BY ANDREW M. DANAS
A SHORT PRIMER ON SECTION 321 DE MINIMIS IMPORTS What’s the big deal about small shipments?
W
ith an estimated over two million shipments per day, the legal treatment of de minimis imports, also known as Section 321 shipments, is the subject of ongoing discussions in both Washington and the general parcel shipping industry. Is the current $800 threshold too high? Is Section 321 being abused? If so, how should regulation of the shipments be changed? This article is a short primer on the basic rules and policy issues surrounding Section 321 shipments. In the law, de minimis means that a matter is so minor as to not require legal consideration. The US de minimis import rules are a statutory and regulatory exemption authorized by 19 USC §1321 (thus “Section 321”) that administratively exempts low value goods from the payment of taxes and duties and the formal importation entry process. The rationale for the exemption is that the cost of administering
the laws to small imports exceeds the benefits of taxing the goods and requiring formal entry. In effect since 1938, the de minimis rules have gained significant attention after Congress enacted the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA). TFTEA authorized increasing the dollar threshold of de minimis shipments from $200 to $800 in daily imports. Combined with the development of e-commerce direct to consumer shipments, CBP reports that the number of de minimis imports has risen 410% between 2015 and 2022. Under the exemption, goods valued at below $800 can enter the United States “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 an amount specified” by regulation. As low value informal entries, Section 321 shipments may be entered by the
10 PARCELindustry.com CROSS-BORDER & GLOBAL 2023
owner, purchaser, or consignee of the shipment, or an appropriately designated customs broker, by presenting to CBP the bill of lading or a manifest listing the origin country of shipment, plus information regarding the country of origin of the merchandise; the shipper name, address, and country; the ultimate consignee name and address; and the specific description, quantity, shipping weight, and value of the merchandise. Not all packages valued below $800 are entitled to de minimis treatment. Section 321 applies only if the aggregate value of shipments on a given day, from or to one party, can be valued at $800, based on the value at the country of shipment, not the ultimate US value. CBP has held that consolidated shipments of low value goods will not qualify for the exemption if they are not consigned to or have identifiable separate individual ultimate US consignees at the time of importation. Under CBP regulations, consolidated shipments addressed to one consignee shall be treated for purposes