E-Commerce:
Section 321 & Entry Type 86
Andrew Park, Customs Broker Licensed by CBP LA총영사관 공익관세사
E-Commerce
E-Commerce is a business model that lets firms and individuals buy and sell things over the
internet.
CBP defines E-Commerce as high-volume, low-
value shipments entering the port limits of the
United States.
Dropshipping vs.
Fulfillment Center (Amazon or 3PL)
Fulfillment Center vs. Dropshipping Product Flow
Bulk order from supplier
Bulk orders shipped via ocean container
Formal Entry Ground transport
to domestic distribution
center
Final deliver to consumer
Individual order from supplier
Individual orders under $800 sent
via airfreight
Duty Free Entry Type 86 clearance
Final delivery to purchaser via
any carriers
Low-value shipment
Not higher than $800
The Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA)
• Signed into law on February 24, 2016
• De minimis value has increased from $200 to $800
• To streamline and facilitate the movement of trade
Section 321
Statutory authority / 19 U.S.C. 1321 – Administrative exemptions
• Admit articles free of duty and of any tax imposed on or by reason of importation, but the aggregate fair retail value in the country of shipment of articles imported by one person on one day and exempted from the payment of duty shall not
exceed $800
Regulatory authority / 19 CFR 10.151 – Importations not over $800
• Low-value shipments can be imported by one person on one day having a fair retail value, as evidenced by an oral declaration or the bill of lading (or other
document filed as the entry) or manifest listing each bill of lading, in the country of shipment not exceeding $800
Entry Types
Shipments are broadly categorized by following main entry types:
• Low-value Entry (Section 321 release from manifest, or ACE Entry Type 86)
• Under $800 (not mandatory)
• Informal Entry
• Under $2,500 (not mandatory)
• Formal Entry
• Over $2,500 (mandatory)
19 CFR § 143.22 - Formal entry may be required.
• CBP may require a formal consumption or appraisement entry for any merchandise if deemed necessary for import admissibility enforcement purposes; revenue protection; or the efficient conduct of customs business.
Characteristics of
Section 321 Entry vs. Entry Type 86
Section 321 Entry Entry Type 86
Filing method Manual Filing at the Port of Entry.
“Release from Manifest” Process - released from CBP custody based on the information provided on the manifest or bill of lading.
Electronically automated via ACE Cargo Release Transmission
Allows Partner Government Agency (PGA) merchandise?
No Yes
Customs Duties/Fees/Taxes owed? No No
ADD/CVD, Quota, Tobacco/Alcohol with IRS Tax, Ag Fees allowed?
No No
Maximum Value per Day, per Consignee?
$800 $800
One Entry Number per Bill of Lading?
There is no Entry Number when released from Manifest
Yes
Data Elements in
Section 321 Entry vs. Entry Type 86
Section 321 Entry Entry Type 86
1 Country of Origin Country of Origin
2 Shipper Name, Address and Country Shipper Name, Address and Country 3 Ultimate Consignee Name and Address Ultimate Consignee Name and Address
4 Quantity Quantity
5 Fair Retail Value in the Country of Shipment Fair Retail Value in the Country of Shipment
6 Merchandise Description 10 digit HTSUS Number
7 Shipping Weight Entry Number
8 Bill of Lading or Air Waybill Number
9 Planned Port of Entry
10 IOR of the Owner, Purchaser or Customs Broker
(conditional)
11 PGA Data Set (conditional)
Section 321 Restrictions
Section 321 Entry
• Goods needing inspection as a condition of release, regardless of value
• Merchandise subject to Anti-Dumping Duty (ADD) and/or Countervailing Duty (CVD)
• Goods subject to quota
• Products regulated by the following Participating Government Agencies (PGAs):
- Food and Drug Administration (FDA) - Food Safety Inspection Service (FSIS) - National Highway Transport and Safety
Administration (NHTSA)
- Consumer Product Safety Commission (CPSA) - U.S. Department of Agriculture (USDA)
- Animal & Plant Health Inspection Service (APHIS)
Entry Type 86
• Goods needing inspection as a condition of release, regardless of value
• Merchandise subject to Anti-Dumping Duty (ADD) and/or Countervailing Duty (CVD)
• Goods subject to quota
• Any commodities that require fee collection
Top 10 Most Asked Questions about
Section 321 & Entry Type 86
Q1: Who Can File Entry?
Section 321 Entry
• Released from CBP custody based on the information
provided on the manifest or bill of lading. Such information may be provided by express
consignment operators, carriers, or customs brokers.
Entry Type 86
• An owner, the purchaser or a broker. The customs broker can be designated by the owner, purchaser, or consignee.
Q2: Is a Power of Attorney Required for Brokers to file?
Section 321 Entry
• Yes - Customs brokers filing this entry must be authorized to
conduct customs business on behalf of another through a valid power of attorney, and must comply with all other statutory and regulatory requirements applicable to brokers
Entry Type 86
• Yes - Customs brokers filing Entry Type 86 must be authorized to conduct customs business on
behalf of another through a valid power of attorney, and must
comply with all other statutory and regulatory requirements applicable to brokers
Q3: Is ISF filing required?
Section 321 Entry
• Yes – if mode of transportation is ocean.
Entry Type 86
• Yes - if mode of transportation is ocean.
Q4: Will there be a bond requirement for?
Section 321 Entry
• There is no bond requirement for Section 321 Entry.
Entry Type 86
• There is no bond requirement for Entry Type 86.
Q5: Can Entry Type 86 be filed at any commercial port of entry?
• Yes, remote location filing is permitted with National permit.
Q6: How will one shipment, per person, per day, not to exceed $800, be validated?
• It is the responsibility of the filer to comply with this statutory limitation under 19 USC 1321.
Q7: Can a shipment be broken up to take
advantage of the $800 duty free treatment?
• No. Pursuant to 19 C.F.R. § 10.151, if a port director has reason to believe that a “shipment is one of several lots covered by a single order or contract and that it was sent separately for the express purpose of securing free entry,” he must not accord duty free treatment to the shipment.
Q8: Can multiple shipments be consolidated into one entry Type 86?
• No, multiple shipments cannot be consolidated into one entry Type 86. Only a simple one master house or bill can be provided on an entry Type 86.
Q9: Are there any goods not permitted with Entry Type 86?
• Yes –
• Goods subject to
• AD/CVD
• Quota
• Taxed under the Internal Revenue Code
• TTB regulation, such as tobacco and alcohol products
• etc…
Q10: Will an entry subject to Section 301 duties be allowed for entry Type 86?
• Yes, an entry that is subject to 301 that meets de
minimis requirements may currently be filed as a Type 86.
Best Practices
• Check one shipment imported by one person on one day;
• Check aggregate fair retail value shall not exceed $800;
• Check the Section 321 restricted items;
• Use one customs broker for consistency;
• Build strong communication system among carriers, freight forwarders and customs brokers.
Thank You!
Contact Information
Andrew Park
Customs Broker Licensed by CBP LA총영사관 공익관세사
andrewpark@binexline.com
