualify for Section 321 treatment such as goods requiring inspection before release, goods subject to anti-dumping or countervailing duty, quota-class goods, and goods regulated by various partner government agencies (PGAs) such as the Food and Drug Administration and the U.S. Department of Agriculture.

Shipments qualifying for Section 321 release were exempted from the requirement to provide advance cargo information called for by the Trade Act of 2002 due to an administrative policy decision made by CBP during implementation of the legislation.

Under the current process, if a highway carrier entering the U.S. has a load consisting only of Section 321 eligible shipments, it is not required to file an ACE (Automated Commercial Environment) manifest for that truck. In cases though where there are other Shipment Types included in the load then all shipments must be manifested, including the Section 321 shipments.

Why is this change being made?

CBP states that the steadily rising volume of e-commerce shipments combined with the 2016 increase in de minimus value has resulted in “significant growth” in the number of imports being manifested and released under Section 321.

At the same time, however, CBP also notes that the lack of an electronic manifest has eliminated its ability to conduct a risk assessment or perform advance targeting within the Automated Targeting System, which the agency says has resulted in slower processing and longer wait times.

Future Developments

As indicated at CBP’s 2018 Trade Symposium in Atlanta this summer, the agency plans to roll out entry type 86 in the Automated Broker Interface (ABI) for de minimis shipments involving PGAs at some unspecified time early next year.

With regards to goods which don’t have any PGA requirements, CBP’s current plan is to continue clearing such low-value shipments based on their manifest, according to CBP Executive Director for Trade Policy and Programs John Leonard, who cautioned that the agency has the authority to require a more formal entry if deemed necessary.

For Section 321 ACE entries, CBP is reportedly considering requiring the shipper, unique identifier, consignee, country of origin, quantity, retail value, 10-digit Harmonized Tariff Schedule number and the importer of record number.

All of these planned changes have the aim of giving CBP much greater visibility into low-value shipments while also providing PGAs with required data on such imports.

Implementation & Enforcement

There are multiple ways to submit a 321 manifest, as outlined on the CBP’s website. Highway carriers can file import eManifests in ACE via the ACE Secure Data Portal, electronic data interchange, or a third party solution. The ACE Portal is a web-based application is free to use and requires only a computer with an internet connection. While mainly a reporting and monitoring tool, the portal can be used to submit truck import manifests to CBP and access custom reports.

Starting November 26, 2018, CBP will begin a phased approach for non-compliance with conveyances being referred to secondary for processing. Effective January 1, 2019, carriers that have been determined not to have made any attempt to comply with the new electronic manifest requirement will be issued a monetary penalty of $5,000 for the first offence and $10,000 for each one thereafter.