Type 86 Entry (Section 321 Low-Value)
/taɪp ˈeɪti sɪks ˈɛntri ˈsɛkʃən θriː ˈtwɛnti wʌn loʊ ˈvæljuː/
A Type 86 Entry is an electronic entry filing process in the Automated Commercial Environment (ACE) that allows eligible shipments valued at $800 or less to enter the United States duty and tax-free under Section 321 of the Tariff Act of 1930. This streamlined process is critical for high-volume, low-value e-commerce imports, offering significant cost and time efficiencies for importers.
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In Detail
The legal basis for Type 86 Entry is Section 321 of the Tariff Act of 1930 (19 U.S.C. § 1321), which permits certain articles not exceeding $800 in aggregate fair retail value to be imported free of duty and tax. This provision, often referred to as de minimis, is a critical component of U.S. trade policy, particularly with the growth of e-commerce. It explicitly excludes goods subject to quota, anti-dumping or countervailing duties (AD/CVD), or those requiring inspection by certain Partner Government Agencies (PGAs) that necessitate formal entry data.
Practically, a Type 86 Entry is a non-dutiable informal entry filed electronically in ACE. It requires specific data elements, including the Harmonized Tariff Schedule of the United States (HTSUS) classification, country of origin, and manifest information, though it does not trigger the extensive data requirements of a formal entry. This process significantly reduces the administrative burden and costs associated with importing small, low-value parcels, facilitating rapid clearance for a vast volume of direct-to-consumer shipments.
A common misconception or error involves applying the $800 de minimis limit incorrectly. The threshold applies to the aggregate fair retail value of articles imported by one person on one day, not per shipment if multiple shipments arrive for the same person on the same day. Importers must also be vigilant to ensure that goods are not split across multiple shipments to circumvent the limit or that ineligible goods are not filed under Type 86, which can lead to penalties and delays.
While Type 86 entries are exempt from duties and taxes, proper HTSUS classification is still required. The classification determines eligibility and provides essential data for trade statistics and enforcement. Incorrect classification, even for duty-free goods, can lead to compliance issues if the item was ineligible for Section 321 treatment, or if the data is inaccurate for other regulatory purposes.
Classification Significance
Misinterpreting the eligibility criteria for a Type 86 Entry, such as the $800 value limit or product exclusions, can lead to severe audit exposure and penalties. Incorrectly classifying goods or attempting to use Type 86 for ineligible items can result in liquidated damages, seizure of merchandise, and the loss of expedited clearance privileges. Furthermore, consistent inaccuracies can flag an importer for increased scrutiny by U.S. Customs and Border Protection (CBP), impacting future import operations and competitive standing.
How Kanon Handles This
Kanon's AI-powered HTSUS classification engine deterministically classifies products, ensuring that even goods destined for Type 86 entry receive the correct HTSUS code and full legal reasoning. For eligible low-value shipments, Kanon identifies Type 86 applicability and provides the necessary classification for accurate ACE filing. This prevents errors that could lead to non-compliance, ensuring importers can confidently leverage Section 321 without risking penalties or delays.
FAQ
What is the value limit for a Type 86 Entry?
The value limit is $800 de minimis, meaning the aggregate fair retail value of articles imported by one person on one day must not exceed this amount. This applies to the value of the goods, excluding shipping and insurance.
Can all products be imported via Type 86 Entry?
No, certain products are ineligible, including those subject to quota restrictions, anti-dumping/countervailing duties (AD/CVD), or those regulated by specific Partner Government Agencies (PGAs) that require formal entry data elements, such as FDA-regulated goods requiring prior notice or DOT-regulated vehicles.
Frequently Asked Questions
What is the value limit for a Type 86 Entry?
The value limit is $800 de minimis, meaning the aggregate fair retail value of articles imported by one person on one day must not exceed this amount. This applies to the value of the goods, excluding shipping and insurance.
Can all products be imported via Type 86 Entry?
No, certain products are ineligible, including those subject to quota restrictions, anti-dumping/countervailing duties (AD/CVD), or those regulated by specific Partner Government Agencies (PGAs) that require formal entry data elements, such as FDA-regulated goods requiring prior notice or DOT-regulated vehicles.