Project Description
Understanding the Differences Between Section 321 and Entry Type 86
Navigating the intricacies of U.S. customs and import regulations can be daunting, especially for shipments valued under $800 USD.
Understanding the nuances of customs procedures is essential for businesses engaged in international trade. Two critical programs facilitating the importation of goods with minimal hassle are Section 321 and Entry Type 86 (T86).
These programs are pivotal in streamlining the import process for shipments valued under $800 USD, but distinguishing between the two can be confusing.
Although these programs serve similar purposes, they have distinct differences and requirements. This guide unpacks both programs, providing clarity on how they operate and what importers need to know to comply with regulations.
Section 321: How to Release on Manifest
Section 321 is a provision under U.S. law that allows for the duty-free importation of goods valued at $800 or less per daily shipment. This regulation is designed to expedite the clearance process for these types of shipments, thereby reducing administrative burdens and costs for importers.
What are the Key Features of Section 321?
Statutory Basis
Section 321 is codified in Title 19 of the U.S. Code, which governs customs duties and regulations. It permits the release of goods by one person in one day if the total value does not exceed $800 USD.
Eligibility Criteria
To qualify for Section 321, the shipment must be imported per person, per day, and the total value of the goods must not exceed $800 USD. This provision excludes goods that require Partner Government Agencies (PGAs) oversight, such as FDA-regulated products, in addition to goods subject to antidumping and/or countervailing duties.
Process Overview
Section 321 shipments are processed through an informal entry process known as “release from the manifest,” simplifying the documentation and clearance procedures.
Required Data Elements
Section 321
Importers must provide specific data elements (some are optional and identified as such) to facilitate the entry of goods under Section 321, including:
- Importer of Record Number (Optional): The unique identifier for the importer, usually an Employer Identification Number (EIN) or Social Security Number (SSN).
- Consignee Number (Optional): The unique identifier for the consignee, typically the EIN or SSN of the receiving party. Generic descriptions are deemed unacceptable – see a list of these vs. acceptable ones.
- Commodity Description: A detailed description of the goods being imported.
- Harmonized Tariff Schedule (HTS) Number (Optional): The HTS code classifies goods for tariff purposes and is optional provided that the description is specific/precise or is only required to the 6-digit level.
- Value of the Goods: The total value of the goods must be $800 or less.
- Country of Origin: The country where the goods were manufactured or produced.
- Quantity of Goods: The total quantity of each good being imported.
- Gross Weight of Goods: Lbs/Kg of the total goods for each shipment.
- Shipment Tracking Number: Provided by the carrier for the shipment.
- Shipper’s Name and Address: The name and address of the entity sending the goods.
- Consignee’s Name and Address: The name and address of the entity receiving the goods.
- Carrier Code: The carrier’s Standard Carrier Alpha Code (SCAC) or International Air Transport Association (IATA) code.
- Port of Entry: The U.S. port where the goods will enter the country.
- Arrival Date: The expected date of arrival of the goods.
Enhanced Data Requirements
To qualify for Section 321, the shipment must be imported by one person in one day, and the total value of the goods must not exceed $800 USD. This provision excludes goods that require Partner Government Agencies (PGAs) oversight, such as FDA-regulated products, in addition to goods subject to antidumping and/or countervailing duties.
Electronic Filing & HTS Code
T86 entries are filed electronically through the ACE system, which makes the process more efficient and reduces paperwork. A 10 digit HTS (Harmonized Tariff Schedule) code is required.
Importer of Record Number
An importer of record number is required, only if goods are subject to Partner Government Agencies (PGAs).
Compliance with Other Government Agencies
Ensuring that the imported goods meet the requirements of other agencies, such as the FDA for cosmetics, which may involve additional documentation or certifications.
Shipper/Consignee Information
Shipping/consignee names and addresses are required to successfully file an entry to clear your shipment.
Entry Summary
This document, known as the 7501, comes after the transaction and summarizes the entry details.
Entry Type 86: Extending the Reach of Section 321
Entry Type 86, or T86, is an enhancement to the Section 321 provision, allowing for the entry of shipments valued under $800 USD which may or may not be subject to Participating Government Agency (PGA) regulations. However, it is important to note, that if your goods are subject to PGAs, you will need to file these through a T86. This program leverages the Automated Commercial Environment (ACE) system to streamline the clearance process for goods requiring additional oversight.
The ACE Entry Type 86 Test
Purpose and Scope
Using the ACE system, the T86 program was developed to enable goods valued at under $800 USD and potentially subject to PGA requirements to qualify under Section 321. This “single window” approach ensures that all relevant government agencies can access the necessary shipment data.
