What is the Section 321 Data Pilot?
Section 321 Data Pilot refers to a voluntary study by the U.S. Customs and Border Protection (CBP). The pilot study began on August 22, 2019 and is expected to run for a year. During the test period participants will electronically transmit cargo information about their e-commerce shipments to CBP before the shipments arrive in the US.
The pilot applies to all Section 321 shipments arriving into the United States by rail, truck or air. It will be operational in all ports of entry that participants may use for the clearance of their Section 321 shipments.
Participants in the voluntary pilot will be required to transmit their data through point to point connections with CBP. In case they do not have such prior connections or prefer not to use such connections, they can go through a broker carrier or service provider with a point-to-point connection, who will then transmit the requested data on their behalf.
Section 321 Shipments
The amended Section 321 of the Tariff Act of 1930 gives the US Customs and Border Protection Agency the authority to offer an administrative exemption to certain merchants or class of goods. The CBP may exempt household goods, gifts, and certain personal items from tax or duty if imported on one day by one person if their aggregate retail value in the country of origin is $800 or less.
The exemption applies unless the port director has reason to believe the consignment is a consolidation of several lots covered by a single contract or order and was imported separately to take advantage of the section 321 exemptions or any other regulations or laws.
Section 321 Shipments have become particularly relevant in recent times as they have reached a high of 1.8 million consignments arriving in the US by truck or air every day.
Purpose of the Section 321 Data Pilot
With Section 321 shipments exploding, it has become difficult for the CBP to enforce its regulations while maintaining the clearance speeds that importers have come to expect as standard. It is difficult to receive advance information efficiently and effectively when there are more than 1.8 million consignments arriving every day.
While the CBP has been receiving and processing most of the electronic cargo and conveyance information from truck, air and rail carriers, the rise of e-commerce has complicated matters even further.
With the rise of e-commerce, traditionally regulated parties such as carriers that the CBP used to depend on to get information on the consignment’s supply chain are no longer as useful. Most of the carriers’ transmitted data will not have important information such as the contents of the package, the final recipient or the identity of the entity on whose behalf the consignment is crossing the border.
The CBP expects E-Commerce shipments to continue to grow and hence it is critical to conduct the Section 321 Data Pilot to collect data on the viability of attaining advance information from e-commerce actors, whether regulated or non-regulated.
E-commerce marketplaces provide a lot of information that the CBP would find handy in the processing of Section 321 shipments. Such information may include the ultimate recipient, pictures of the consignment, detailed description and the person or entity sending the shipment to the United States.
Online marketplaces may develop seller programs or provide unique identifiers to sellers. The test will make it possible for the CBP to determine the capacity of e-commerce and other online market places to submit critical Section 321 advance information. The CBP can then use such resources to inspect and process the shipments so that they can understand how online marketplaces work.
CBP is looking for stakeholders that participate in online marketplaces and the e-commerce environment such as freight forwarders, carriers, and customs brokers. While volunteers need to have the information technology infrastructure, there is no restriction on commodity sold, location or size of the e-commerce stakeholder.
The following are some of the requirements for Participation:
- Technical Capacity – prospective participants need to have the technical capacity for electronic transmission and receipt of messages to and from the CBP through a point to point connection. They could also authorize a broker, carrier or service provider who has volunteered for the pilot that has the point to point connection that can transmit and receive information from the CBP on their behalf.
- Sign an Interconnect Security Agreement – Volunteers who set up the point to point connection will have to either amend or sign the Interconnect Security Agreement and agree to comply with security policies set by the CBP.
NOTE: Volunteers that are interested should contact the CBP through email on [email protected]. The email needs to state their eligibility based on the requirements above. For online marketplaces, information needs to include information on logistics of the delivery of the products they sell.
Volunteers in the Section 321 Data Pilot are required to submit a specific set of information and data. The information that the CBP will need to be transmitted will depend on the organization that is transmitting the data.
Typically the data that will have to be transmitted will be related to the entity that initiates the consignment (such as the shipper, manufacturer, or seller who are responsible for causing the shipping of the cargo across the US border), the listed marketplace price, the product in the package, and the last recipient (such as the final entity that takes possession of the consignment once it arrives in the US).
Irrespective of entity type, all participants will have to send the following data to the CBP electronically:
- CBP assigned Originator Code of the stakeholder taking part in the pilot
- Mode of transport such as rail, truck or air
- Stakeholder Filer Type (such as online marketplace, carrier or freight forwarder)
- One or more of:
- Master Bill Number
- House Bill Number
- Shipment Tracking Number
Along with the required data for all participants, the carriers that volunteer for the pilot will need to convey the following:
- Consignment Originator Name and Address – This is the entity responsible for the movement of a consignment across borders that may include a manufacturer, seller or shipper but excludes the foreign consolidator.
- Known Customer Carrier Flag – This is a tag that identifies the shipper as a repeat client that is known not to violate any regulations and pays their fees and duties as required.
- Ultimate Deliver to Entity Name and Address – The last individual or organization that is supposed to take possession of the consignment in the US that may be either a warehouse or final purchaser except for a domestic deconsolidator.
- Consignment Security Scan – Applies to air carriers and may include a report that shows proof or verification that the shipment has undergone a foreign security scan that may include x-rays or any other supplementary security screening procedures.
- Enhanced Product Description – Includes a detailed description of the product that should reflect the details of the product as listed on the e-commerce store or online marketplace.
Participating Online Marketplaces
Besides the general requirements, online marketplaces will also need to convey the following:
- Seller Name and Address – Domestic and international companies that sell their products on their websites or other online marketplaces will need to provide their names and address and if applicable the name and address of the consignment initiator.
- Listed Price on the Market place – The listing price of the product on the online marketplace and in the instance of an auction marketplace the final sales price.
- Ultimate Deliver to Entity Name and Address
- Product Picture – Link to the product listing that includes the product picture or its enhanced description.
- Identified Marketplace Merchant Flag – The identification tag that the marketplace uses to identify vetted sellers with no compliance issues.
- Customer Name and Address – The person or entity that made the purchase from the online marketplace if applicable.
- Marketplace Seller ID or Account Number – A unique identification tag that the marketplace assigns to its merchants selling on the platform.
Participation in the CBP Section 321 Pilot can bring many benefits to early adoptors including having a voice at the table and providing further inputs as the final requirements are drafted by CBP. Using the test data, CBP may be able to expedite clearances of Section 321 shipments. At the end of the pilot period, Customs and Border Protection will analyze the data and determine if more information or more participants are needed. It will also use the data to determine if there is a need for more mandatory advance reporting of data from e-commerce stakeholders.