How to Claim Section 321 for Your Ecommerce Shipment

Now more than ever before, ecommerce businesses are prioritizing minimising logistics costs to maximise revenue. But keeping costs down while shipping products from overseas can be a huge challenge because of costly customs, import duties, and taxes.

Optimizing your ecommerce supply chain, saving on costs, and complying with the laws and regulations placed by the US Customs and Border Protection can seem like an impossible task. But that’s where Section 321 can help.

Section 321 allows low-value shipments to bypass taxes and duties, making it more affordable to ship products to the US. 

In this guide, we’ll dive into how Section 321 works and how you can use it to your advantage.

Note: This article is solely for informational purposes and does not constitute legal advice.

What is Section 321?

Section 321 is a US Customs and Border Protection (CBP) Shipment Type that allows goods to clear through US customs tax and duty-free. The section exempts low-value shipments from taxes and duties as long as the shipment complies with the de minimis threshold of $800 or less.

With Section 321, goods below the de minimis value can surpass duties and taxes at import into the US and simplify the customs process with less paperwork. Not only does Section 321 help businesses reduce international shipping costs, but it also speeds up the cross-border shipping process.  

For these reasons, Section 321 can give ecommerce businesses a competitive edge and reclaim revenue previously spent on taxes and duties.

3 things you should know about Section 321 for ecommerce

Part of the Tariff Act of 1930, Section 321 helps ecommerce businesses save on importing costs for shipping products to the US. While brands can bypass taxes and duties and their shipments receive clearance quicker with less paperwork, it’s a nuanced program with complex guidelines and regulations.

Here are some rules and conditions that apply to Section 321 that you should be aware of. 

1. US customs laws and regulations

There are various laws and regulations you should be familiar with when leveraging Section 321. For example, there is a duty exemption for goods produced at less than $800 in fair retail value in the country of shipment. Additionally, there is also a list of goods that are restricted by the administrative ruling, which includes:

• Products that require customs inspection (such as harsh chemicals or cleaning supplies).
• Goods that fall under the Countervailing or Anti-Dumping Duty.
• Products that are regulated by certain government agencies, including FSIS, USDA, NHTSA, CPSA, or the FDA.
• Cigarettes, cigars, and alcoholic beverages.

You also must provide proof of items’ retail value, and every shipment must have consignee names and addresses.

In recent years, the de minimis threshold was amended from $200 to $800 by the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA).

If your goods are higher than $800 USD, Section 321 may not be the best fit for you. Instead, consider Delivered Duties Paid (DDP) shipping to provide or in-country fulfilment.

2. Imports from China

The United States and China have been at odds when it comes to economic trade. “301 China” or “Section 301” are US-specific import duties placed on goods that have China as the country of origin.

This section has cost importers billions of dollars in taxes and has increased tariffs on a wide range products such as food and beverages, household items, sporting goods, and personal care items.

Fortunately, Section 321 overrides Section 301 as long as the items being shipped meet the de minimis value.

3. Limited to one shipment per day

By taking appropriate administrative and logistical measures, businesses can transport low-value shipments across the US border for minimal cost.

However, businesses must abide by the daily Section 321 restrictions. As part of this program, only one shipment per person (i.e., the brand or company) per day. To avoid serious penalties, make sure that your carrier or freight shipping partner does not make multiple Section 321 claims on the same day.

Section 321 can help benefit your ecommerce shop

If you want to store inventory with a third-party logistics (3PL) company with US-based fulfilment centres, Section 321 allows you to save significantly on importing expenses, which ultimately reduces international fulfilment costs. Here are some of the other benefits of Section 321. 

1. Overall lower costs

Section 321 provides ecommerce businesses with the opportunity to manufacture their products overseas and have them imported into the United States duty and tax-free. As mentioned earlier, if you manufacture low-value items in China, your shipment might qualify to be exempt from Section 301 tariffs. 

2. Faster shipments

Although you will need proof of value, Section 321 reduces the amount of paperwork required to import products and receive clearance for them across the border.

Using the electronic filling system, eManifest, allows for faster processing, significantly speeds up the shipping process, and eliminates delays caused by shipments held up at customs. This means that customers receive their orders more quickly.

3. Offers a competitive edge

Saving on international shipping costs can help you launch into the US more affordably and offer better shipping rates for US-based customers. For instance, if you bulk ship products to a 3PL’s fulfilment centre in the US, you can start shipping products to US customer domestically, which reduces shipping costs and last-mile delivery times. 

Section 321 FAQs

Section 321 is something that every global ecommerce business should be aware of. Here are some answers to some of the most common questions about Section 321.

What is a section 321 Shipment Type?

A Section 321 Shipment Type is a low-value shipment to the United States that includes items worth less than $800. The section allows the shipment to bypass tariffs and duties if it meets the de minimis value. 

How does Section 321 affect shipments to/from China?

The US-China trade war has significantly raised tariffs for both countries. Section 321 provides businesses with the opportunity to import products from China to the United States without having to pay a large sum in taxes and duties outlined (i.e., these shipments are exempt from Section 301). 

How does Section 321 work?

Section 321 helps ecommerce businesses save on importing costs for shipping low-value products to the US. Therefore, goods below this de minimis value can be imported into the US and surpass duties and taxes with less paperwork. Not only does Section 321 help businesses reduce international shipping costs, but it also speeds up the cross-border shipping process.  

What is Entry Type 86 and how does it differ from Section 321?

Entry Type 86 is the framework for customs entry used by US Custom and Border Protection (CBP) to streamline clearance into the US for low-value shipments. Section 321 is a program enacted by CBP that allows for goods to be imported into the US. For Section 321, shipments can be imported by one person on one day and must be valued at less than $800.

What is Section 321 Data Pilot?

The Section 321 Data Pilot is a program that allows US Custom and Border Protection to identify and target high-risk shipments that fall under the Section 321 criteria (packages valued at $800 or less that enter the US tax and duty-free) for inspection. This helps CBP to identify and deter illegal practices.