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Saving Duties On Goods Returned

Background

Items are being shipped all over the world every second of every day. That large amount of trade can get costly with tariffs, duty rates, and other shipping costs. With all that spending, there must be some ways to save money on those shipments. Well, if your items are made domestically in the U.S. or were exported from the U.S. in the last 3 years, we advise you take advantage of the duty-free entry claim known as 9801.

U.S. Customs and Border Protection recently announced an update to the regulations regarding the Goods Returned program under heading 9801 of the U.S. Harmonized Tariff Schedule. 

Claiming 9801 is a process used by many American manufacturers to save money on any products that need to be returned to the United States for any reason such as return, return for repair, or other cause. This is done by claiming Harmonized Tariff Schedule (HTS) 9801 as a secondary HTS classifying the shipment as U.S. Goods Return.

9801 For Non-U.S. Origin Goods

In 2016, the United States Trade Representative (USTR) made a change to how subheading 9801.00.10 is used. This change went into effect according to section 904(b) of the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA). Where previously only goods manufactured in the US were eligible for this duty-free opportunity, this change expanded the scope to include products of foreign manufacture that were exported from the U.S. within the last three years. 

The United States Trade Representative stated: “Products of the United States when returned after having been exported, or any other products when returned within 3 years after having been exported, without having been advanced in value or improved in condition by any process of manufacture or other means while abroad”.

This expansion of the subheading allows all products regardless of country of origin to be entered duty-free, as long as the goods were exported less than 3 years ago. There is no time limit for a U.S.-origin good to be eligible to use the 9801.00.10 provision.

Last week CBP announced a proposed regulatory change that will update 19 CFR 10.1 to align with the expansion of 9801 to include products of foreign origin as stated in TFTEA in 2016. 

What You’ll Need

In order to compliantly claim duty-free entry under 9801, the importer must have documentation to prove the import is eligible in accordance with 19 CFR 10.1. 

  • Item that either was manufactured in the U.S. or was exported from the U.S. in the last 3 years, and is now being re-imported.
  • If the shipment is valued under $2,500, you will only be required to provide proof the product was exported from the U.S.
  • Manufacturer’s Affidavit - this is a document provided by the manufacturer confirming that the item was manufactured in the United States (for goods of U.S. origin only).
  • Foreign Shippers’ Declaration - This is a document provided by the shipper declaring that the item was not repaired or altered in any way outside of the US
  • Importer’s Declaration – This is a signed statement from the Importer confirming that the information declared is accurate to the best of their knowledge and the .
  • Lastly you will need a bill of lading or an airway bill to prove that the items was exported from the US and is now being reimported

It’s important to perform due diligence before claiming duty-free import to ensure your imports are compliant with all regulations. For instance, products are not eligible for import under 9801 if duty drawback was claimed for those products at the time of export. 

At Allyn International, we provide many services in global trade with over 29 years of trade experience. Our global trade compliance team has saved our partners thousands of dollars per week in shipment costs through the use of 9801 claims. To learn more about the Allyn advantage please contact sales@allynintl.com.

Contributor: Heather Oskvarek and Joshua Tschuor


About Allyn International

Allyn International is dedicated to providing high quality, customer centric services and solutions for the global marketplace. Allyn's core products include transportation management, logistics sourcing, freight forwarding, supply chain consulting, tax management and global trade compliance. Allyn clients range from small local businesses to Fortune 500 firms. Allyn conducts business in more than 20 languages and has extensive experience in both developed and emerging markets. Highly trained experts are positioned throughout North and South America, Europe and Asia. Allyn’s regional headquarters are strategically located in Fort Myers, Florida, U.S.A., Shanghai, P.R. China, Prague, Czech Republic, and Dubai, U.A.E. For more information, visit www.allynintl.com.

 

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