On July 31, 2020, U.S. Customs and Border Protection (CBP) published an administrative ruling HQ H290219 (July 28, 2020) and corresponding CSMS Message # 43534680 concerning eligibility for informal duty-free entry under 19 U.S.C. §1321(a)(2)(c) (Section 321) by online fulfillment service providers such as Amazon and eBay. CBP’s new interpretation of Section 321 will have immediate implications for businesses relying on Section 321.
Section 321 provides for the duty-free entry of articles valued at $800 or less and imported by “one person on one day.” Under this new CBP determination, when merchandise is imported into the U.S. that has not yet been sold to a consumer, CBP will consider the online fulfillment service provider to be the consignee for that merchandise and aggregate the value of these shipments to determine if the “one person on one day” and $800 or less value requirements are met. CBP will apply this standard whenever the U.S. owner or purchaser is not provided as the consignee. Customs intends to take “near term enforcement action against egregious violators” and future violators may lose their Section 321 privileges. This change will likely require formal Customs entry for much merchandise imported through online fulfillment services unless the identity of the ultimate purchaser is provided to CBP. We encourage clients to read the CSMS message and detailed ruling carefully.