Claiming US Goods Returned (9801) – Is it worth the risk?

American manufacturers, importers, and other entities are often encouraged to take advantage of the Customs “US Goods Returned” program, also known as 9801 for the HTS heading that is used to claim the duty relief.  What many do not realize is the heavy burden of proof that is required by customs and the potential exposure to penalties, fines, and customs audits. Chapter 98 is Special Classification Provisions, and includes the reduced or eliminated duty entry when returning US manufactured items, returns of trade show materials, return of rejected goods from foreign receivers, and returns of goods following a lease agreement.

Specific Requirements

Unless waived by a Port Director to compliantly receive the benefits of a 9801 “US Goods Return” duty claim, a US importer must maintain the following documents:

• A manufacturer’s affidavit stating this good was made in the US
• A declaration from the foreign shipper  stating that the good was not improved or repaired abroad

Additionally importers must verify that the 9801 claim on a good is not prohibited. In order to determine if a claim is prohibited, the following conditions must be examined and rejected:

• Drawback was claimed on the articles
• The good was manufactured in a Foreign Trade Zone
• The good was exported from a bonded warehouse
• The good entered under a Temporary Importation Bond
• The good is subject to IRS tax

Best Practices

Aside from the specific requirements advised by customs, it is also in the importers best interest to establish control points in their compliance policy regarding 9801 claims. These best practices should be considered:

• Importers should take care to outline standard operating procedures with the import broker to ensure that notification and acknowledgement are given by the importer at the time of entry.  
• All employees responsible for communicating import instructions should be trained on the corporate 9801 controls as well as 9801 customs regulations.
• Recordkeeping requirements should be put into place to ensure that all documents required to be kept for 9801 claims are being maintained.

Allyn Advantage

Allyn has 25 years of trade compliance experience and employs eight licensed customs brokers skilled in operations management and cost savings initiatives. Allyn can assist in determining 9801 savings for your company and advise if it will be worthwhile to claim duty free eligibility under this heading.  To learn more please contact us at sales@allynintl.com.

Allyn Contributor: Daniel Hernandez, LCB