H290219

90 K Street N.E., Washington, DC 20229 U.S. Customs and Border Protection HQ H290219 July 28, 2020 ENT 6-01 H290219 SMS OT:RR:CTF:ER Mr. James Swanson Director, Cargo Security and Controls Cargo and Conveyance Security U.S. Customs and Border Protection Office of Field Operations Washington D.C. 20229 RE: Request for Internal Advice; Duty-Free Informal Entry of Shipments for Consignment and Resale, under 19 U.S.C. §1321(a)(2)(C). Dear Mr. Swanson: This is in response to your internal advice request, dated September 14, 2017, on behalf of Global Trade Solutions (“GTS”), regarding shipments made under Section 321, listing a nonresident ultimate consignee, and shipped to an Amazon Fulfillment Distribution Center (“AFDC”), for resale. We have also taken into account a ruling request submitted by GTS, dated September 11, 2017, and follow-up correspondence. FACTS: GTS is a customhouse broker which, among other things, files informal entries under 19 U.S.C. § 1321 for its clients. GTS explains that some clients import merchandise under the Section 321 administrative exemption and store the merchandise at a warehouse operated by an online fulfillment service provider, such as Amazon, eBay, or Shopify. Eventually, the merchandise is sold to a consumer in the United States, who purchases the merchandise via the online fulfillment provider website. On August 16, 2017, U.S. Customs and Border Protection (“CBP”) Port Officials at Chicago O’Hare International Airport (“ORD”), denied release of such an air cargo shipment of merchandise, consolidated under a Master Air Waybill (“MAWB”). The Port refused release of the goods because, it asserts that: 1) all consignee addresses are invalid, as individual addresses are required; and 2) the foreign shipper and the ultimate consignee cannot be the same, as the ultimate consignee is required to reside in the United States. GTS asserts that all of the House Air Waybills (“HAWB”), consolidated under the MAWBs, and used to identify the de minimis shipments, are valued less than $800, are not covered by a single order or contract being forwarded in separate lots, and are therefore, eligible for Section 321 cargo release. 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. There is no sale in the United States upon importation. GTS further explains that the online fulfillment service provider acts as an online consignment store and does not take title to the merchandise. Additionally, on November 7, 2017, in support of its ruling request, GTS provided spreadsheets of all of the informal entries consolidated under HAWBs that arrived at the Los Angeles International Airport (“LAX”) in 2017. While GTS submitted numerous entries, all of the HAWBs used to identify each shipment consistently used a nonresident name consigned to the care of Amazon; therefore, we will only focus on the following MAWBs in our analysis: MAWB numbers xxx-xxx87641 and xxx-xxx16580, which arrived in LAX on June 29, 2017, contained 222 shipments. Each individual HAWB was “shipped to” an entity having a different foreign name and address, in the care of several different Amazon locations. There were several repeat consignee names, which received multiple shipments, none of which totaled in excess of $800. However, there was the inclusion of merchandise, such as heat sinks, that are potentially subject to antidumping and countervailing duties, and are precluded from duty-free, informal entry. MAWB number xxxxxx56144, entered on August 16, 2017, comprised of 155 HAWBs. A review of the MAWB, which arrived into ORD, demonstrates that all 155 shipments were ultimately consigned to the care of Amazon in Illinois, under different nonresident shipper names. Each individual shipment was shipped by and consigned to a nonresident, under the same name. There were several repeat consignees who made multiple shipments in excess of $800 on the same day: Shipment Arrival Date Foreign Shipper Name Consignee Name c/o Amazon Listed Value of Merchandise  August 12, 2017 HJK HJK $799  August 12, 2017 HJK HJK $204     $1003  August 12, 2017 IHP IHP $780  August 12, 2017 IHP IHP $329     $1109  August 12, 2017 JMG JMG $780  August 12, 2017 JMG JMG $441     $ 1221  August 12, 2017 JHL JHL $780  August 12, 2017 JHL JHL $438     $ 1218  August 12, 2017 JHY JHY $780  August 12, 2017 JHY JHY $590     $1370  ISSUE: Whether importations made by a nonresident importer, in one day, and sent to a U.S. fulfillment facility, may qualify for informal duty-free entry, under 19 U.S.C. § 1321(a)(2)(c). LAW AND ANALYSIS: Section 321(a)(2)(C) of the Tariff Act of 1930, as amended, (19 U.S.C. § 1321(a)(2)(C)), provides for the duty-free entry of articles