Section 321: Understanding the Latest Changes to De Minimis Shipments

Introduction

In the ever-evolving world of international trade and logistics, staying informed about regulatory changes is crucial for businesses and individuals involved in cross-border commerce. One recent development that has caught the attention of importers and logistics professionals is the potential overhaul of the de minimis exemption, particularly concerning Section 321 entries. This blog post aims to shed light on these changes, their implications, and how FreightAmigo's digital logistics solutions can help navigate this new landscape.

On September 13, 2024, the Biden Administration issued an executive action that could significantly alter the landscape of low-value goods entering the United States duty-free under the $800 de minimis threshold. This action has the potential to impact a wide range of U.S. businesses that rely on the current exemptions, especially as we approach the busy holiday season.

Understanding De Minimis and Section 321

Before delving into the changes, let's clarify some key terms:

• De Minimis: A provision in the Tariff Act that allows low-value shipments to enter the U.S. without being subject to duties and fees associated with importation.
• Section 321: Refers to Section 321 of the Tariff Act of 1930, which outlines the de minimis exemption.
• Section 321 Entry: A type of customs entry for shipments valued at $800 or less.
• Section 321 Customs Clearance: The process of clearing goods through customs under the Section 321 provision.
• Section 321 Entry Type 86: A specific entry type used for de minimis shipments.

What's Changing?

The executive action aims to deny de minimis treatment to goods subject to:

• Section 301 duties (affecting approximately 85% of products from China)
• Section 201 duties (impacting products like clothes-washing machines and solar panels)
• Section 232 duties (affecting steel and aluminum industrial products)

This change could mean that these shipments would now face standard reporting, bond, and document requirements, just like any traditional freight entry.

Key Changes to Watch

1. Increased Entry Data Requirements

Businesses may need to provide more detailed information about:

• Who goods are being shipped to (per the "one importer per day" rule)
• Supply chain participants (e.g., manufacturer, seller, consignee)
• Specific cargo descriptions (e.g., "100% cotton men's T-shirt" instead of just "T-shirt")

2. Consumer Product Safety Commission (CPSC) Enforcement

Importers, including those using de minimis shipments, would be required to file CPSC testing certificates or General Certificates of Conformity (GCCs) at the time of entry.

3. 10-Digit HTS Reporting for Manifest Clearances

All de minimis entries would require 10-digit Harmonized Tariff Schedule (HTS) reporting, which may necessitate the use of licensed customs brokers for some businesses.

4. Increased Enforcement of the Uyghur Forced Labor Prevention Act (UFLPA)

Customs and Border Protection (CBP) will likely increase enforcement through more audits, operations, and foreign verifications.

What's Not Changing?

Some aspects of the de minimis process will remain unchanged:

• The person for whom de minimis is being claimed still needs to be identified.
• Type 86 (T86) entries will continue to require classification at a 10-digit level.
• Goods subject to Anti-Dumping/Countervailing duties from any country cannot receive de minimis treatment.

Potential Impact on Businesses

If implemented, these changes could have significant implications for businesses, especially those relying heavily on de minimis shipments from China or other affected countries. Some potential impacts include:

• Increased duty costs
• More complex documentation requirements
• Longer processing times for shipments
• Need for more detailed product information and classification

How FreightAmigo Can Help

As these regulatory changes loom on the horizon, businesses need a reliable partner to help navigate the complexities of international shipping. FreightAmigo, as a full-service digital supply chain finance platform, is well-positioned to assist clients in adapting to these new requirements:

1. Comprehensive Shipping Solutions

Our platform offers door-to-door freight quotes for various shipping methods, including international courier, airfreight, sea freight, rail freight, and trucking solutions. This comprehensive approach allows businesses to find the most cost-effective and compliant shipping options in light of the new regulations.

2. Real-Time Shipment Tracking

With connections to over 1000 reputable airlines and shipping lines, FreightAmigo provides real-time tracking of shipment status. This feature becomes even more crucial as businesses may need to closely monitor their shipments to ensure compliance with new documentation and reporting requirements.

3. Customs Clearance Assistance

Our platform offers customs clearance services, which will be invaluable as businesses navigate the new landscape of de minimis shipments and increased scrutiny on certain imports.

4. Automated Document Management

FreightAmigo's ability to automate shipment documents can help businesses meet the increased data and documentation requirements expected under the new regulations.

5. Expert Support

With 24/7 access to logistics experts, FreightAmigo can provide guidance and support to businesses as they adapt to the changing regulatory environment.

Preparing for the Changes

While the exact implementation timeline for these changes is not yet clear, businesses can take steps to prepare:

1. Start classifying products with 10-digit HTS codes if not already doing so.
2. Review supply chains and identify shipments that may be affected by the new regulations.
3. Consider alternative shipping methods or sourcing strategies for affected products.
4. Engage with customs brokers or logistics experts to understand the full implications for your business.
5. Stay informed about the progress of the Notice of Proposed Rulemaking and any updates to the implementation timeline.

Conclusion

The proposed changes to de minimis shipments and Section 321 entries represent a significant shift in U.S. import regulations. While these changes may pose challenges, they also present an opportunity for businesses to reassess and optimize their supply chains. By leveraging digital logistics platforms like FreightAmigo, companies can stay ahead of regulatory changes and ensure smooth, compliant operations in the evolving landscape of international trade.

As we continue to monitor these developments, FreightAmigo remains committed to providing our clients with the tools, information, and support needed to navigate these changes successfully. Our digital platform is designed to adapt quickly to regulatory shifts, ensuring that our clients can focus on growing their businesses while we handle the complexities of international logistics.

Stay tuned for more updates on this important topic, and don't hesitate to reach out to our team of experts for personalized guidance on how these changes may affect your specific shipping needs.