International Trade Today is providing readers with some of the top stories for Oct. 1-5 in case they were missed.
321 de minimis
De minimis is a policy described in Section 321, 19 USC 1321. It allows the import of articles duty and tax free, provided their aggregate fair retail value does not exceed $800 in the country from which the articles are imported. Additionally, the articles must be imported by only one person on one day. The previous de minimis threshold was $200, but the Trade Facilitation and Trade Enforcement Act increased it to $800.
Merchandise imported in bulk and then stored in a foreign-trade zone prior to sale is not eligible for the Section 321 exemptions when the goods are withdrawn upon consumer sales, CBP said in a Sept. 18 ruling. CBP's ruling, HQ H282601, was in response to a ruling request from Sandler Travis lawyer Robert DeCamp on behalf of the American Apparel and Footwear Association. CBP's analysis in this ruling is similar to another ruling on de minimis shipments and FTZs (see 1807180022). There are efforts underway to change the treatment of such goods, on Capitol Hill (see 1808150007) and in CBP's regulations through the Commercial Customs Operations Advisory Committee (see 1810040019).
CBP is "conducting integration testing to prove compatibility of a blockchain platform with multiple partner systems," according to an update from the emerging technologies working group ahead of the Oct. 3 Commercial Customs Operations Advisory Committee (COAC) meeting. CBP began an initial "proof of concept" in September as the agency considers the potential for the distributed ledger technology (see 1808200040). "Portions of the NAFTA / CAFTA import process, specifically verification of intellectual property and relationships between licensees and licensors, have been identified as good candidates for improvement if a transition to a more digitized, decentralized system is undertaken," it said.
ATLANTA -- An initiative to allow foreign-trade zones to take part in e-commerce distribution is in the early stages after CBP ruled that the role of FTZs is limited, said Jim Swanson, CBP director-cargo and conveyance security and controls, during a panel discussion at the CBP 2018 Trade Symposium on Aug. 14. "We have had discussions with key folks out there at both the Hill and from the various associations where there's a lot of discussion going on about what that really means and what the path forward is for potentially" allowing FTZs to "participate in this." CBP recently ruled that the Section 321 entry exemptions do not apply to bulk shipments sent to FTZs that are broken up for individual consumption entries below the $800 de minimis level prior to a consumer order (see 1807180022).
The Section 321 entry exemptions do not apply to bulk shipments sent to foreign-trade zones that are broken up for individual consumption entries below the $800 de minimis level prior to a consumer order, CBP said in May 8 ruling the agency released on July 17. Much of the decision hinges on the definition of "importation," as expected (see 1806050049). The ruling came in response to an internal advice request from Jim Swanson, CBP director-cargo and conveyance security and controls, it said. CBP recently said the new Section 301 tariffs won't apply to Section 321 entries (see 1807050033).
CBP will begin to apply a 25 percent Section 301 duty on goods found on a list of 818 8-digit tariff subheadings with country of origin China that are entered on or after 12:01 a.m. Eastern time July 6, said Alex Amdur, CBP director-antidumping and countervailing duty policy and programs, on a call held July 5 to answer questions from the trade community. Based on country of origin, not country of export, the tariffs will be applied based on the date of entry, and goods with an entry date prior to July 6 will not be subject, including in cases in which the filers “elect” such an entry date.
An eagerly awaited CBP ruling on how foreign-trade zones are treated under Section 321 entry exemptions is expected to conclude that withdrawals from FTZs don't meet the requirements for such exemptions, National Association of Foreign-Trade Zones President Erik Autor said in a June 5 interview. Among other issues, CBP was considering whether larger shipments can be brought into foreign-trade zones, then broken up into smaller shipments valued under the $800 de minimis so they can be entered exempt from taxes and fees under Section 321 (see 1802140015).
With CBP expected to allow for multiple options for filing Section 321 entries, some significant uncertainty remains for how the partner government agencies will treat goods imported at values under the $800 de minimis threshold, said Lenny Feldman, a lawyer with Sandler Travis. Still, there have been some indications for what to expect from the PGAs on the issue, he said. "Goods that the Alcohol and Tobacco Tax and Trade Bureau and the Bureau of Alcohol, Tobacco, Firearms and Explosives regulate would seem to be excluded from section 321 processing because the customs regulations already mention alcohol and tobacco as exceptions to de minimis processing," Feldman said in a May 20 email. Pharmaceuticals and medical devices regulated by the Food and Drug Administration also seem unlikely to receive Section 321 filing exemptions, he said.
RANCHO MIRAGE, Calif. -- CBP is considering offering trusted trader benefits to those in the e-commerce world as a way to improve compliance, said John Leonard, executive director-trade policy and programs at CBP, during a May 2 panel discussion at the National Customs Brokers & Forwarders Association of America's annual conference. The hope is to "incentivize all these new actors in this space to improve the platforms and marketplaces, etc., to be more compliant," he said. "Part of that could involve the Trusted Trader program" and the Customs-Trade Partnership Against Terrorism program, he said. CBP "is looking at this very closely."
The internal debate on the role of foreign-trade zones in e-commerce is ongoing within the government, said Brenda Smith, executive assistant commissioner-trade at CBP, while speaking at an American Apparel and Footwear Association event on April 25. "I recognize that, from a business perspective, people are very interested in reducing their duty costs," she said. "It presents an interesting policy question, really, for the Department of Commerce, about 'what are FTZs for, why do we want them?'" CBP is considering a ruling on whether larger shipments can be brought to FTZs and then broken up into smaller shipments valued under the $800 de minimis threshold (see 1804130042).