CBP 'Not There Yet' on Deciding Identifier for Section 321 Goods, DHS Official Says

CBP and other agencies involved in trade still have some ways to go before resolving an ongoing debate on how to describe goods in Section 321 shipments, said Christa Brzozowski, deputy assistant secretary for trade and transport at the Department of Homeland Security, at the U.S. Air Cargo Industry Affairs Summit Sept. 6 in Washington. The government still needs to work through process issues related to what goods are eligible for expedited release, and what role partner government agencies (PGAs) will have in the process, before considering whether to require 10-digit Harmonized Tariff Schedule numbers or written descriptors, she said.

“We’re not there yet,” Brzozowski said. The PGAs have been going through a “long and arduous process” to decide what data they need, and CBP needs to “ensure that the targeting system of the PGA message set is utilized,” she said, adding that she’s “not sure” whether the solution will be an HTS number, a description “and/or some other way.” Divisions over how to describe goods in Section 321 shipments most recently surfaced at the most recent meeting of the Commercial Customs Operations Advisory Committee (COAC) (see 1708230042).

Among the issues that need to be resolved for PGA Section 321 shipments are whether they will be fully subject to ACE targeting or eligible for “releasing upstream,” and “who is involved in that process of releasing it upstream,” Brzozowski said. “How do we make sure” that data PGAs have identified as necessary “is getting to them on those shipments that fall within their mission set? I think we’ve got a lot of work to do,” she said. “If it is getting released upstream,” the government needs to ensure that “we’re confident in the process by which that’s being done and the ability to validate that periodically.”

Requiring 10-digit HTS numbers is a “very bad idea,” said Michael Mullen, executive director of the Express Association of America, echoing comments he made at the COAC meeting. HTS numbers were developed as a way to determine the tariff on a product, and “that’s all it’s designed for,” he said. The express industry uses a “sophisticated algorithm” based on an analysis of the description of the goods, the sender, the recipient and the origin of the shipment. “Throwing the HTS on top of that has no value from an admissibility point of view,” which is why the Fish and Wildlife Service has said it doesn’t want it, Mullen said. “They’re going to be inundated with products in which they have no regulatory interest.”

“Nothing has really changed” with the increase in the de minimis level from $200 to $800, Mullen said. “We’ve had the $200 de minimis for how many decades, we’ve been routing packages to PGAs for their review for those decades. Where’s the evidence that this system isn’t working? What catastrophe has been caused by this system not working correctly? It’s working,” he said.

Differing opinions over whether to require an HTS or a descriptor can “vary [by] where you are in the supply chain,” Brzozowski said. While the express industry has developed a “pretty robust way of identifying what is or is not subject to different [PGA requirements], others in the supply chain might not have the capability yet, if ever,” she said.

One thing that is driving the newfound skepticism by PGAs on de minimis shipments is their increased visibility from new automated systems, Brzozowski said. Agencies just now understand that “this is being released upstream” prior to the PGA “actually seeing it,” she said. “I think that realization has hit a lot of other government agencies.” Section 321 release was something that CBP was “very used to and comfortable with,” she said. “But other government agencies are going to take a little bit longer to get used to it and understand how it’s going to impact their processes.”