U.S. Customs and Border Protection (CBP) selected nine companies for its Section 321 Data Pilot program meant to measure the impact of low-volume e-commerce customs enforcement.
“The Section 321 Data Pilot is a significant step toward executing CBP’s overall e-commerce strategy,” CBP acting commissioner Mark Morgan said. “CBP has worked closely with the trade community to identify appropriate information that will advance the trade enforcement mission of CBP, and our partner government agencies, while preserving the facilitation of low-value shipments which American consumers rely upon.”
The pilot’s participants comprise a wide range of e-commerce supply chain actors, including Amazon, eBay, Zulily, FedEx, DHL and UPS, as well as technology firm PreClear and logistics providers XB Fulfillment and BoxC Logistics. Although the Section 321 Data Pilot is currently limited to nine participants, CBP plans to expand access to all interested and qualified participants in early 2020.
The Section 321 Data Pilot is a voluntary collaboration with online marketplaces, carriers, technology firms and logistics providers to secure e-commerce supply chains and protect American consumers. In December, CBP expanded the scope of the pilot by accepting data for shipments arriving by ocean and international mail, and extended the pilot through August 2021.
CBP said the pilot will allow it to test whether the transmission of additional advance data, beyond the data elements currently required for shipments arriving by air, ocean, truck, or rail, will facilitate more effective and efficient targeted screening with respect to Section 321 shipments.
Section 321 of the Tariff Act of 1930, as amended, authorizes CBP to provide an administrative exemption to admit free of duty and tax shipments of merchandise imported by one person on one day that have an aggregate fair retail value in the country of shipment of not more than $800. Bona-fide gifts and certain personal and household goods are subject to different requirements in order to qualify for separate administrative exemptions.
Prior to the enactment of the Trade Facilitation and Trade Enforcement Act (TFTEA), the Section 321 exemption applied only to shipments valued at less than $200. Section 901 of TFTEA raised the de minimis value cap from $200 to $800. This has greatly increased the number of shipments qualifying for the Section 321 exemption.
“Combined with the exponential growth of the online shopping market in the United States over the past five years, CBP has seen a significant increase in small, low-value packages,” BCP said. “In fact, today CBP processes more than 600 million express consignment and international mail shipments a year–approximately 1.8 million a day.
“The unprecedented growth in volume of these low-value shipments requires creative solutions to interdict illicit and dangerous products to enter the United States,” CBP added, “including illicit narcotics, unregulated prescription drugs, brand counterfeits, and unsafe food and beauty products.”
The nine participants must transmit certain required data elements to CBP for the Section 321 Data Pilot. CBP has also given participants the flexibility to transmit optional data elements as they are able to test the viability of sharing additional information. This information will help CBP ascertain data that are key indicators of compliance with U.S. trade laws and consumer safety. With these additional details, CBP will be able to focus more resources on high-risk shipments while expediting the clearance of legitimate shipments.