Section 321 is a U.S. customs provision that allows low-value shipments, valued at $800 or less, to enter the country duty-free and without formal customs entry. This rule was designed to simplify the import process and reduce costs for both businesses and consumers by exempting small shipments from taxes and lengthy inspections. However, starting August 29, 2025, this de minimis exemption has been suspended globally, meaning all low-value imports now require formal entry and may be subject to duties.
This change expands restrictions that were initially applied only to imports from China and Hong Kong. It impacts ecommerce businesses and cross-border retail by adding new compliance requirements, tariffs, and potential delays for shipments from all countries, including Canada, the EU, and Mexico. Understanding these updates is crucial for anyone involved in international shipping or online retail.
The suspension of Section 321 shifts the landscape of duty-free imports and forces sellers and buyers to adapt quickly. Knowing how this affects shipping strategies, costs, and customs processes can help businesses avoid unexpected expenses and maintain smooth operations.
Understanding Section 321
Section 321 allows certain low-value shipments to enter the U.S. without paying duties or taxes. It sets specific criteria and conditions that simplify customs processes.
Legal Definition and Scope
Section 321 is part of the Tariff Act of 1930, which permits the duty-free importation of goods valued at $800 or less. This provision applies to individual shipments, meaning each package must meet the de minimis threshold to qualify.
The law addresses both value and shipment type. It excludes shipments requiring formal entry under other customs rules, such as those subject to quota or restricted goods regulations. The section allows informal clearance, reducing paperwork and processing time.
This scope specifically benefits e-commerce businesses and small importers who send frequent, low-value shipments into the U.S.
Purpose and Importance
Section 321 aims to reduce the administrative burden on customs by streamlining the clearance process for low-value imports. It supports faster delivery and lowers costs for businesses importing small shipments.
The duty exemption encourages cross-border trade, making it easier for international sellers—especially from Canada—to reach U.S. consumers. It avoids unnecessary delays and taxes on affordable consumer goods.
Its importance lies in fostering more efficient trade, supporting small businesses, and reducing friction in cross-border e-commerce.
Key Provisions
- De minimis value threshold: Shipments must be worth $800 or less.
- Duty and tax exemption: Eligible shipments enter free of customs duties and taxes.
- Informal clearance process: Simplified customs paperwork with no formal entry required.
- Shipment restrictions: Excludes goods subject to quotas, permits, or import restrictions.
- Individual shipment basis: Each package is assessed independently for eligibility.
These provisions ensure Section 321 benefits primarily smaller, low-value shipments, speeding up customs clearance and minimizing operational costs.
Compliance and Practical Considerations
Section 321 offers benefits such as duty-free entry for low-value shipments, but it requires careful adherence to specific rules. Shippers must ensure accurate data, proper documentation, and awareness of product eligibility to avoid complications.
Regulatory Requirements
Section 321 applies to U.S.-bound shipments valued at $800 or less, excluding goods originating from China and certain restricted items like alcohol, tobacco, and some electronics. Shipments must comply with customs regulations, including correct classification and valuation.
Shippers must use correct consignee EINs and maintain digital records of each shipment. Compliance with daily shipment value limits per consignee is mandatory to prevent disqualification. The Automated Commercial Environment (ACE) system is often used to submit required data, increasing transparency and tracking accuracy.
Failure to meet these regulatory requirements can result in shipments being delayed or denied entry.
Penalties and Consequences
Non-compliance with Section 321 regulations can lead to penalties such as shipment holds, increased inspections, or fines. Inaccurate or incomplete data submission may cause customs delays or even rejection of the shipment.
Violations can also result in the loss of Section 321 eligibility, forcing shipments to undergo full duty payments and standard clearance procedures. This increases import costs and complicates supply chain logistics.
Maintaining proper documentation and adherence to customs rules reduces the risk of penalties and ensures smooth entry under the Section 321 exemption.
Best Practices
Accurate and timely data submission is critical to maximize Section 321 benefits. Companies should implement digital tracking systems to log shipment values and consignee information in real time.
Regular audits and recordkeeping help ensure compliance and prevent errors. It’s essential to verify product eligibility before shipment and stay updated on regulatory changes, especially given recent suspensions or modifications.
Collaboration between warehousing, compliance, and transportation teams creates a unified fulfillment process to maintain efficiency and avoid regulatory pitfalls.
| Best Practices Checklist |
| Verify product eligibility |
| Use correct EINs and documentation |
| Maintain accurate digital logs |
| Conduct routine audits |
| Monitor regulatory updates |