By: Bruce H. Leeds, Senior Counsel

In April of this year, the President signed the Trade Facilitation & Trade Enforcement Act of 2015. One of the provisions in this legislation reworded HTS 9801.00.10 to add the language “or any other products when returned within 3 years after having been exported.”  This addition meant that goods of non-U.S., or foreign origin, could potentially qualify for duty free treatment under this classification.

Although a significant change to the provision, Part 10 of the Customs Regulations and the subchapter notes to Chapter 98 have not been updated to describe how to comply with the change. This has caused some importers and brokers to wonder exactly what is required to qualify under the revised 9801.00.10.

U.S. Customs & Border Protection (CBP) published ruling HQ H276787 on Aug. 17, 2016 which provided guidance on requirements for the revised HTS 9801.00.10. The requester of the ruling asked what documentation was required to support entry under the revised 9801.00.10.

In the ruling, CBP first stated that the 3-year limitation did not apply if the returned goods were claimed to be made in the U.S. That 3-year period only applied if the returned goods were not made in the U.S.

The requester asked whether a manufacturer’s affidavit would be required for goods returned to the U.S. within 3 years. CBP responded that a manufacturer’s affidavit attesting to the U.S. origin of the good is no longer required if the good is returned to the United States within 3 years.  The ruling went on to state that portions of Part 10.1 remain valid.  These include a requirement for a Foreign Shipper’s Declaration giving the port and date of export from the U.S. and stating that the goods were not advanced in value, or improved in condition by any means.  Also required is an Importer’s Declaration stating that the Foreign Shipper’s Declaration is true, and that the goods being returned were not made or produced in the U.S. using a Temporary Import Bond for manufacturing under 9813.00.50 nor exported with benefit of drawback.  If claimed to be goods of any origin returned within 3 years, the importer may need to provide an export invoice and bill of lading or air waybill evidencing export and/or the reason for export from the U.S.

The answer to the requester’s question of whether a copy of the Electronic Export Information with the ITN number filed in the Automated Export System or a foreign customs entry could show export within 3 years, CBP stated these could be used, but that the port director (or Center of Excellence and Expertise) could require additional documentation or evidence.

Although not mentioned in the ruling, we note that Part 10.1 states that “if the port director is reasonably satisfied, because of the nature of the articles, or production of other evidence, that the articles are imported in circumstances meeting the requirements of subheading 9801.00.10”, he/she may waive the requirements for a Foreign Shipper’s Declaration and Importer’s Declaration.

The ruling clarifies the requirements for the revised HTS 9801.00.10 as follows:

1. If claiming entry under 9801.00.10 based on the goods being a product of the U.S., the previous requirements for a Foreign Shipper’s Declaration and Importer’s Declaration still apply, and the importer may need to submit further proof of U.S. origin, such as a manufacturer’s affidavit. The 3-year time limitation will not apply to returned goods made in the U.S.
2. A manufacturer’s affidavit is not required for goods returned within 3 years; however, the importer will need to provide other documentation as explained below.
3. If entered under 9801.00.10 based on being exported within the 3-year limitation, the returned goods do not need be of U.S. origin. The importer must still provide:
   • A Foreign Shipper’s Declaration giving the date and port of export from the U.S. and stating that the goods were not advanced in value or improved in condition while out of the U.S.
   • An Importer’s Declaration stating that the Foreign Shipper’s Declaration is true and that the returned goods were not manufactured in the U.S. under a TIB, nor exported with benefit of drawback.
   • An export bill of lading, or air waybill and an export invoice, and possibly other documentation indicating when the goods were exported and the reason for export. A copy of the Electronic Export Information with ITN number and a foreign customs entry may be useful, but may not be fully acceptable by themselves.
   • The port director or CEE may waive the Foreign Shipper and Importer Declarations if satisfied by other evidence that the goods qualify for entry under 9801.00.10. That evidence could consist of some of the documentation described above.

The scope of 9801.00.10 has been greatly expanded, but the documentary requirements have not been reduced. In entering goods under 9801.00.10, remember the Prime Directive that “if you can’t prove it, don’t claim it.”  Also consider whether what is being saved justifies the effort to obtain the documentation to show that the returned goods qualify for entry under 9801.00.10 – or whether is it better to enter them under the Chapter 1-97 classification and simply pay the duty and MPF.