The volume of cross border shipments has spiked due to global ecommerce as consumers and companies purchase merchandise from platforms like Amazon and Alibaba. The massive volume of parcel or low-value shipments, which make up the majority of ecommerce trade around the world, has also created new challenges for traders and customs agencies. Read on for more ACE Air and Section 321 filing for eCommerce goods.
More shipments entering the U.S. means additional work for border officers and higher risks of illegal activity going undetected. In order to keep borders secure while reducing the impact on the flow of trade, U.S. Customs and Border Protection (CBP) continues to develop, test, and implement new rules and systems.
The new entry type 86 is one such test that aims to make it easier and faster for CBP officials to identify high risk ecommerce goods that enter the country. For importers, it will expand the number of goods eligible for informal entry, thus reducing processing times and shipping costs.
Compared to formal entries, informal entries are a lot faster to prepare and submit. Shipments do not need to be bonded, and the amount of information to be submitted is significantly reduced. However, informal entries currently exclude goods regulated by participating government agencies (PGAs) like the Food and Drug Administration (FDA).
ACE Air and Section 321 Filing for eCommerce Goods: What is Entry Type 86?
Importers, customs brokers and carriers are already familiar with Section 321 shipments, a release option that allows cargo valued at $800 or less to be released by CBP free of duty and tax. Since September 2019, all shipments valued at $800 or less can be classified under a new release option called Entry Type 86.
Currently, low-value shipments or those that qualify under the Section 321 de minimis treatment are released by CBP after approving the submitted manifest information. However, manifest only release cannot be used for regulated goods. Entry Type 86 covers PGA-regulated commodities and allows for entry filing through the Automated Broker Interface (ABI).
To simplify the import process and accommodate ecommerce shipments, Entry Type 86 essentially expands the number of imports eligible for informal entry. Entry Type 86 can be used even for food items, cosmetics, and other products typically regulated by PGAs.
Entry Type 86 is not mandatory as of May 2020. It is a voluntary test. The release from manifest process is still an option for entry filing on de minimis shipments. Entry Type 86 simply provides an alternate filing option through ABI for regulated goods.
With the high volume of low-value shipments entering the country, Entry Type 86 aims to help CBP improve its management of the flow of goods. The new filing process provides greater visibility into ecommerce imports and allows CBP to improve trade safety and security.
How Entry Type 86 Works
Like Section 321, goods filed under Entry Type 86 are free from tax and duty as long as the filer completes and submits the right form to CBP. Importers can now file Entry Type 86 and complete the form through ABI in the Automated Commercial Environment (ACE).
Other parties that can file Entry Type 86 are the owner or purchaser of a Section 321 low-value shipment or a licensed customs broker appointed by an owner, purchaser, or consignee.
Entry Type 86 will be assigned an entry number, but an IOR number will be conditional and subject to PGA requirements. Like before, there is no bond requirement for this entry and no duty or tax will be collected. If there is a fee requirement (like agricultural fees), filers must submit a Type 01 consumption or Type 11 Informal Entry.
Here’s a summary of information that filers must provide for Entry Type 86:
Bill of lading or air waybill number
IOR (importer of record) number of the owner, purchaser, or broker
Shipper name, address, and country
Consignee name and address
Planned port of entry
Country of origin
“Fair retail value” in the country of shipment
10-digit Harmonized Tariff Schedule number
Because of the classification of the merchandise within a shipment to the 10-digit level of the Harmonized Tariff Schedule, Entry Type 86 is considered customs business. While Section 321 de minimis focused on travelers, entry type 86 is focused on businesses.
Coverage and Exceptions
Entry Type 86 covers any PGA-regulated commodity that requires a PGA message set, including those with associated disclaims. This entry does NOT apply to PGA-regulated commodities that require fee collection and the following:
Goods subject to antidumping (AD) and countervailing duties (CVD)
Certain tobacco and alcohol products
Goods taxed under the Internal Revenue Code
Like Section 321, a shipment cannot be broken up to take advantage of Entry Type 86. The shipment must not be one of several lots covered by a single order or contract. Multiple shipments also cannot be consolidated into one Entry Type 86.
ACE Air and Section 321 Filing: Benefits to Traders
Entry Type 86 has many benefits to importers. It speeds up the processing of low-value shipments and reduces costs with more accurate and timely information. Because it allows more shipments to enter the U.S. free of duty and tax, shippers, retailers and carriers can move more shipments each day and increase profits.
For importers of low-value goods, Entry Type 86 should reduce shipping time and costs. Filing through ABI in ACE greatly streamlines the submission process compared to paper filing. The new entry type also helps CBP identify high risk shipments faster and improves data sharing from CBP to participating government agencies.
GeTS' ACE Air and Section 321 Filing for eCommerce Goods
More ecommerce shipments are expected to enter the U.S. by air transport due to the expansion of informal entries (Type 86 and Section 32) to include PGA-regulated goods. This means more declarations to be prepared and submitted by carriers and freight forwarders via ACE.
ACE Air is a cargo inventory control and release notification system developed by CBP for shipments transported by air. ACE Air allows carrier to arrive in-bond shipments and to file in-bond, permit to proceed, and local transfers electronically. Global eTrade Services (GeTS) ACE Air greatly streamlines processes and connects filers directly with CBP via highly secure electronic data interchange (EDI).
With GeTS ACE Air, carriers and freight forwarders receive notifications such as in-bond authorizations, general order, permit to proceed, and local transfer authorization upon flight departure or arrival from the last foreign port. Air waybill data can be transmitted in any sequence.
How it Works
GeTS ACE Air increases data reliability and electronic enforcement capability by standardizing the way the trade community and customs agencies communicate. The process starts when the filer submits the entry or entry summary to CBP.
ACE reviews the submission, and holds, releases, or rejects the report. If additional documents are needed, ACE will notify the filer. CBP and PGA personnel review the submissions and take appropriate action. Finally, transactions are accepted and release messages are sent.
GeTS also offers ACE eManifest solutions for the air mode of transport, including automated Section 321
entry filings for high-volume or bulk shipments. Brokers and importers simply upload the file with Section 321 entries, and the application will populate the data to the eManifest and submit the form directly to CBP.
Learn more by visiting our ACE Air and Section 321 filing page or contact us today!
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