Home Business How to Claim Section 321 Duty-Free Entry for eCommerce Fulfillment Partners
Business - June 25, 2023

How to Claim Section 321 Duty-Free Entry for eCommerce Fulfillment Partners

Section 321 entry

Section 321 allows eCommerce fulfillment partners to reduce importing expenses and international shipping costs with this rule; however, there are some restrictions in place, including a one-shipment-per-day limit. This article will introduce the basic elements and methods behind Section 321 entry, as well as discuss its usage to minimize taxes and duties in order to provide customers with competitive prices.

What is Section 321?

Section 321 of US customs laws provides eCommerce businesses with an enormous benefit if their shipments valued under $800 enter duty-free into the country, making expansion into new markets or simply saving shipping costs more cost-effective.

Unfortunately, this has created a loophole for counterfeiters to ship merchandise into the U.S. through lower-value shipments that don’t receive as close scrutiny from Customs officials as larger commercial shipments. To combat this threat, CBP instituted a pilot data program in 2017 requiring online marketplaces to send information regarding both parties involved with shipping goods into the US as well as domestic de-consolidator and final recipient so Customs officials can more quickly target and assess these shipments upon their arrival.

Only those participating in the Section 321 Data Pilot can claim Section 321 on their shipments; however, other companies can still leverage this tool to reduce fulfillment costs by teaming with a logistics provider that handles documents, manifesting, and clearance services on their behalf.

How does Section 321 work?

Due to rising tariffs, Section 321 allows businesses to save money when it comes to import costs. The program allows shipments with de minimis values up to $800 USD into the United States without paying duties and taxes typically associated with such imports; however, businesses must follow all CBP regulations when claiming this status; failure may incur extra fees and delays that negate its advantages.

Additionally, for this benefit to apply, shipments must meet certain criteria, including having a fair retail value under $800 and being sent from one shipper directly to one recipient on the same day. When properly coordinated with all parties involved and communication established between shipper and recipient is achieved between shippers and recipients alike, utilizing Section 321 could save thousands in savings as well as hours.

What are the benefits of Section 321?

Successfully claiming Section 321 on your shipment can remove many fees and paperwork associated with international fulfillment processes while helping your business save on shipping costs, which you can pass along to customers. Unfortunately, however, it’s not automatic; certain restrictions must be followed in order to claim Section 321. These restrictions include daily limits per company per day claiming this policy and serious penalties applied if more shipments than allowable are attempted at claiming.

If you are based in Canada and looking to expand into the United States – which boasts 10x larger markets than Canada – Section 321 provides an effective means of expansion. By qualifying for and adhering to its rules, merchandise shipped from your warehouse or fulfillment center is to be stored duty free before being reshipped back out duty-free; thus lowering shipping costs while making shoppers even more likely to click that “add to cart” button.

Who can claim Section 321?

Customs brokers can assist in determining whether or not your business qualifies to claim Section 321 and guide you through the process. This option can be particularly advantageous to companies operating multiple domestic warehouses or fulfillment centers that wish to avoid paying high duty taxes on their goods.

Recently, the threshold value for Section 321 was raised from $200 to $800 – meaning more products can now be imported without incurring duties fees into the US – something that’s an advantage for brands relying heavily on international eCommerce.

To qualify, shipments must be valued under $800 and their product value clearly listed on all invoices. Only one 321 shipments can be declared per day; to make this easier for beginners importing goods, working with an experienced customs consultant would be ideal. Failure can result in heavy penalties; in addition to financial savings, using Section 321 has several other benefits such as less paperwork and quicker processing times which help reduce delays caused by customs inspection.

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