De Minimis & Section 321: Your Questions Answered

De minimis is the value threshold below which imported goods can enter a country with reduced or no customs duties and simplified entry procedures. In the United States, this threshold is currently $800 per shipment under Section 321 of the Tariff Act of 1930.

The de minimis provision exists to reduce administrative burden for low-value shipments that wouldn't generate significant duty revenue. It has been instrumental in enabling cross-border eCommerce growth.

Section 321 is the specific US customs regulation that allows merchandise valued at $800 or less to be admitted duty-free and tax-free. It's processed through a Type 86 entry rather than a formal customs entry.

Section 321 was updated in 2016 to raise the threshold from $200 to $800, significantly expanding its use for eCommerce shipments.

The $800 de minimis threshold applies to the total value of the shipment, not individual items within it. If you ship 5 items worth $200 each (total $1,000), the shipment exceeds the threshold and requires formal entry with duties.

Important: Artificially splitting a single order into multiple sub-$800 shipments to avoid the threshold is considered fraud and is strictly prohibited.

The value is based on the fair retail value of the merchandise in the country where it was purchased. This typically means:

• The price actually paid for the goods
• Excludes international shipping costs to the US
• Excludes insurance costs
• Must be converted to USD if in foreign currency

Example: Product cost $750 + international shipping $100 = $850 total. The de minimis value is $750 (product only), so it qualifies.

While the $800 threshold remains, CBP implemented three major changes:

1. Enhanced data requirements: All Section 321 shipments now require 10-digit HTS codes, complete product descriptions, country of origin, and manufacturer information
2. Category exclusions: Certain products are now excluded from Section 321 entirely, regardless of value
3. Increased enforcement: Higher audit rates, sophisticated targeting systems, and stricter penalties for non-compliance

These changes effectively make Section 321 entries require almost as much documentation as formal entries.

CBP cited several drivers for the 2025 changes:

• Volume explosion: Over 685 million de minimis shipments entered in 2024, up from ~140 million in 2016
• Revenue protection: Concerns about duty circumvention and lost tax revenue
• Enforcement gaps: Difficulty identifying counterfeit goods, forced labor products, and fentanyl precursors
• Trade remedy circumvention: Use of de minimis to avoid Section 301 tariffs and anti-dumping duties
• Data analytics: CBP needed better data for targeting and risk assessment

While the threshold remains at $800 as of 2025, there are active legislative proposals to reduce it. Several bills in Congress propose:

• Lowering the threshold to $200 or $100
• Eliminating de minimis entirely for certain countries (especially China)
• Implementing per-person daily limits
• Expanding category exclusions

Importers should monitor legislative developments and have contingency plans for potential threshold changes.

As of 2025, all Section 321 shipments must include:

• Product details: 10-digit HTS code, complete description, material composition
• Origin: Country where goods were manufactured (not just shipped from)
• Value: Accurate fair retail value in USD
• Manufacturer: Full name and address
• Seller: For marketplace goods, seller information
• Importer of record: Name, address, EIN or SSN
• Consignee: Ultimate recipient information

Generic descriptions like "garment" or "electronics" are no longer acceptable.

Yes. As of 2025, a 10-digit HTS classification code is mandatory for all Section 321 shipments, regardless of value. This represents a major change from previous requirements.

Accurate classification is critical because:

• Some HTS codes are excluded from Section 321 treatment
• Incorrect codes trigger examinations and delays
• Misclassification can result in penalties
• CBP uses classification data for targeting

You have several options:

1. Use the USITC HTS database: Free searchable tool at hts.usitc.gov
2. Classification software: AI-powered tools suggest codes (80-90% accuracy)
3. Hire a customs broker: Licensed professionals provide expert classification
4. Request a binding ruling: Get official CBP determination for complex items

Read our complete HTS classification guide →

For Section 321 shipments, you'll need:

• Commercial invoice: Itemized list with values, descriptions, origin
• Packing list: Details of package contents
• Bill of lading or air waybill: Transportation document
• Manufacturer information: Often on commercial invoice
• Country of origin documentation: If different from shipping origin

Additional documents may be required for regulated products (FDA, USDA, EPA, etc.).

