Feb 24, 2021 | Industry
Whether you're a CFS operator, customs broker, freight forwarder, importer, or self-filer, you know just how tedious the import filing process can be. To help combat this challenge, section 321, Title 19 of the Tariff Act of 1930 provides a simplified framework for "de minimis" shipments - those of less than a specified retail value in their country of origin - to clear customs without the need for duty or other taxes related to imported merchandise.
Entry type 86, meanwhile, was introduced in 2019 as a new entry type to further streamline de minimis shipment management by allowing qualifying entry details to be filed electronically using the Automated Broker Interface (ABI).
It's one thing to recognize the value of entry type 86 for section 321 de minimis shipments. It's quite another to effectively put this advantage into practice, especially for large volumes of low-value merchandise.
In this guide to simplifying the import process for your type 86 shipments, we'll dig into legislative and amendment details, examine key differentiators, assess potential benefits and pitfalls, and highlight the need for specific customs compliance software solutions to maximize the advantages of section 321 type 86 entry filings.
Section 321(a)(2)(C) of the Tariff Act of 1930 authorizes the CBP (U.S. Customs and Border Protection) to provide an administrative exemption that allows entry of de minimis shipments - those with a fair retail value of $200 or less in their country of origin - without tax, duty, or other penalties.
This amount was amended to $800 in 2015 with the passage of the Trade Facilitation and Trade Enforcement Act (TFTEA), further streamlining the process of low-value shipment importation into the United States.
Entry type 86 was deployed on September 28th, 2019 as a voluntary test that allows customs brokers and self-filers to electronically submit de minimis entries through ABI.
As noted by the CBP, entry type 86 is designed to "improve import safety and security by providing greater visibility into low-value shipments." The use of entry type 86 filings through ABI is not mandatory.
It's also worth noting that entry type 86 filings are applicable to shipments that fall under partner government agency (PGA) import guides, so long as they remain below the $800 threshold. While filers are still responsible for satisfying any PGA requirements, simply being subject to PGA import rules does not bar de minimis shipments from qualifying for entry type 86.
Entry type 86 differs from standard shipment filings in several key ways, including:
Because type 86 entry filings are submitted electronically via ABI interfaces and qualifying de minimis shipments don't require the payment of taxes, duties or fees, properly completed filings can streamline the shipment release process.
The de minimis provision was established to reduce friction for low-value merchandise shipments. As a result, type 86 filings do not require customs bonds or entry summaries.
Section 321 allows for one shipment, per person, per day that does not exceed $800 to qualify for tax, customs duty, and fee exemption. As a result, filers may not consolidate multiple shipments into a single 321 filing - only the details of one master or house bill of lading may be submitted for consideration at a time.
Air Cargo Advance Screening (ACAS) security filings are still required for shipments arriving by air, even if they qualify for entry type 86 filings. While this information is typically provided by carriers or freight forwarders, it's in the best interest of shipment owners or purchasers to ensure it is completed in full before filing entry type 86.
As of January 1st, 2019 all truck carriers transporting section 321 shipments are required to complete ACE eManifests. Ocean and air shipments are also subject to this requirement; voluntary entry type 86 ACE submissions, meanwhile, can be used for shipments entirely comprised of section 321-compliant goods to provide increased CBP visibility and reduce processing time.
By voluntarily supplying the CBP with section 321 shipment details for low-value goods, it's possible to significantly reduce the time to release without the need to file a formal entry.
As noted by the CBP entry type 86 FAQ, this voluntary filing method is applicable to any regulated commodities that require PGA message sets or have associated disclaims. Worth noting? Those subject to PGA fee collection are not eligible.
Owners, brokers, and importers are permitted to file multiple type 86 entries with a single Excel file upload so long as they comply with the one shipment, per person, per day stipulation.
Entry type 86 eManifests require owners, purchasers, or brokers to supply shipment data including bill of lading or air waybill number, entry number, planned port of entry, shipper name and address, consignee name and address, country of origin, quantity, fair retail value in country of shipment, 10-digit HTSUS number and IOR number. Providing this detailed information helps reduce shipment risk and improve security, in turn improving release timelines.
While basic ABI software modules can typically handle small volume entry type 86 filings - such as one or two per day - consistent, high-volume filings require purpose-built software services designed to manage the value of velocity of these eManifests at scale.
PGAs are also potentially problematic. For example, if companies are filing 100,000+ type 86 entries each month, it's easy to get bogged down by applicable PGA flags, some of which require specific action and some of which are ineligible due to required fee payments.
Put simply? While filing single entry type 86 eManifests is straightforward for individuals, customs brokers and importer organizations require software capable of efficiently handling multiple entries simultaneously without compromising accuracy.
To ensure entry type 86 filings meet CBP requirements and reduce customs holds, companies need software tools that include capabilities such as:
Your software must be able to handle thousands of bills simultaneously - if it gets bogged downloading or processing entry data any time, then gains from type 86 are null and void.
Solutions that empower direct ABI connection and the ability to submit entries via EDI or API make it easier to submit multiple entry type 86 bills for approval simultaneously.
PGA flags may invalidate entry type 86 submission if fee payment is required. As a result, it's critical to deploy software solutions that include automatic analysis of potential PGA flags for filing.
Compliance with all 50 PGAs is made significantly easier with the ability to automatically disclaim PGAs across the entire entry set.
PGA flags that cannot be disclaimed require submission of standard section 321 eManifests. Automatic display of these flags reduces time spent searching for these non-compliant entries.
Entries will often share the same harmonized tariff schedule (HTS) codes; mass-replace tools eliminate the time-consuming task of manual identification and replacement.
Depending on their PGA flags and HTS codes, entry status and release times will differ across orders. ACE software that automatically segregates entries into On Hold, Rejected, Accepted, and Released status can help streamline internal order tracking.
Reducing processing friction is essential for your customs business to satisfy customer expectations while remaining profitable. Entry type 86 makes it possible to better manage Section 321 de minimis imports but also offers the biggest benefit to importer operations when paired with intelligent, automated ABI software tools capable of handling large volume, low-value shipment filings at scale.
Request a demo to learn how !