Delivering Imports to Amazon (FBA) using Section 321

Delivering imports to the Amazon FBA program has been improved due to the recent guidance by the Customs and Border Protection (CBP) administrative ruling on fulfillment centers and warehouses. According to the ruling, imports can be admitted tax and duty-free into the US as long as that merchandise has a value of $800 or less in the country of shipment and is imported by one person on one day.

Starting on July 28, 2020,  domestic warehouses and fulfillment centers such as Amazon qualify as one person for unsold merchandise. Under the new ruling foreign sellers/owners of unsold merchandise sent to fulfillment centers such as Amazon may be deemed, as the one-person entity under the Section 321 program. However, this is only applicable if the total value of the merchandise imported into the US is $800 or less and the identity of the owners/sellers is provided to CBP.

Amazon FBA Amazon FBA Section 321 Amazon FBA Type 86

Below is an example of the Section 321 filing of seller info “in care of” the warehouse/fulfillment center.

Amazon FBA Amazon FBA Section 321 Amazon FBA Type 86

How CBP Enforces the Administrative Ruling

CBP is using an informed compliance approach of working with its partners to educate and identify parties who may have large volumes that may be ineligible for Section 321 shipment exceptions. CBP has asserted that they will be taking enforcement action against repeat and egregious violators. These measures may include revoking Section 321 privileges, placement of holds on ineligible shipments, and requiring that the importer undergo formal entry until they prove compliance over a sustained period.

What Amazon FBA is Doing to Ensure Compliance

Domestic Warehouse and fulfillment centers such as Amazon are coordinating with merchandise owners to ensure that they comply with Section 321 regulations. Any merchant who receives unsold merchandise with a value of $800 or less can coordinate with Amazon FBA to ensure they are compliant.

In addition to this Amazon has its own internal rules to ensure compliance. These rules and regulations include:

The Provision of an Importer of Record

If you are importing merchandise into the US from another country, you will have to provide an importer of record on the customs entry form. Amazon will not act as an importer of record for any FBA shipments imported into the US. Non-compliance may result in the shipment being returned or rejected.

The IOR is critical as it is used for:

  1. Ensuring that imported merchandise complies with local regulations and laws
  2. Filing entry declarations with any associated documents
  3. Paying import fees, taxes, and duties associated with the merchandise

Non Resident Importers

Shipments imported into the US can be entered by a foreign (non-resident) IOR. Custom brokers or carriers can assist non-resident importers to get the non-resident IOR.

Restricted or Prohibited Products

Importers need to comply with FBA product restrictions and any other restrictions set out by CBP and other partner government agencies. Some of the common items that will need additional authorizations and permits include:

  • Pesticides
  • Agricultural products
  • Hazardous goods
  • Food and alcohol
  • Medical devices, medications, and drugs
  • Supplements and vitamins

Importers that do no comply with the product restrictions, safety requirements, and product preparation requirements may result in the Amazon fulfillment center disposing of, rejecting, or returning inventory upon receipt. Amazon may also impose additional non-compliance charges and may even block the importer from shipping to the fulfillment center in the future. The best way to ensure compliance is by hiring the services of a customs broker who usually has a good understanding of CBP and partner government agency (PGA) requirements. This is critical as the CBP will seize and hold any shipments not properly declared with the proper PGAs.

Customs Brokers

Customs brokers are firms or private individuals licensed by the CBP to prepare and file the necessary paperwork for customs and arrange for the release of goods and payment of duties and taxes and overall represent importers in matters to do with customs.  CBP provides a list of licensed customs brokers on its website. Amazon also provides a list of customs brokers which is available for importers using the Seller Central portal. It is always advisable to contact a customs broker, courier, or freight forwarder before importing any merchandise to understand their requirements and fees.

Shipping Costs, Taxes, and Duties

You will need to use an IOR to pay your customs fees, taxes, and duties. The amount you pay will depend on the value of products and the shipment imported. This is where customs brokers will come in handy as they will help determine what you need to pay. Amazon will not be involved in the collection of any taxes, duties, or shipping costs. Any FBA inventory with collect charges will be rejected immediately.

Shipping to an Amazon Fulfilment Center

The Amazon Fulfilment center can be listed as the deliver-to party if you are importing goods into the Amazon Fulfilment Center. You should collaborate with your customs broker to ensure that your documentation is filled out correctly to avoid any issues with customs.

Ultimate Consignee

Amazon may be listed as the final consignee on your documentation as long as it is indicated that that the consignment is in care of Amazon FBA. Nonetheless, Amazon cannot be listed as the PGA consignee, PGA importer, or importer of record. If Amazon is listed as the ultimate consignee on the bill of lading, the shipment will need to be physically delivered to the Amazon fulfillment center. However, the importer needs to use a special number provided by Amazon to identify the shipment as heading to the fulfillment center. Not using the identification number may result in seizures, detentions, and delays at the port of entry and disposal or rejection at the Amazon fulfillment center.

Special Rules for Section 321 Shipments

Any importer shipping to the Amazon fulfillment center may qualify for Section 321 duty-free entry. However, CBP requires that the importer provide a customs entry filing or shipping manifest with the name of the owner and “in care of “ the Amazon fulfillment center where the imported merchandise is headed. Since it is the responsibility of the importer to ensure their merchandise is compliant with duty-free entry requirements, you should consult with a customs broker. They will ensure that you are compliant with all CBP & PGA import and shipping requirements.

Return of Imports

Amazon will not return any inventory in the Amazon fulfillment center to any addresses outside the US. Moreover, the Amazon FBA program will not provide pick-up options at Amazon fulfillment centers for sellers. Any sellers that wish to have their merchandise returned to them need to provide an address in the US.

Book a Free Consultation Today