The following categories cannot use Section 321 regardless of value:

• Section 301 tariff goods: Primarily products imported from China subject to trade war tariffs
• Textiles and apparel: Most textile products requiring Section 204 declarations
• AD/CVD orders: Items under anti-dumping or countervailing duty orders
• Certain agricultural products: Items requiring USDA clearance or quotas
• Regulated items: Products requiring FDA, EPA, or other agency pre-approval
• Alcohol and tobacco: Beverages, cigarettes, and related products

These exclusions significantly impact eCommerce from China and Southeast Asia.

Check the HTS code in the tariff schedule:

1. Look up your product's 10-digit HTS code at hts.usitc.gov
2. Check the "Special" column for rate information
3. Look for footnotes indicating Section 321 exclusions
4. Verify country of origin against Section 301 tariff lists

When in doubt, consult with a licensed customs broker before shipping. The cost of classification assistance is far less than clearance delays or penalties.

Shipping an excluded product under Section 321 results in:

• Immediate hold: CBP will refuse Section 321 treatment
• Formal entry required: Must file proper entry and pay applicable duties
• Storage fees: Daily fees accrue while goods are held
• Potential penalties: If CBP determines intentional circumvention
• Shipment delays: Can take 5-10 days to resolve

Prevention is far better than remediation—verify eligibility before shipping.

With 2025 requirements, typical costs are:

• Customs broker fees: $3-12 per shipment depending on volume and complexity
  • High volume (1000+/month): $3-5 per shipment
  • Medium volume (100-1000/month): $5-8 per shipment
  • Low volume (<100/month): $8-12 per shipment
• Classification software: $200-500/month for automated tools
• DIY compliance: $0.50-2/shipment in internal labor and systems

These costs have increased 40-60% from pre-2025 levels due to enhanced requirements.

No direct CBP fees for Section 321 shipments that qualify for de minimis treatment. However:

• Carrier may charge customs clearance handling fees ($5-15)
• If shipment is examined, storage fees may apply ($25-50/day)
• Refused shipments incur return or abandonment costs
• Formal entry (if required) includes MPF fee of $27.75 minimum

Yes, if you ship regularly. Consider a broker when:

• Processing 100+ shipments monthly (economies of scale)
• Handling complex or regulated products
• Lacking internal classification expertise
• Your examination rate exceeds 2-3%
• Time cost of compliance diverts from core business

ROI calculation: If a broker saves you 2 hours/week at $50/hr, that's $400/month value. At 500 shipments, that's $0.80/shipment in time savings alone, often justifying the broker fee.

No, you're not legally required to use a customs broker for Section 321 entries. You can:

• File entries yourself if you have the expertise
• Work with your freight forwarder or carrier
• Use automated classification software

However, with 2025's enhanced requirements, most businesses find professional assistance valuable or necessary, especially at higher volumes.

Key factors when selecting a customs broker:

• Licensing: Valid CBP broker license (verify at CBP.gov)
• Experience: Track record with your product categories and volume
• Technology: Modern systems, API integration capabilities
• Pricing: Transparent fee structure with volume discounts
• Scalability: Ability to handle your growth
• Support: Response times and communication channels
• References: Client testimonials from similar businesses

No. No broker can guarantee zero examinations—CBP makes all examination decisions. However, a good broker can:

• Minimize examination rates through accurate classification and documentation
• Expedite resolution if your shipment is selected for exam
• Reduce delays through proper preparation and CBP relationships
• Prevent penalties by ensuring compliance from the start

Typical examination rates: 1-2% with good broker, 5-10%+ without proper compliance.

Undervaluing shipments to stay under the $800 threshold is fraud and carries severe consequences:

• Civil penalties: Up to $10,000 per violation
• Loss of privileges: Revocation of Section 321 eligibility
• Back duties plus interest: Payment of all duties that should have been collected
• Criminal prosecution: In egregious or repeated cases
• Seizure of goods: CBP can seize merchandise

CBP uses sophisticated analytics to identify undervaluation patterns. Don't risk it.

Consequences depend on whether the error was accidental or negligent:

Accidental errors (good faith):

• Requirement to correct and pay any duty difference
• Possible interest on unpaid duties
• Educational outreach from CBP

Negligent or repeated errors:

• Penalties of 20-40% of duties owed
• Increased scrutiny and examination rates
• Potential loss of Section 321 privileges

Best practice: Document your classification rationale to demonstrate reasonable care.