valued at $800 or less that are imported by one person on one day. The purpose of this provision is to minimize expense and inconvenience to the government disproportionate to the revenue that is collected. However, Section 321’s benefit does not represent an absolute right for the trade community. Specifically, 19 U.S.C. § 1321 provides for the admission: 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 an amount specified by the Secretary by regulation . . . (C) $ 800 in any other case. 19 U.S.C. § 1321(a)(2)(C). As discussed below, analysis of the issue presented requires CBP to determine: a) what constitutes a “shipment” for purposes of Section 321, and b) which entity’s values should be aggregated to decide whether the $800 cap has been exceeded. We address each element below. We further note that, our decision for purposes of Section 321, is informed by the question of who has the right to make entry, which can be a different question from what data elements CBP needs for import security purposes. In discussing Section 321 shipments, Customs in its Interim Rule, Treasury Decision (“T.D.”) 94-51, dated June 13, 1994, states in pertinent part, that: If the document used to file or support entry is an individual bill of lading to the ultimate consignee in the United States, the monetary limitation is applied on the basis of the value of the shipment on the individual bill of lading. . . On the other hand, if the document used to file or support entry is a master bill of lading (as opposed to each individual bill of lading), the monetary limitation is applied on the basis of the total value of the shipments on the master bill of lading. The same is true of the application of the monetary limitation in § 321(a)(2) for other importations (i.e., those not involving an express consignment entity). This is so because the definition of “shipment” is for general purposes in chapter I of title 19 of the CFR, unless the context of the term requires a different meaning (see 19 CFR 101.1). 59 Fed. Reg. 30,289 at 30,291 (June 13, 1994). The regulation issued pursuant to 19 U.S.C. § 1321(a)(2)(C) is 19 C.F.R. § 10.151, which provides, Subject to the conditions in § 10.153 of this part, the port director shall pass free of duty and tax any shipment of merchandise, as defined in § 101.1 of this chapter, imported by one person on one day having a fair retail value, as evidenced by, an oral declaration, or the bill of lading (or other document filed as the entry) or manifest listing each bill of lading, in the country of shipment not exceeding $ 800, unless he has reason to believe that the shipment is one of several lots covered by a single order or contract and that it was sent separately for the express purpose of securing free entry therefor or of avoiding compliance with any pertinent law or regulation. Merchandise subject to this exemp

Section 321(a)(2)(C) of the Tariff Act of 1930, as amended, (19 U.S.C. § 1321(a)(2)(C)), provides for the duty-free entry of articles valued at $800 or less that are imported by one person on one day. The purpose of this provision is to minimize expense and inconvenience to the government disproportionate to the revenue that is collected. However, Section 321’s benefit does not represent an absolute right for the trade community. Specifically, 19 U.S.C. § 1321 provides for the admission: 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 an amount specified by the Secretary by regulation . . . (C) $ 800 in any other case.19 U.S.C. § 1321(a)(2)(C). As discussed below, analysis of the issue presented requires CBP to determine: a) what constitutes a “shipment” for purposes of Section 321, and b) which entity’s values should be aggregated to decide whether the $800 cap has been exceeded. We address each element below. We further note that, our decision for purposes of Section 321, is informed by the question of who has the right to make entry, which can be a different question from what data elements CBP needs for import security purposes. In discussing Section 321 shipments, Customs in its Interim Rule, Treasury Decision (“T.D.”) 94-51, dated June 13, 1994, states in pertinent part, that:If the document used to file or support entry is an individual bill of lading to the ultimate consignee in the United States, the monetary limitation is applied on the basis of the value of the shipment on the individual bill of lading. . . On the other hand, if the document used to file or support entry is a master bill of lading (as opposed to each individual bill of lading), the monetary limitation is applied on the basis of the total value of the shipments on the master bill of lading. The same is true o