Entry of shipments for retail use with a value of less than $800 under 19 U.S.C. §1321(a)(2)(C).

HQ H275530 July 19, 2017 ENT 6-01 H275530 SMS OT:RR:CTF:ER James E. King Delmar International, Inc. 5 Coton Lane Champlain, NY 12919 RE: Entry of shipments for retail use with a value of less than $800 under 19 U.S.C. §1321(a)(2)(C). Dear Mr. King: This is in response to your request for a ruling, dated August 11, 2016, on behalf of Arkel Inc. (“Arkel”). Your request is regarding the eligibility of informal entry of certain foreign origin merchandise shipped to United States resellers, to be stocked and sold to end-users in retail stores. We apologize for the delay in responding. FACTS: Arkel is a shipper of bicycle products. The merchandise Arkel ships includes bicycle racks, bicycle bags, also known as panniers, and pannier rain covers, manufactured in Canada and/or imported from Asia. The products are shipped directly from Quebec, Canada to bicycle shops in the United States. The bicycle shops buy Arkel’s products, stock them in retail stores, and sell them to their end-user customers. Arkel is proposing that its merchandise, not to exceed $800 and shipped to U.S. retail resellers, qualify for informal entry procedures, duty free, under Section 321 of the Tariff Act of 1930, as amended (19 U.S.C. § 1321(a)(2)(C)). ISSUE: Whether informal, duty free, entry of merchandise shipped to the United States and resold in retail stores, is permitted 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, which 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. See 59 Fed. Reg. 30,289 (June 13, 1994). The U.S. Customs and Border Protection (“CBP”) regulation promulgated under 19 C.F.R. §10.151, provides that importations, made by one person on one day, valued at not over $800, may be entered under informal entry procedures free of duty and tax, unless there is 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 or for avoiding compliance with any pertinent law or regulation. Id. Consolidated shipments addressed to one consignee shall be treated for purposes of Section 10.151 as one importation. See 19 C.F.R. § 10.153(d). A “shipment” for purpose of Section 321 means the merchandise described on the bill of lading or other document used to file or support entry. 19 C.F.R. § 101.1. In HQ 114562, dated January 7, 1999, sales agents conducted home parties in the U.S. and took cosmetic catalog orders, which were later shipped from Montreal, Canada directly to the sales agent, who then distributed the merchandise to the ultimate purchaser. CBP found that because the packages would be addressed to the sales agent, who would take care of the entry formalities before delivering the individual orders to the purchasers, the transactions were commercial in nature, and not personal. We further determined that while commercial shipments may be entered under Section 321, the $200 per day limit would apply to the sales agent and not the individual purchasers. CBP found: (In contrast, the $200 per day value limit would apply to each individual purchaser if the parcels were sent directly from Canada to the individual purchasers.) This means that Section 321 may not be used if the aggregate value of the parcels received by a sales agent on a given day exceeds $200. In that case, the parcels would have to be entered under regular mail informal or formal entry procedures, depending on their value. HQ 114562 (Jan. 7, 1999). As stated above, the amount under Section 321 has been increased to $800. Therefore, if the aggregate value of the parcels received by the bicycle shops, on a given day, does not exceed $800, the bicycle products may be entered duty free. HOLDING: Based on the above, we find Arkel’s proposed transaction eligible for informal entry and duty free treatment under 19 U.S.C. § 1321, 19 C.F.R. §§ 10.151 and 10.153. However, the transaction would be considered commercial in nature, and the $800 limit would apply to the bicycle retail shop and not the individual end purchaser. Please note that 19 C.F.R. §177.9(b) provides that”[e]ach ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by a Customs Service filed office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based.” Sincerely, Monika R. Brenner, Acting Chief Entry Process and Duty Refunds Branch