SECTION 321 TYPE 86 Frequent Asked Questions

As the world adjusts to life with COVID-19, the surge in popularity of online shopping shows no signs of slowing down. To help manage the flow of goods, CBP introduced the voluntary Section 321 Type 86 entry on September 28th, 2019. This entry type eliminates duties and taxes for merchandise shipments valued at less than de minimis level of US$800, imported by one person on one day. Goods may enter the country by air, land, and sea through all commercial ports of entry (except for mail importation ).

Q1: Why type 86 entry is better when we can also use type 11 informal entry to clear goods under 800 USD

Type 86 clearance is less complex and hence more efficient for low-value parcels when compared to Type 11 informal entry. Also, using the type 86 specialized software, you can clear thousands of entries within minutes. It is a perfect logistics solution to help e-commerce businesses across the border.

Q2: Can you clear Type86 entry in any port of the United States?

Yes, you can however, better resources are spread in the major port in LAX, ORD, and JFK. This is a very new program, so please make sure you consult with the local CBP port prior to shipping goods. They would prefer the broker/ importer send them a pre-alert manifest.

Q3: Does the broker need to collect thousands of Power Of Attorney from the individual consignee.

Per CBP federal notice, The Power of Attorney is required between the importer or nominal consignee and the customs broker. The nominal consignee is usually the party representing the exporter, importer, or consolidator of the cargo. There is no such requirement for the broker to collect POA from every individual consignee which can number in thousands.

Q4: if my shipped goods value 1500 USD. Can I declare the 800 USD portion as duty-free and pay duty & tax for the remaining portions?

No, you cannot. Shipment cannot be broken up to take advantage of 800 USD duty-free treatment.

Q5: Do you need a bond for type 86 entry? Do you need to pay MPF and/or HMF?

There is no bond requirement for qualified type 86 entry. Also, you do not need to pay the duty, tax, MPF, and/or HMF Fee! You heard right, all free!

Q6: What are the permissible goods to file type 86 entry

Per CBP regulation, "Goods subject to Antidumping/Countervailing Duty (AD/CVD), goods subject to quota, certain tobacco and alcohol products, and goods taxed under the Internal Revenue Code, are not permitted to be filed under Entry Type 86. "

Extra notes: Entry Type 86 will be applicable to any PGA regulated commodity that requires a PGA message set, including those that have associated disclaims. Entry Type 86 is not available to PGA-regulated commodities that require fee collection. I recommend goods subject to PGA regulation do not ship with type86 entry.

if you are still not sure, you can bring the shipment details to ask me.

Q7: If I file the type 86 entry for goods from China, I don't have to pay the section 301 List 1 / List 2 / List 3 / List 4A additional duty right?

Correct. As long as your goods are permissible goods to file type 86 entry ( see Q6), you do not have to pay section 301 additional duty.

Q8: f I file the type 86 entry for goods from China, I don't have to pay the section 232 additional duty right?

Correct. As long as your goods are permissible goods to file type 86 entry ( see Q6), you do not have to pay section 232 additional duty.

Q9: If I make mistake, can I file PSC (Post entry summary correction)?

No, you cannot. Type 86 entry does not have an entry summary, therefore you cannot do PSC. If your entry contains wrong data, you can cancel the entry and file it again.

Q10: Why would my shipment gets held by CBP even I file type 86 entry to clear goods

Yes of course. Non-compliant goods are subject to CBP exam and even penalty or destroy action. Type 86 entry is a clearance method but not a " green avenue ". If the shipment contains prohibited items or involved with illegal activities, you will certainly expect CBP action following after.

Q11: What is the purpose of implementing Type 86 entry from CBP's perspective since they get no revenue from it

To adapt to the e-commerce trend, CBP must take action to enforce compliance in the trade community to avoid market opportunist. Section 321 Type 86 entries are subject to a higher degree of scrutiny from CBP, especially regarding accurate valuation. U.S. Customs is using multiple methods, including pricing comparisons, to ensure accuracy and verify that goods do not exceed the $800 threshold.

More questions? Let us chat.

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