CBP Ruling Sets New Policy for Ultimate Consignee Listed for Unsold Section 321 Goods
Shipments of unsold merchandise entered under Section 321 exemptions must list “the proprietor of the warehouse operated by the online fulfillment service provider as the ultimate consignee,” CBP said in a ruling posted by the agency on July 31. The ruling came in response to an internal advice request from Jim Swanson, CBP director-cargo and conveyance security and controls, it said. “While a nonresident may not be listed as the ultimate consignee, the nonresident may make the informal entry as an owner or purchaser,” CBP said.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
CBP highlighted the ruling in a July 31 CSMS message. "Moving forward, in situations where merchandise has not been sold to a consumer at the time of importation, CBP will consider the consignee (likely the U.S. fulfillment facility or warehouse taking custody of the merchandise) to be the 'person' for Section 321 eligibility purposes," it said. The ruling will help "CBP to identify duty evasions and other abuses consistent with current authorities and helps create a more predictable enforcement environment for trade," it said.
The ruling is dated July 28, so it is effective as of then, CBP said in the message. "CBP intends to take near-term enforcement action against egregious violators who the agency believes are structuring their shipments to evade duty and entry requirements," said the agency. "Longer-term, egregious and/or repeat violators may lose their Section 321 privileges and may be required to file formal entry on subsequent shipments."
Going forward, "in order for the owner or purchaser to qualify as the 'person' under Section 321, importers will be required to provide the first and last name of the owner or purchaser, or the name of the business," CBP said. "Specifically, [Automated Manifest System] filers must provide in the 'consignee' field, the name of the owner or purchaser 'in care of' the address of the domestic warehouse or fulfillment center to which the shipment is destined. Similarly, [Automated Broker Interface] filers may provide in the 'ship to and/or 'buyer' fields, the name of the owner or purchaser 'in care of' the address of the domestic warehouse or fulfillment center to which the shipment is destined."
The ruling centered around informal Section 321 entries filed by Global Trade Solutions that listed a nonresident ultimate consignee for goods shipped to an Amazon Fulfillment Distribution Center (AFDC) for resale, CBP said. GTS initiated the discussion after a client's air cargo shipment was denied release by CBP in 2017 due to invalid consignee information. “GTS explains that the foreign shippers are nonresident importers who send the merchandise to themselves, in care of Amazon Fulfillment, to stock the merchandise at the warehouse for eventual sale via Amazon’s website,” CBP said.
GTS should not have listed the foreign shipper as the ultimate consignee, CBP said. The company “was required to provide air cargo manifest and [importer security filing] information, prior to the arrival of the shipment, including the consignee name and address,” CBP said. “Specifically, for GTS’s consolidated shipments, the identity of the container station, express consignment, or other carrier is sufficient for the consignee of the master air waybill record; however, for the individual shipments, the consignee name and address are required, for the party to whom the cargo will be delivered, regardless of the location of the party.” That means “for advance manifest and security purposes, the warehouse, i.e., the AFDC, is both the ultimate consignee and the consignee, as the name and address of the party to whom the cargo will be delivered is that of Amazon.”
Here, “the consignee and ultimate consignee is merely the proprietor of the U.S. premises where the shipments are delivered to,” CBP said. As a result, “CBP will not require the consignee or ultimate consignee to take on the responsibility of an importer if an actual owner or purchaser is properly identified for each shipment.” The agency must also “look at either the owner or purchaser of the shipment to determine” whether the imports exceed the Section 321 limit for an aggregate value of $800 per person per day. Without an owner or purchaser listed, “CBP will default to the consignee as the de minimis value qualifier,” it said.
CBP reviewed the GTS master airway bill information and noted that several foreign owners “made multiple shipments in excess of $800 on the same day,” it said. As a result, “the Port of Chicago was correct in its refusal to allow informal entry under Section 321 of those shipments,” it said. Also, some of the goods were subject to antidumping and countervailing duties, which means a formal entry is required, CBP said.