The US government has several import and export regulations to ensure that the goods and services exchanged across borders are safe for citizens and public use. Additionally, several customs clearance requirements are imposed on all FDA imports that enable traders to import the eligible items duty-free.
The imports in February 2023 amounted to as high as $321.7 billion and suggest a rising trend. It is high time that traders reimagine their FDA prior notice processes to capitalize on the benefits of Section 321 for all their eligible FDA imports.
To that end, advanced technological solutions play a crucial role in helping with process improvements, automation, and data analytics. As a trader, let’s look at how you can streamline your Section 321 entry using new-age technology.
What is Section 321 CBP?
Section 321 is a part of the statute 19 USC 1321 that describes di minimise. De minimis is the provision of the importation of cargo free of duty & tax as long as the aggregate fair retail value is under $800 per person, per day. According to this section, businesses importing goods can also avail of duty-free imports for all the goods that qualify. Typically, FDA imports below $800 are eligible, with a few exceptions. There are several cost-impacts of FDA prior notice web entry under Section 321:
- Reduction or waiver of import taxes
- Reduction in customs fees
- Reduction or complete exemption from import duties
Section 321 was included in the Tariff Act of 1930 to provide businesses with frequent cross-border trading operations with a way to streamline trade and make it more cost-effective. The qualifying goods could clear customs smoothly if businesses provided their US FDA prior notice to avail of the benefits under 321 Sec.
Section 321 Customs: How Does it Work?
The true advantage of Section 321 entry lies in understanding how it works. Not all imported goods are eligible for customs clearance benefits under Section 321.
Principally, all the products, goods, and services imported with a maximum value of $800 are eligible for the benefits of Section 321 customs.
All food-importing businesses must submit an FDA prior notice web entry containing crucial item information to the Food & Drug Administration (FDA). Item details (like price and nature of goods) that can help customs compliance authorities establish the import as eligible for benefits under Section 321 should be submitted as soon as an order is generated.
There are three major restrictions that traders need to keep in mind:
- There are exceptions to the $800 cap for goods eligibility for exemptions. Items like cigars, cigarettes, alcoholic beverages, harsh chemicals, products under regulations, goods under countervailing and anti-dumping duties, and others that need to be inspected do not qualify.
- The second restriction maintains that the companies/individuals can claim the benefits under this section only if they make one or more shipments per day with an aggregate value of $800. Any more than that, and the benefits are not applicable.
- In the case of imports attracting anti-dumping or countervailing duty, are not allowed to be entered under Section 321.
Three Ways That Technology Can Improve Section 321 Entry Requirements
Technology has the power to transform business processes and make them more efficient. Especially in the case of customs clearances, where the paperwork is extremely tedious, and shipments are time and cost-sensitive, technological solutions can significantly speed things up and minimize errors.
Today, an increasing number of traders and shippers are implementing software that enables them to set up an electronic data interchange between inventories, imaging, scanning, and customs compliance systems. A large part of prior notice FDA for Section 321 is automated, making form submissions simpler and time-bound.
Listed below are the three major ways in which technology can truly change the way shipments clear customs:
Digitization involves bringing all the paperwork into the digital world. Customs compliance is associated with countless forms, applications, manifests, quality check documents, etc., which can be exchanged electronically.
Studies show that the entire process efficiency can be boosted by almost 50% by digitizing such operations. Technologies like IoT “(Internet of Things) allow for intercommunication between multiple devices and services to facilitate process movement, thereby increasing the overall efficiency of Section 321 entry.
Automation helps reduce process times drastically by allowing the smart execution of clerical and repetitive tasks on the clock. To avail of the benefits under Section 321, FDA prior notices must be submitted on time. Automating the prior notice FDA creation and allowing quicker data entries helps speed the process.
Additionally, a connection between these automation systems and compliance authorities can be easily set up to facilitate quicker form submissions and approvals.
Artificial intelligence can revolutionize how customs authorities detect high-risk goods and several other shipments that need a more thorough inspection before they can pass the border.
The process of identifying such goods can be streamlined by generating automated alerts based on predetermined criteria, configurable business rules, ground intelligence, risk indicators, and known profiles.
Furthermore, technology can be leveraged to integrate application monitoring tools that help reduce system failures and downtimes.
Businesses can also consider incorporating multiple IT solutions that enable end-to-end visibility in the movement of shipments.
CustomsCity Section 321 Data Pilot: The New-Age Technological Solution for Customs Clearances
CustomsCity offers a market-leading solution for expediting the eCommerce customs clearance process for Section 321. The solution envisions the creation of a “Green Lane” or a “Highway” for clearing customs for traders participating in the Data Pilot program.
If you belong to any of the following categories, you can consider adopting the Section 321 Data Pilot program to speed up your customs process:
- Freight forwarder
- Online retailer
- Customs broker
The CustomsCity platform aims to make it easier for traders to keep track of their compliances in an easy, expedited, and automated way.
In simpler terms, the customs compliance processes will be speedier if you’re a part of the Data Pilot program because the shipment details for all your goods will always reach CBP on time, allowing you to transfer your goods smoothly.
This is a pivotal step in speeding up border clearances because of two reasons:
- If information isn’t submitted on time, it will also delay the approval process on the CBP side. This can be avoided using CustomsCity Section 321 Data Pilot.
- If, for any reason, your cargo gets held up at the border because of a lack of information, it could cause delays and increase logistics costs. With CustomsCity solutions for Section 321 entry, such hold-ups can be completely avoided.
CustomsCity Section 321 Data Pilot makes it simpler for you to create security pre-assessment notices for all your eligible goods and for CBP to issue approvals on time with all the information handy. The platform submits the following information to the CBP beforehand to prevent any hold-ups down the line:
- Entity information that identifies who the shipper is
- Enhanced product descriptions for quick product inspections
- URLs to the products online
- HTS Code for quickly determining and cross-checking the applicable tariff duties for each product
- Product images
- Retail price of the product
- The wholesale price of the item
- Weight of the product
- Quantities ordered
- A label for Known Shipper or Known Customer
This information makes it possible for the CBP to quickly work with the approvals and prior notices for all the products in your shipment. Your shipments go through the border without any information or approval-related issues, speeding the process significantly.
Customs compliance relies heavily on prompt and informative communication between traders and customs authorities. Before the rise of technologically driven communications, the excessive paperwork made the entire process tardy and tedious.
However, today, shippers and traders worldwide have opened up to the possibility of adopting technology for achieving customs efficiencies. A study published by the World Trade Organization reported that 81% of the customs authorities worldwide already have a strategy to adopt automation and technologically advanced solutions for speeding up the entire process.
It’s worthwhile to ponder the benefits of technology in transforming Section 321 clearances. To understand how to leverage technology to enhance your trade, visit CustomsCity.