One import program that has become very relevant in the last few years, especially for the Apparel Manufacturing industry is De Minimis Value Entry or Section 321.
US apparel importers with nearshore operations focused on “made to order” garments that are sold directly to the end customer (B2C) can enjoy the benefit of Section 321 and take advantage of its duty-free import benefits.
A ‘de minimis’ shipment, allows for goods valued at $800 USD or less to enter duty-free into the U.S. Under this rule they are also permitted to enter without formal entry, this is a great option for importers to save money and time.
As an example, a company manufacturing sports uniforms in the Dominican Republic can ship from a foreign location a baseball uniform consigned to its customer in the US via courier and this product will enjoy a duty-free status as long as the value is $800 or less.
This law came into effect in February 2016; before that the value of the goods imported was $200 or less. But value is not the only limit for these importations, there are also some other circumstances that may affect the qualification. Let’s look at them:
Section 321 Restrictions
- Goods needing a customs inspection as a condition of release, regardless of value
- Goods subject to Anti-Dumping Duty (ADD) and/or Countervailing Duty (CVD)
- Products that are regulated by the following Government Agencies:
1) Food and Drug Administration (FDA) with some exceptions as listed below:
As of July 2017, the FDA has provided exemptions for this restriction for the following goods: Cosmetics, Dinnerware, Radiation-emitting non-medical devices, biological samples for laboratory testing, Food (excluding ackees, puffer fish, raw clams, raw oysters, raw mussels, and foods packed in airtight containers stored at room temperature)
2) Food Safety Inspection Service (FSIS)
3) National Highway Transport and Safety Administration (NHTSA)
4) Consumer Product Safety Commission (CPSA)
5) U.S. Department of Agriculture (USDA)
6) Quota-Class merchandise
Section 321 Daily Transaction Restriction
One very important aspect is the daily transaction restriction. When the de minimis value threshold was raised from $200 to $800 the authorities saw a potential abuse of the system and immediately limited the duty-free release of such shipments to one per day for every qualified company, individual, or importer.
A seasoned Customs broker such Promptus will guide you in claiming Section 321 correctly and avoiding penalties.
Promptus is a global logistics company that offers freight forwarding services to companies all over the world as well as a licensed Customs Broker. If you have questions about Section 321 our Brokers are here to assist you. Contact us today at 1-877-776-6799.