E-commerce has been changing the world over and with it the rules of business across the globe. Even the smallest businesses can now reach their customers with relative ease and speed anywhere on the planet.
In North America, both online startups and established organizations are acknowledging the vast revenue to be garnered from borderless e-commerce. As such, businesses are adapting their systems to deliver individual shipments to global clients.
In 2017, global e-commerce sales topped 2.3 trillion dollars which represented an increase of 25 percent year over year.
Because of these changes in e-commerce, the regulations and rules that calculate duty on low-value shipments have also been changing. CBP has a release option known as section 321 to process the release of low-value e-commerce shipments.
CBP De Minimis Increases from $200 to $800
In 2016, the US changed its regulations and in doing so increased the de minimis value threshold from $200 to $800. As such, most e-commerce shipments valued at $800 or lower will be allowed to be imported into the United States without paying any duty using release under the section 321 program. This means that more low-value consignments can now enter the US without being delayed by payment or formal entry requirements.
A higher de minimis threshold promotes global e-commerce and is a plus for the trade environments. It is also a good thing for US consumers as they can import low-value goods from international e-commerce entities duty-free. By increasing the threshold, it also causes many other jurisdictions to raise theirs too which has a ripple effect of making it possible to export law value goods to international clients at a more affordable cost.
Since it was implemented it has resulted in an explosion of e-commerce shipments for US companies and consumers that depend on low-value imports. According to CBP, there has been an increase of more than 50% in international package imports since the raising of the threshold.
Daily Transaction and Minimum Value Allowed
On February 24, 2016, the Obama administration raised the de minimis value of Section 321 shipments from $200 to $800. This had the effect of reducing the amount of paperwork for low-value shipments, made cross border trade cheaper, and facilitated faster processing of such shipments.
However, with the raising of the de minimis value, there is the potential for abuse of the system by unscrupulous sellers or buyers. As such, the law states that imports are limited to the duty-free release of such shipments to one per day for every qualified company, individual or importer.
While there has been confusion as to whether the minimum value is $200 or $800, CBP classifies any shipments valued at less than $800 to be a Section 321 entry. Since 2016, the $200 de minimis threshold is obsolete as all shipments with a value of less than $800 are covered by the new de minimis threshold.
The daily restriction is one shipment per company or individual per day as long as the shipment does not exceed $800 in value.
Importers are also not allowed to consolidate several Section 321 consignments into one consignment given that the total value will then be more than $800.
Customs City Global Solutions Inc. has several Section 321 solution offerings to help highway carriers, customs brokers, airlines, freight forwarders and warehouses comply with and process eCommerce shipments. Contact Us today to book an online consultation.