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CBP Seeks to Expand Test of Advance Data Requirements for E-Commerce Shipments

Monday, September 16, 2019
Sandler, Travis & Rosenberg Trade Report

U.S. Customs and Border Protection is planning to expand the number of participants in a recently-launched test under which additional data elements for Section 321 goods are transmitted in advance of their arrival.

CBP is conducting this voluntary test to determine the feasibility of requiring advance data from different types of parties and requiring additional data that is generally not required under current regulations in order to effectively identify and target high-risk shipments in the e-commerce environment. CBP sources state that the agency is accepting comments on expanding the number of participants in this test, which is currently limited to nine. This expansion could take place in spring 2020 and would open the test to any volunteer participants.

Section 321 of the Tariff Act of 1930 provides for an administrative exemption from duty and taxes for shipments of goods (other than bona-fide gifts and certain personal and household goods) imported by one person on one day having an aggregate fair retail value in the country of shipment of not more than $800.

CBP states that about 1.8 million shipments qualifying for the Section 321 exemption are currently arriving each day, primarily by air and truck, but that the agency is not receiving adequate advance information to assess the security risk of these shipments while still maintaining the clearance speeds the private sector has come to expect. This is particularly true in the e-commerce environment, where traditionally regulated entities such as carriers are increasingly unlikely to possess all the information on a shipment’s supply chain.

With the expectation that Section 321 shipments will continue to grow exponentially, CBP has initiated the Section 321 Data Pilot to test the feasibility of (a) obtaining advance information from regulated and non-regulated entities, such as online marketplaces, and (b) requiring additional advance data elements that identify the entity causing the shipment to cross the border, the product in the package, the listed marketplace price, and the final recipient (specific data elements will vary somewhat depending on the transmitting entity). CBP states that it will use this advance information to improve its ability to identify and target high-risk shipments, including for narcotics, counter-proliferation, and health and safety risks, but will not use it for entry or release purposes.

The pilot applies to each Section 321 shipment destined for the U.S. and arriving by air, truck, or rail for which the participant has information. It operates in all ports of entry utilized by the participants for Section 321 shipments, but it does not apply to any mail shipments covered by 19 CFR 145, shipments arriving by ocean, or shipments designated for a foreign-trade zone.

After the end of the pilot CBP will determine whether to (a) extend and/or expand the pilot or (b) make additional advance reporting requirements mandatory in the e-commerce environment.

CBP also plans to launch soon a test that would allow Section 321 shipments, including those subject to partner government agency data requirements, to be entered via new informal entry type 86 in the Automated Commercial Environment.

For more information on these tests or Section 321 requirements in general, please contact customs attorney Lenny Feldman at (305) 894-1011.

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