Benefits of Entry Type 86
1.
Increased Compliance
- T86 integrates with ACE “single window” system.
- Ensures regulatory compliance with partner government agencies.
- Unified data submission improves data control and enables duty drawbacks.
2.
Cost Savings
- Importers save on duties, fees, and taxes.
- Fewer delays at the border because customs have more data to make better decisions.
- T86 exempts Section 321 shipments from harbor maintenance tax and merchandise processing fee.
3.
Faster Clearance
- T86 expedites the clearance of compliant Section 321 shipments.
- T86 participation has reduced customs holds by a remarkable 90%; more data for customs = better decision-making.
- Importers meet tight deadlines and fulfill customer orders more efficiently, enhancing customer satisfaction and business reputation.
Do you need an HTS number to import your low value product as an Entry Type 86?
Hover for answerAn HTS Number is required.
Yes, you will specifically need a 10-digit HTS (Harmonized Tariff Schedule) code.
See more FAQs here.
Practical Implications for Importers
Understanding the differences between Section 321 and Entry Type 86 is crucial for businesses involved in international trade. Each program offers unique advantages and caters to different types of shipments. Here are some practical implications for importers.
Choosing the Right Program
Assessing Shipment Value and Content
If the shipment’s value is $800 USD or less and it does not require PGA oversight, Section 321 is the ideal choice. For shipments that fall under PGA regulations, T86 provides a viable option.
Compliance Considerations
Importers must ensure they meet all data requirements for the chosen program. This includes providing accurate and complete information to avoid delays or penalties. If goods are subject to anti-dumping, countervailing duties, or quotas must pay all applicable duties, fees, and taxes and do not qualify for Section 321 shipment under Entry Type 86. If duties, fees, or taxes are owed on an Entry Type 86, it will be rejected by CBP and must be refiled through the appropriate informal or formal entry process.
Leveraging Technology
Utilizing the ACE system for T86 entries can streamline the import process and enhance compliance. Importers should work with experienced customs brokers familiar with electronic filing and the ACE system.
Preparing for the Import Process
Gathering Necessary Documentation
Ensure that all required data elements are collected and accurately documented before initiating the import process. This includes commodity descriptions, HTS codes, and identification numbers.
Working with Customs Brokers
Customs brokers can provide invaluable assistance in navigating the complexities of both Section 321 and T86. They can help with electronic filing, customs bond arrangements, and compliance with PGA requirements.
Staying Informed
Regulations and requirements for importing goods can change. Importers should stay informed about updates to Section 321 and T86 programs to ensure continued compliance and take advantage of any new benefits.
What is Section 321 in U.S. import regulations?
Section 321 allows for the duty-free importation of goods valued at $800 USD or less per shipment per person, per day, streamlining the clearance process for these types of shipments.
How does Entry Type 86 differ from Section 321?
Entry Type 86 extends the benefits of Section 321 to shipments that may require Partner Government Agency (PGA) oversight, utilizing the Automated Commercial Environment (ACE) system for enhanced compliance and by making an entry, gives the shipper/importer better visibility into their supply chain.
What data elements are required for Section 321 entries?
Importers must provide information such as the Importer of Record Number, Consignee Name and Address, Commodity Description, HTS Number, Value of the Goods, and PGA data if applicable.
Why would an importer choose Entry Type 86 over Section 321?
Importers would be required to use Entry Type 86 for shipments that require PGA oversight, as T86 facilitates the entry of such goods using the ACE system, ensuring all necessary data is accessible to relevant agencies.
What is the ACE system in the context of T86?
The Automated Commercial Environment (ACE) system serves as the official record system for U.S. Customs and Border Protection (CBP). Through ACE, the trade community can electronically transmit import and export transactions. This system offers a “single window” approach, making all pertinent data accessible to various government agencies. By centralizing information, ACE streamlines the import process and improves compliance.
Do both Section 321 and T86 require customs bonds?
Customs bonds are not required for neither T86 or Section 321 entries. It is important to note that goods subject to anti-dumping or countervailing duties, will be ineligible for either entry type.
What are the exceptions to Entry Type 86?
(Hover for answer)Mail and goods subject to AD/CV duties or quotas.
T86 does not apply to shipments imported via mail and may not be entered under Entry Type 86. Additionally, any goods subject to anti-dumping, countervailing duties or quotas are not exempt from paying applicable duties, fees, or taxes imposed by other agencies and do not qualify for entry as a Section 321 shipment under Entry Type 86. If an entry filed under Entry Type 86 is determined to owe any duties, fees, or taxes, it will be rejected by CBP and must be refiled using the appropriate informal or formal entry process.
See more FAQs here.
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