Yes. CBP conducts audits of Section 321 importers, especially high-volume operations. Audits examine:

• Classification accuracy across sample shipments
• Value declaration practices
• Compliance with exclusion categories
• Record-keeping and documentation
• Whether shipments should have been formal entries

Audit triggers: High volume, elevated examination rates, tips/complaints, or random selection.

Records retention: Maintain all documentation for 5 years from entry date.

High-volume 3PLs typically use a hybrid approach:

1. Automated classification software for first-pass suggestions (90%+ of volume)
2. Expert review queues for low-confidence or complex items (5-10%)
3. Customs broker partnerships for regulated categories and audits
4. Client data quality enforcement to ensure complete information upfront
5. Continuous monitoring of KPIs (examination rates, clearance times, accuracy)

Read our complete 3PL compliance guide →

It depends on the importer of record (IOR) designation:

If client is IOR:

• Client bears legal liability for classification and value
• 3PL provides facilitation services only
• Client responsible for duties, penalties, and compliance

If 3PL is IOR:

• 3PL assumes all compliance liability
• 3PL responsible for duties and penalties
• Requires customs bond and risk management
• Typically charged as premium service (3-5% of value)

Best practice: Clear written agreements defining responsibilities before first shipment.

Typical clearance timelines for compliant Section 321 shipments:

• Best case: 2-6 hours (immediate electronic release)
• Typical: 12-24 hours (standard processing)
• With questions: 2-3 days (CBP requests additional info)
• If examined: 3-7 days (physical inspection required)
• Problem shipments: 7-14+ days (refused, requires formal entry, etc.)

Factors affecting speed: Documentation completeness, product category, port congestion, examination selection.

Yes. Even de minimis shipments under $800 arriving by ocean vessel require an Importer Security Filing (ISF) to be filed at least 24 hours before the vessel departs from the foreign port.

Failure to file ISF results in $5,000 penalties regardless of shipment value. Most carriers or brokers handle ISF filing automatically, but confirm who is responsible before the first shipment.

Learn more about ISF filing →

Yes, there is technically no limit on the number of Section 321 shipments you can receive. However:

• Each shipment must be bona fide separate - artificially splitting orders is fraud
• CBP monitors patterns - receiving dozens of near-$800 shipments daily triggers scrutiny
• High volumes may suggest commercial activity requiring formal entry
• "One per person per day" restriction has been proposed in pending legislation

Best practice: Document legitimate business reasons for multiple shipments (different customers, different suppliers, etc.).

Section 321 applies to both personal and commercial imports under $800, but the distinction matters:

Personal imports:

• For personal use, not resale
• Simpler documentation often accepted
• Lower scrutiny for occasional imports
• Individual is the importer of record

Commercial imports:

• For resale or business use
• Full 2025 documentation requirements apply
• Higher examination rates
• Business entity is importer of record
• May require additional licenses/permits depending on product

Note: CBP determines commercial intent based on volume, frequency, and product type—not just your declaration.

When a Section 321 shipment is refused or returned:

• CBP refusal: If ineligible for Section 321, you have 3 options: (1) File formal entry and pay duties, (2) Abandon the shipment, or (3) Export back to origin at your expense
• Recipient refusal: Carrier returns to sender; no additional customs clearance needed for return if within 45 days and in same condition
• Abandoned shipments: Become property of US government after 6 months, destroyed or sold at auction
• Return shipping costs: Usually $100-500+ for international return, plus any storage fees incurred ($25-50/day)

Prevention: Verify Section 321 eligibility and all documentation before shipping to avoid costly returns.

