Free of Duty (CBP Shipment Type)
A Free of Duty Shipment, known for its corresponding form, CBP Form 7523, is a U.S. Shipment Type for goods to clear through US Customs and Border Protection. It is a type of Informal Entry that allows for the release at the border of shipments consisting of merchandise that is unconditionally or conditionally duty free and not exceeding 2500 USD in value.
To qualify as a Free of Duty Shipment, the goods must not exceed 2500 USD in value and must be either unconditionally duty free and not subject to any quota or internal revenue tax, or conditionally duty free with all conditions met at the time of entry. Because the carrier would not normally be in a position to make these determinations it is important that the carrier rely on the importer or their customs broker to advise if Free of Duty should be the shipment type.
Declaring a Free of Duty Shipment in ACE Manifest
Free of Duty Shipments are currently exempt from ACE eManifest filing requirements, but carriers may elect to submit ACE information for them for the benefit of their records and for faster border processing times. To report a Free of Duty Shipment the carrier will need to create an ACE Shipment with the Shipment Type "Free of Duty" (may also be called "CBP Form 7523" depending on software being used), and ensure that the shipment is transmitted on their ACE eManifest. The example below shows how to report Free of Duty shipments using BorderConnect's ACE eManifest software.
Although a Free of Duty Shipment is different from a PAPS shipment, the carrier will still need to provide a unique Shipment Control Number, as well as all other information normally required for an ACE Shipment including Shipper, Consignee and Commodity information.
As with all Informal Entries, no Customs Broker should be involved and the carrier will not receive an Entry Number for the shipment. At the border, the driver must present a completed Customs Form 7523 in duplicate to the officer.
- Automated Commercial Environment Review of Shipment Release Types: Trucks http://www.cbp.gov/linkhandler/cgov/trade/automated/modernization/ace/toolkit/shipment_types.ctt/shipment_types.pdf
- 19 CFR 143.23 http://cfr.vlex.com/vid/143-23-form-entry-19651148