Customs and Border Protection (CBP) has extended the term and is soliciting additional participants for the Section 321 Data Pilot, a “public-private partnership that mitigates risk and expedites legitimate low value e-commerce shipments.” The expansion of the pilot opens the door for widespread adoption of the known shipper scheme introduced in 2019.
Section 321 shipments enter under de minimis procedures which allow small packages valued at $800 or less to enter the United States tax and duty-free. CBP estimates that 85% of all shipments entering the United States meet this exemption, the highest in the world. China, the largest beneficiary of the waiver, enforces a de minimus of 50 yuan ($7.90).
According to Customs, the 321 Data pilot has resulted in faster and more accurate risk assessment and adjudication and fewer CBP holds. “CBP has processed more than 380 million shipments via the Section 321 Data Pilot since it was initiated in August 2019,” said Executive Director of CBP’s Trade Policy and Programs, Brandon Lord. “CBP is excited to expand the pilot, as bringing on board additional partners will allow the agency to test new technologies and the collection of non-traditional data elements to identify additional facilitation benefits for the trade community and CBP.”
The Section 321 Data Pilot was implemented on August 22, 2019, to test risk segmentation benefits of accepting advance data from e-commerce supply chain partners, including nine voluntary pilot participants from a wide range of e-commerce supply chain actors: Amazon, eBay, Zulily, FedEx, DHL and UPS, technology firm PreClear, and logistics providers XB Fulfillment and BoxC Logistics.
While importers can only take advantage of the Section 321 benefit on one single transaction per day, shipments direct to consumers permit entire retail ecosystems to flourish duty-free. CBP reports total imports under the exemption were $685 million in 2022, down 11% on the prior year, the only area of imports to witness a decline.
With Fulfilled by Amazon sales exceeding $100 billion last year, CBP’s figures may be inaccurate. These “agency” transactions are not “imports by Amazon,” and the program encourages participating merchants to ship in smaller lots, to conserve warehouse space and avoid customs clearance delays. CBP’s November report that the value of Section 321 imports fell by a third from 2020 to 2021 (contradicted on their website) has raised questions about the accuracy of CBP Import data.
New and existing pilot volunteers must transmit certain required data elements to CBP and will have the flexibility to transmit optional data elements as they are able to test the viability of sharing additional information. There is no limit to the number of volunteers CBP will accept for the expanded pilot, which will end in August 2025 unless further extended. To volunteer to participate in the pilot, or for more information about the pilot or e-commerce in general, contact email@example.com.
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