March 10, 2022
Understanding Section 321: A Guide for Ecommerce Brands
This blog post was originally published by Deliverr, which is now Flexport. The content has been adjusted to fit the Flexport brand voice and tone, but all other information remains unchanged. With the merging of Deliverr’s services (DTC fulfillment, B2B distribution, and Last Mile delivery) into Flexport’s existing international freight and technology services, we’re now able to provide merchants with true end-to-end logistics solutions spanning from the factory floor to the customer’s door.
__Updated November 2, 2023. __
Importing goods from overseas comes with a list of considerations and logistics under guidance from the U.S. Customs and Border Protection Agency. Adhering to these strict guidelines prevents your business from having to pay penalties when receiving goods from other countries. Section 321 provides an opportunity to avoid costly payments of tax and duty fees on qualifying shipments.
What Is Section 321?
As part of the Tariff Act, Section 321 is a statute that allows low-value shipments to enter the U.S. without having to pay the typical fees, tax, and duty associated with importation. This allows you to import stock at a lower cost. Sometimes referred to as “de minimis” shipment, this protocol allows for goods with a maximum value of $800 to enter the U.S. duty-free. This maximum value was previously set at $200. Qualifying imports can also sidestep the extensive paperwork that often accompanies a traditional shipment from overseas. Taking advantage of Section 321 can help your businesses save time and money.
It’s important to note that filing for Section 321 is not required. If your business sends multiple shipments per day, further logistics will be needed to ensure multiple claims are not made in a single day. If your business is looking for ways to increase profit margins, leveraging this cost-saving solution would be worthwhile for your bottom line. It’s important for all information to be accurate when filing for Section 321 to avoid the seizure of goods and costly penalties.
What Restrictions Are There Under Section 321?
Not all imports are eligible under Section 321. Under customs regulations, the import of alcohol, cigarettes, and cigars are ineligible. Items that are regulated by a government agency such as the FDA or USDA are also ineligible. Harsh chemicals and other items that require customs inspection are restricted along with goods that fall under the Countervailing or Anti-Dumping Duty. Regulations continue to change to expand to more companies with goods like food and cosmetics items becoming eligible. It’s important to stay updated on the latest allowances and guidelines to ensure compliance.
Along with restrictions placed on specific imported goods, there’s also a limit for daily transactions. Only $800 can be received each day per customer. The daily allotment is $800 or less to take advantage of the decreased import cost and reduced paperwork.
How Can My Business Claim Section 321 on Shipments?
In most instances, if the goods are valued at $800 or less, they can enter the U.S. duty-free without formal entry.
What Are the Benefits of Section 321?
Reduced Shipping Costs
Taking advantage of the provisions of Section 321 allows you to avoid costly fees typically associated with importing goods. This cost-saving shipping method can help your bottom line by subtracting taxes, fees, and duty expenses that are traditionally part of the equation when receiving goods from overseas. When it comes to importing goods from China, utilizing section 321 allows retailers to avoid the costly tariffs required through Section 301.
Section 321 allows shipments with a maximum value of $800 to arrive without formal entry, requiring far less paperwork. Some of the necessary information can be automated by fulfillment partners, speeding up the process to avoid delays. With the logistics streamlined for qualifying shipments, your items can be quickly cleared through customs.
The money that is saved from Section 321 can equate to a more competitive price passed down to customers. The goods are also available for purchase faster with their expedited clearance through customs. With this statute, your business can look into importing goods that may not have made sense fiscally before. Finding items from overseas that are now profitable to import can give your brand a competitive edge. This is especially true for goods from China, which before were heavily taxed, but can avoid such fees through Section 321.
The advantages of Section 321 can help save you time and money. International imports can be intimidating due to the strict regulations and the risk of penalties. Adhering to the shipment value of $800 or less can build your business by acquiring low-value items in a cost-effective way. This can increase your profit margin on items you already import, or open up new possibilities for items that can be offered through this savings opportunity.
Businesses large and small are using Section 321 to expedite their items through customs, resulting in fewer delays and huge savings. Avoiding tax and duty fees can allow your business to grow, opening up import opportunities that were not profitable in the past. With these savings, you can pass along competitive pricing to your customers. The benefits of claiming Section 321 are worth exploring as it can help streamline the importation process, allowing your time to be better spent running your business.
The contents of this blog are made available for informational purposes only and should not be relied upon for any legal, business, or financial decisions. We do not guarantee, represent, or warrant the accuracy or reliability of any of the contents of this blog because they are based on Flexport’s current beliefs, expectations, and assumptions, about which there can be no assurance due to various anticipated and unanticipated events that may occur. This blog has been prepared to the best of Flexport’s knowledge and research; however, the information presented in this blog herein may not reflect the most current regulatory or industry developments. Neither Flexport nor its advisors or affiliates shall be liable for any losses that arise in any way due to the reliance on the contents contained in this blog.