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Changes to Duty Free Provisions for Articles Exported and Returned, Advanced or Improved Abroad

Home Resources Changes to Duty Free Provisions for Articles Exported and Returned, Advanced or Improved Abroad

Part of the Trade Facilitation and Trade Enforcement Act of 2015 signed into law on February 24, 2016 by President Obama includes a provision to change the regulations in regards to articles exported and returned, repaired or advanced in value or condition under heading 9802.  These regulations will be effective April 25, 2016.  Specifics in regards to Customs & Border Protection (CBP) procedures and required supporting documentation are not available at this time.   Any guidance from CBP will be shared as it is received.

Title IX Section 904 states that 60 days from after the date of the enactment of this Act the following modification of provisions relating to returned property will become effective:

  • U.S. Note 3 to subchapter II of chapter 98 of the Harmonized Tariff Schedule of the United States is amended by adding at the end the following: For purposes of subheadings 9802.00.40 and 9802.00.50, fungible articles exported from the United States for the purposes described in such subheadings (A) may be commingled; and (B) the origin, value, and classification of such articles may be accounted for using an inventory management method.
  • (2) If a person chooses to use an inventory management method under this paragraph with respect to fungible articles, the person shall use the same inventory management method for any other articles with respect to which the person claims fungibility under this paragraph.
  • (3) For the purposes of this paragraph (A) the term ‘fungible articles’ means merchandise or articles that, for commercial purposes, are identical or interchangeable in all situations; and (B) the term ‘inventory management method’ means any method for managing inventory that is based on generally accepted accounting principles.”.

This allows for modernizing existing inventory management rules by subtracting the value of U.S. components assembled into the final product that will be entered into U.S. commerce for articles exported and returned after being improved abroad (HTS 9802).
Additional guidance should be forthcoming from CBP in terms or entry procedure and required documentation and will be distributed when available.

You can view highlights of the Trade Facilitation and Trade Enforcement Act of 2015 here.

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