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CBP’s Section 321 Data Pilot Program to Begin August 22

posted by Jennifer Diaz August 21, 2019 0 comments

Tasked with the protection of the nation, The Department of Homeland Security (DHS) siphons the protection of our ports to United States Customs and Border Protection (CBP). With the continuous threats to safety and integrity of the country, CBP is conducting a voluntary test to collect certain advanced data related to shipments potentially eligible for release under section 321 of the Tariff Act of 1930.

In order to cope with the e-commerce trend, CBP will allow online marketplaces, and other non-traditional partners to participate in the pilot program. If you wish to participate in the program, DTL can assist you in submitting the required application to the Department Of Commerce. While the Pilot opens on August 22, 2019, and is set to last for roughly one year, CBP may accept potential participants after the program’s commencement until a sufficient number of participants has been identified.

Benefits of Section 321

download-5Section 321 allows CBP to declare certain shipments to be exempt from duties and taxes. To earn the exemption, the concerned shipment must be:

  • merchandise (other than bonafide gifts and certain personal and household goods) imported by a singular person on a single day having an aggregate fair retail value of $800 or less.

Prior to the implementation of the Trade Facilitation and Trade Enforcement Act (TFTEA), the same administrative exemption existed, however, it only applied to shipments whose value did not exceed $200. Due to the higher value threshold for exemption, along with the continuously growing e-commerce marketplace, the number of imported goods that could qualify for the exemption increased exponentially.

According to CBP, every day nearly 2 million shipments are released pursuant to Section 321, and the majority of these shipments arrive via air or ground transportation. Since the dramatic uptick in exempt shipments, CBP must receive vital information prior to shipments’ arrival, in order to maintain both the integrity of its enforcement measures, as well as the clearance speed expected by the private sector. Effectively, the 321-pilot program intends to accomplish both of these fundamental goals.

Section 321 Data Pilot Program

The pilot program will test the feasibility and quality of allowing shippers to electronically submit required data to CBP prior to the shipment’s arrival. CBP seeks to determine whether requiring advanced data from different types of parties and requiring extra information (that currently is not required) would be effective in identifying and targeting high-risk shipments.

download-4Due to the current e-commerce environment, government agencies must test and investigate the most efficient and secure means of verification, in order to keep pace with the evolving economic and technological landscape.

Currently, CBP requires shippers to submit certain vital pieces of information for cargo in advance of the shipment’s arrival or departure from the US, which is necessary to identify high-risk cargo, and subsequently ensure that the risky cargo legally meets the safety and security requirements. Despite the differences in data requirements, these specific requirements apply regardless of the mode of transportation. Generally, carriers must identify the shipper name and address, a description of the type of cargo, its weight, its quantity, the consignee’s name, and address, as well as the transit information such as flight number, carrier code, point of arrival, and especially, its point of origin.

While traditionally regulated parties used to possess the required information related to a shipment’s supply chain, the new e-commerce environment is challenging this fact daily. Frequently, the submitted data does not “adequately identify the entity causing the shipment to cross the border, the final recipient, or the contents of the package”. This is due to the novel and complex relationship between manufacturers, retailers, and consumers. The new relationship presented CBP with a quagmire: stringent enforcement requirements for an old system, currently hindering the profitability of an entirely new transactional relationship. Additionally, this has led to an increase in the time and resources required for proper inspections, thus presenting a need for technological advancement.

Required Data Elements

The required data elements differ slightly depending on what entity is transmitting the data. In general, the required data relates to:

  • the entity initiating the shipment (e.g., the entity causing the shipment to cross the border, such as the seller, manufacturer, or shipper),
  • the product in the package, the listed marketplace price, and the final recipient (e.g., the final entity to possess the shipment in the United States).

The data elements are as follows:

  1. All participants. All participants, regardless of filer type, must electronically transmit the following elements
  • Originator Code of the Participant (assigned by CBP)
  • Participant Filer Type (e.g., carrier or online marketplace)
  • One or more of the following:
  • Shipment Tracking Number
  • House Bill Number
  • Master Bill Number
  • Mode of Transportation (e.g., air, truck, or rail)
  1. Participating carriers. In addition to the data elements listed above in paragraph 1, participating carriers must also electronically transmit the following data elements:
  • Shipment Initiator Name and Address (e.g., the entity that causes the movement of a shipment, which may be a seller, shipper, or manufacturer, but not a foreign consolidator)
  • Final Delivery to Party Name and Address (e.g., the final entity to receive the shipment once it arrives in the United States, which may be a final purchaser or a warehouse, but not domestic deconsolidation)
  • Enhanced Product Description (e.g., a description of a product shipped to the United States more detailed than the description on the manifest, which should, if applicable, reflect the advertised retail description of the product as listed on an online marketplace)
  • Shipment Security Scan (air carriers only) (e.g., verification that a foreign security scan for the shipment has been completed such as an x-ray image or other security screening report)
  • Known Carrier Customer Flag (e.g., an indicator that identifies a shipper as a repeat customer that has consistently paid all required fees and does not have any known trade violations)
  1. Participating in online marketplaces. In addition to the data elements listed above in paragraph 1, participating online marketplaces must electronically submit the following data elements:
  • Seller Name and Address (e.g., an international or domestic company that sells products on marketplaces and other websites), and, if applicable, Shipment Initiator Name and Address (as defined in Section II.A.2)
  • Final Delivery to Party Name and Address (as defined in Section II.A.2)
  • Known Marketplace Seller Flag (e.g., an indicator provided by a marketplace that identifies a seller as an entity vetted by the marketplace and has no known trade violations)
  • Marketplace Seller Account Number/ Seller ID (e.g., the unique identifier a marketplace assigns to sellers) • Buyer Name and Address, if applicable (e.g., the purchaser of a good from an online marketplace. This entity is not always the same as the final delivery to party.)
  • Product Picture (e.g., picture of the product presented on an online marketplace), Link to Product Listing (e.g., an active and direct link to the listing of a specific product on an online marketplace), or Enhanced Product Description (as defined in Section II.A.2)
  • Listed Price on Marketplace (e.g., the retail price of a product that a seller lists while advertising on an online marketplace. For auction marketplaces, this price is the price of the final sale.)

*Different entities may transmit different data elements for the same shipment.

To participate in the program, prospective parties should contact DTL to assist in the participation process! Email info@diaztradelaw.com or call 305-456-3830.

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