What Is the Section 321 De Minimis Exemption?
Learn how the Section 321 de minimis provision facilitates duty-free entry for low-value U.S. imports and the specific compliance requirements involved.
The Section 321 de minimis exemption is a provision within United States customs law that facilitates the import of low-value goods. Found in Section 321 of the Tariff Act of 1930, this rule allows certain shipments to enter the country without being subject to the usual duties and import taxes. This mechanism is impactful for the e-commerce sector, as it streamlines the process for smaller, individual orders shipped directly to consumers. This exemption is designed to expedite the flow of goods, recognizing that the cost of collecting duties on very low-value items can often exceed the amount of revenue collected, allowing for quicker delivery times and lower final prices for consumers.
Core Eligibility Requirements
A shipment must meet two primary conditions to qualify for the Section 321 de minimis exemption. The first requirement relates to the shipment’s value. The aggregate fair retail value of the articles in the shipment, determined in the country of origin, cannot exceed $800. This value is not what the consumer paid, but the price the goods would sell for in a retail environment in the country from which they were shipped.
The second rule is the ‘one person, one day’ limitation. This rule allows a single person or entity to import multiple shipments in one day, provided the total aggregate fair market value of all shipments combined does not exceed $800. If the total value of all shipments to that person on a single day exceeds $800, none of the shipments from that day qualify. It is not permissible to intentionally split a single order into multiple smaller shipments to stay under the value limit.
Goods Ineligible for the Exemption
Certain categories of goods are barred from using the de minimis exemption, irrespective of their value. While many goods regulated by Partner Government Agencies (PGAs), such as the Food and Drug Administration (FDA) or the Department of Agriculture (USDA), are ineligible for a standard de minimis release, they may still qualify for duty-free entry under Section 321. This is possible if they are filed using Entry Type 86, a formal process that allows for the submission of required PGA data.
Furthermore, the exemption does not apply to goods that are subject to antidumping and countervailing duties (AD/CVD). Products like alcoholic beverages and tobacco are excluded from the de minimis provision due to the specific excise taxes and regulations governing their importation. Additionally, goods originating from China and Hong Kong are ineligible.
Information Required for Entry
Before a de minimis shipment can be cleared, specific information must be gathered for submission to U.S. Customs and Border Protection (CBP). These low-value shipments are most commonly cleared using a specific customs entry known as Entry Type 86. To complete this entry, the importer or their customs broker needs a comprehensive set of data points.
The required information includes the bill of lading or air waybill number, the unique entry number, the shipper’s name and address, and the consignee’s name and address. The country of origin for the goods is a mandatory data element, as is a detailed description of the merchandise and the quantity of items in the shipment. This information is typically found on the commercial invoice.
The Entry Filing Process
Once all necessary information has been compiled, the filing process for a de minimis shipment begins. The Entry Type 86 is submitted electronically to CBP through the Automated Commercial Environment (ACE). Most importers utilize the services of a licensed customs broker to manage this submission, as brokers have the expertise and software necessary to interact with the ACE system correctly.
The broker transmits the collected data to CBP, and the system automatically vets the information for compliance with de minimis rules. If the entry is accepted, CBP issues an electronic release notification. This release authorizes the carrier to move the goods from the port of arrival and deliver them to the final consignee, completing the clearance process.