Yes, significantly. Different carriers have different capabilities and clearance speeds:

• Express carriers (FedEx, UPS, DHL):
  • Own customs brokerage operations
  • Fastest clearance (typically 2-6 hours)
  • Higher shipping costs but end-to-end tracking
  • Handle Section 321 documentation automatically
• Postal services (USPS/foreign posts):
  • CBP processes at mail facilities
  • Slower clearance (1-5 days typical)
  • Lowest cost option
  • Less predictable timing
• Ocean freight forwarders:
  • Require separate customs broker often
  • Clearance time: 12-48 hours
  • Best for bulk/consolidated shipments
  • ISF filing required (24 hours before vessel departure)

Section 321 exempts goods from federal duties and taxes, but does not exempt state/local taxes:

• Sales tax: You may owe use tax in your state on imports, even if duty-free
• Collection responsibility: Varies by state—some collect at border, most rely on self-reporting
• Marketplace sellers: Must collect sales tax from customers in states where you have nexus
• Business imports: Should consult CPA about use tax obligations

Important: Section 321 only deals with customs duties—not state tax obligations.

Yes, but with important considerations:

• Eligibility: Each shipment must be valued under $800 total. Common for small test batches or new product launches.
• Amazon as consignee: The shipment goes to Amazon's warehouse, with your business as the importer of record
• Product restrictions: Many Amazon products (electronics, textiles from China) are excluded from Section 321 due to Section 301 tariffs
• Labeling requirements: Amazon's FBA labeling requirements still apply (FNSKU, prep, etc.)
• Volume scaling: Once you're shipping $800+ regularly, formal entry becomes necessary

Read our complete Amazon FBA customs guide →

CBP requires importers to retain records for 5 years from the date of entry. Keep:

• Commercial invoices: Showing item descriptions, values, origin
• Bills of lading/air waybills: Transportation documents
• Packing lists: Detailed contents of each shipment
• HTS classification documentation: Rationale for codes used
• Communications with suppliers: Email confirmations, purchase orders
• Payment records: Proof of value paid
• Entry confirmations: CBP release documents

Audit tip: Digital records are acceptable. Use cloud storage with search/retrieval capabilities for easier audit response.

Top 10 mistakes causing delays in 2025:

1. Generic product descriptions ("electronics", "apparel" instead of specific items)
2. Wrong or missing HTS codes (not providing full 10-digit classification)
3. Incorrect country of origin (listing ship-from country instead of manufacturing origin)
4. Missing manufacturer information (incomplete or placeholder addresses)
5. Attempting Section 321 for excluded categories (Section 301 goods, textiles)
6. Undervaluing shipments (to stay under $800 threshold)
7. No ISF filing for ocean shipments (results in automatic $5,000 penalty)
8. Incomplete consignee information (missing address details or contact info)
9. Mixed personal/commercial messaging (declaring personal use but shipping to business)
10. Assuming carrier handles everything (not verifying what's included in service)

Prevention: Work with experienced customs professionals for first few shipments to establish compliant processes.

Section 321 regulations are actively evolving. Stay informed through:

• CBP.gov Newsroom: Official announcements of regulatory changes (cbp.gov/newsroom)
• Federal Register: Proposed and final rules (federalregister.gov)
• Customs broker updates: Brokers monitor changes and notify clients
• Trade associations: Organizations like AAEI, NCBFAA provide member updates
• Legislative tracking: Monitor bills in Congress that could change the $800 threshold

Subscribe to our blog for plain-English updates on customs regulatory changes. Browse our latest articles →

Yes. CBP offers several programs for proactive compliance review:

• Focused Assessment (FA): CBP reviews your import processes and provides recommendations. Voluntary, confidential, and demonstrates good faith compliance efforts.
• Binding Rulings: Request official CBP determination on specific product classifications. Protects you from penalties if followed correctly.
• Pre-clearance meetings: Informal consultation with local port CBP officers about your specific products/business model
• C-TPAT (Customs-Trade Partnership Against Terrorism): Security-focused program providing expedited processing benefits

Benefits: Reduced examination rates, faster clearances, and penalty mitigation if issues arise. High-volume importers should strongly consider these programs.

Section 321 data pilot is a CBP program for high-volume e-commerce facilitators:

Standard Section 321:

• Individual entry filing for each shipment
• Used by most small/medium importers
• Processed through standard channels

Section 321 Data Pilot:

• Batch manifest submission (thousands of entries at once)
• For express carriers, online marketplaces, large 3PLs
• Requires CBP approval and specific technical capabilities
• Enhanced data submission (10-digit HTS, tariff determination, etc.)
• Faster processing but stricter requirements

Note: Unless you're processing 10,000+ shipments monthly, you'll use standard Section 321, not the pilot program.