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CBP expands volunteer ecommerce data sharing pilot program
February 2023
In brief
US Customs and Border Protection (CBP) on February 16 published a Federal Register Notice soliciting additional participants for the Section 321 Data Pilot program, which allows the agency to partner with private-sector supply-chain participants to identify and target high-risk shipments for inspection while expediting clearance of legitimate trade flows.
The program is a public-private partnership intended to mitigate risk and expedite legitimate low-value e-commerce shipments, which are entered under de minimis procedures that allow small packages valued at $800 or less to enter the United States tax- and duty-free.
According to CBP, “Expanding participation in [the program] benefits both government and industry by increasing the amount of advanced data CBP can use to identify, disrupt, and deter illegal practices like counterfeit goods that threaten legitimate businesses, while creating additional opportunities to leverage and explore new technology to facilitate legal trade flows. So far, the pilot has resulted in faster and more accurate risk assessment and adjudication for CBP and fewer CBP holds. By increasing pilot participation, the agency expects these benefits will increase as well. CBP estimates that 85% of all shipments entering the United States are small packages valued at less than $800.”
Note: The CBP website explains that “Section 321, 19 USC 1321 is the statute that describes de minimis. De minimis provides admission of articles free of duty and of any tax imposed on or by reason of importation, but the aggregate fair retail value in the country of shipment of articles imported by one person on one day and exempted from the payment of duty shall not exceed $800. The de minimis threshold was previously $200, but increased with the passage of the Trade Facilitation and Trade Enforcement Act (TFTEA).”
Action item: Companies interested in possibly participating in the pilot should contact CBP at ecommerce@cbp.dhs.gov.
In detail
Background
The program was implemented on August 22, 2019, to test risk segmentation benefits of accepting advance data from e-commerce supply chain partners, including nine voluntary pilot participants from a wide range of e-commerce supply-chain participants, including shippers, technology firms, and logistics providers.
The purpose of the program is to improve CBP's ability to identify and target high-risk shipments in the e-commerce environment, in addition to enhancing CBP's ability to facilitate trade and manage risks of shipments potentially eligible for release under Section 321 more effectively and efficiently. The increase in the number of participants transmitting data, as well as the addition of new optional data elements, are intended to provide CBP with additional data needed to measure the success of the pilot.
CBP has processed more than 380 million shipments through the program since it was initiated. Information obtained through the program, according to CBP, has enabled faster and more accurate risk assessment by CBP and fewer holds for the pilot participants that are submitting additional data elements, such as seller information, product pictures, and other details. A CBP official added that “CBP is excited to expand the pilot, as bringing on board additional partners will allow the agency to test new technologies and the collection of non-traditional data elements to identify additional facilitation benefits for the trade community and CBP.”
Expansion of program
By expanding the program, CBP intends to increase the number of trade participants that are transmitting advance data elements on Section 321 de minimis shipments for trade facilitation and risk management purposes, as well as to add optional data elements that may be submitted by any participant.
New and existing program volunteers must transmit to CBP certain required data elements for any Section 321 shipment destined for the United States for which the participant has information and will have the flexibility to transmit optional data elements as they are able to test the viability of sharing additional information.
The required data elements differ slightly depending on the entity transmitting the data. In general, the required data relates to the entity initiating the shipment (e.g., the entity causing the shipment to cross the border, such as the seller, manufacturer, or shipper); the product in the package; the listed marketplace price; and the final recipient (e.g., the final entity to possess the shipment in the United States).
The Federal Register notice includes a complete list of the required and optional data elements to be submitted by program participants.
Participation
CBP will accept an unlimited number of volunteers in the program, which will end in August 2025 unless further extended. Effective immediately, CBP has expanded the program to accommodate all parties that meet the eligibility requirements. If selected for participation, participants will be added in the order in which their applications are received in phases averaging three participants per month.
Observation: This expansion should allow CBP to continue evaluating the feasibility of the Section 321 Data Pilot program and the risks associated with Section 321 shipments.
According to the Federal Register notice, CBP seeks participation from stakeholders in the e-commerce environment, including carriers, brokers, freight forwarders, and online marketplaces. There are no restrictions regarding organizational size, location, or commodity type. Online marketplaces do not need to offer delivery logistic services to participate in the pilot. However, participation is limited to those parties with sufficient information technology infrastructure and support. The Federal Register notice outlines the program’s eligibility requirements.
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