On February 18, 2021, U.S. Customs and Border Protection (CBP) released a one-pager on a July, 28 2020, Administrative Ruling related to domestic warehouses and fulfillment centers.
What is the Scope of this Ruling?
19 U.S.C. § 1321(a)(2)(c) enables CBP to admit qualifying merchandise duty- and tax-free provided that the merchandise is imported by “one person on one day” and has a total fair retail value in the country of shipment of $800 or less. On July 28, 2020, CBP issued an administrative ruling recognizing fulfillment centers and domestic warehouses as the “one person” for unsold merchandise. Under this ruling, foreign owners/sellers of unsold merchandise may also qualify as the “one person” provided their identity is presented to CBP and the total value of their merchandise imported on one day is $800 or less.
What is CBP Doing to Enforce?
Through informed compliance, CBP is working closely with its trade partners to identify and educate entities who are affiliated with large volumes of ineligible shipments. CBP may take enforcement action, including against egregious and repeat violators, including placing holds on ineligible shipments, revoking Section 321 privileges, or requiring formal entry until sustained compliance is achieved.
What Can You Do to Facilitate Compliance?
Domestic Warehouse and Fulfillment Center Consignees who receive over $800 of unsold merchandise in one day can coordinate with merchandise owners to help ensure their shipments comply with Section 321 regulations. Ø Merchandise Owners may qualify for Section 321 provided the total value of their shipments do not exceed $800 on one day, and their identity (first and last name or name of company) is presented to CBP via the manifest or Entry Type 86 filing. Ø Shippers and Carriers should refer to CBP’s CAMIR and CATAIR updates to ensure the merchandise owner’s identity is presented appropriately to CBP. See below examples.
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