For importers, an understanding of the different types of U.S. shipments is required to make trade processing as smooth as possible. Whether the merchandise is for personal use or resale, the shipment type and other information must be submitted to U.S. Customs and Border Protection (CBP) for risk assessment.
Personal Types of U.S. Shipments
A personal shipment is an informal U.S. shipment type for non-commercial articles intended for private use being transported by a highway carrier. The goods must not belong to a business, be for sale or be brand new. The personal shipment type is often used by people moving from Canada into the U.S. with their belongings.
Highway carriers transporting personal items must report the shipment in the ACE eManifest. The carrier must choose the “Personal Shipment” for the shipment type when creating a report. The carrier must also provide a unique Shipment Control Number (SCN) and other required elements such as shipper, consignee, and commodity data. At the border, the driver must present Form 3299 to the officer showing a complete inventory of goods.
Section 321 is a U.S. shipment type that applies to imported goods valued at $800 or less. To qualify as Section 321, the shipment must not exceed $800 in value and must not be one of several lots in a single order. Section 321 shipments are duty and tax free.
When creating the eManifest, the carrier must provide a unique SCN and the required information about the shipper, consignee, and commodity. The value and country of origin must also be declared.
Free of Duty
Free of Duty is a release option for U.S. shipments not exceeding $2,000 in value. Merchandise that may also be eligible for duty free entry includes:
Personal and Household Items – Personal items are those owned by a person or family abroad that are being moved into the U.S. These items are intended for personal use only and not for sale or commercial purposes.
Section 321 – Section 321 shipments are goods valued at $800 or less.
Vehicles – Subject to limitations (2-3 new or used cars over a 3-year period), automobiles to be used for personnel assigned to embassies and consulates are free of duty. Imported vehicles that do not conform to U.S. safety and emissions standards cannot be sold unless they are brought into compliance.
Consumables – Consumables including alcoholic beverages for personal use or for entertainment purposes of an official diplomatic mission may enter free of duty.
Baggage and Effects of International Organization Staff Personnel – Baggage and effects, including motor vehicles, of employees of international organizations can enter the U.S. free of duty and taxes.
Commercial U.S. Shipments
The Pre-Arrival Processing System (PAPS) shipment type is the default for goods entering the U.S. by truck. All commercial goods transported by highway carriers must clear under PAPS unless the goods qualify for another U.S. shipment type. PAPS aims to accelerate the release of commercial goods while still undergoing risk assessment processing.
Each PAPS shipment is assigned a unique PAPS number, a type of SCN that begins with the carrier’s Standard Carrier Alpha Code (SCAC)
followed by alphanumeric characters. Because PAPS numbers cannot be reused for at least three years, carriers often print PAPS stickers in sequence to avoid accidental reuse.
After the carrier assigns a PAPS number to the shipment, the carrier transmits the information to the customs broker, who prepares the formal entry for release. The carrier then prepares an ACE eManifest with the same PAPS number. The PAPS number is the common element between the broker’s formal entry and the carrier’s eManifest.
To report a PAPS shipment in the ACE eManifest, the carrier should select “PAPS” as the shipment type. The carrier must enter the same PAPS number used by the broker to avoid delays or denial of entry.
The In-Bond shipment type allows cargo to move to an inland U.S. port for release or to transit the U.S. en route to another country. Only bonded carriers are allowed to transport In Bond shipments. In bond shipments require an ACE eManifest that is prepared either by the customs broker (QP In Bond) or the carrier (ACE In-Bond).
QP In Bond filing is the most common method. The broker creates a PAPS shipment in ACE with the same SCN the broker used for the bond. ACE In-Bond filing is created when the carrier reports the shipment in ACE.
Formal Entry for U.S. Shipments
In addition to the ACE eManifest, commercial goods and goods valued at more than $2,500 require a formal entry.
How to File a Formal Entry (Self-Filing Importers)?
1. Identify the port of entry or the port where the shipment will enter the U.S. Call the port and speak to the Commodity Specialist Team (CST) that handles the type of shipment you are importing. Have the commercial invoice with you when you call.
2. Ask the CST for the tariff classification number for each product you are importing, the duty rate for each tariff number, and the unit of measure for each tariff number.
3. Ask for special requirements or forms that apply to the goods being imported. These include licenses or permits from the Food and Drug Administration (FDA), Environmental Protection Agency (EPA) and other agencies, whether the goods are restricted/under quota, and whether the goods qualify for tariff programs such as the North American Free Trade Agreement (NAFTA).
4. Ask what type of customs bond you need for the merchandise and the limit of liability required to get the customs bond.
5. Fill out CBP forms 5106 (Importer Number request or notification), 7501 (Entry Summary) and the Release Document at least a week before the goods arrive or no later than 10 days after arrival for certain shipments.
6. Buy a customs bond or post cash. Bring the bond and completed documents to the CBP port or entry branch and have the entry specialist review them.
7. Submit all documentation (including required permits, special forms, invoices, packing list) and check or cash for duties and fees. Note that the invoice must be in English and must show tariff classifications and duty rate that match the information on Form 7501.
8. After submitting the documents, CBP will inform you how long processing will take (usually 8 hours). Once approved, pick up the documents and bring them to the CBP office closest to where the shipment is being held. Again, processing usually takes 8 hours.
9. The release document will be signed by the customs officer authorizing release OR stamped for further examination. Goods that require examination must be taken to the inspection site before release.
It is the responsibility of the carrier to inform you when the goods will arrive;
the U.S. Shipments that are not picked up within 15 days of arrival will be sent to a warehouse, where storage fees apply. After six months in the warehouse, the goods may be auctioned for sale.
Filing formal entries for U.S. shipments can be complicated, and many importers rely on the services of a customs broker. Customs brokers handle all the paperwork associated with imports. You may need a broker if you import large volumes of commercial goods on a regular basis.
You may also want to partner with a CBP-approved service provider like Global eTrade Services (GeTS) to make high-volume ACE eManifest and Automated Broker Interface (ABI) filing easier. GeTS offers comprehensive trade facilitation solutions for importers, carriers, customs brokers, freight forwarders and other trade participants. Visit our website to learn more.