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Changes Allow for Duty Free Return of Foreign Goods

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For years, U.S. buyers have found it difficult to return imported articles when products come in damaged or erroneously shipped. In the case of a return, importers have been required to pay additional duties and Merchandise Processing Fees (MPF) upon re-importation.

With that being said, there is good news for importers. Recent changes to U.S. tariff number 9801.00.10 allow for duty free return of foreign goods, according to the Trade Facilitation and Trade Enforcement Act of 2015 [1].

Conditions to Qualify

It is important to meet the following conditions to avoid paying duties a second time.

  • Goods must be returned within 3 years of initial export.
  • Duty drawback was not claimed on the original export.
  • The goods were not entered under bond or produced in a Foreign Trade Zone (FTZ).
  • The article was not advanced in value or improved in condition while abroad [2].
  • The U.S. importer has proper documentation to support the claim.

Support Documentation

U.S. Customs is in the process of defining the required documents more clearly for 9801.00.10. In the meantime, it is vital for importers to have these documents on hand at time of entry to support their claim. These documents include

  • A Foreign Shipper’s Declaration and U.S. Importer’s Declaration
  • Some form of proof to demonstrate that the goods have been returned within 3 years, such as

- Export invoices
- Export bill of ladings
- Electronic Export Information filings (EEI)

On the bright side, these documents are already required records for exporters, making the process easier.

By meeting these conditions and having the supporting documents, the change to this tariff provision will save importers significant duties and MPF for their returning goods.

For assistance with developing processes and procedures for returning goods, contact Mohawk Global Trade Advisors.


[1] “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.” Harmonized Tariff Schedule of the United States (2016).

[2] The article was not altered in any way that might have made it into a new product or might have improved it while overseas.

By Jim Trubits, Vice President.

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©2016 Mohawk Global Trade Advisors


Duty Savings Achieved with TIB

TIB Container

By Jim Trubits

Astute importers and exporters can benefit from the numerous duty avoidance, deferral, and recovery programs offered by U.S. Customs & Border Protection (CBP).

Temporary Importation Bonds (TIB) are a great way to avoid paying thousands of dollars in duty. Here’s how it works: Under certain conditions, goods are imported into the U.S.—for a limited time—duty free. Instead of paying duties, the importer posts a bond for 110% or twice the amount of duties, taxes, etc. that would be due if the goods were entering without the TIB.

Most TIB goods must be re-exported or destroyed within one year. Two one year extensions may be granted. When using a TIB, it’s important to understand that the goods cannot be sold in the U.S. and must be re-exported within the allotted time frame. Many importers prefer using a TIB instead of setting up a duty drawback program, as they don’t have to wait months to recovery their duties.

When to use a TIB

TIBs are most useful for goods subject to high duties that will be imported for testing/repair before being re-exported. They are commonly used for medical devices that have yet to be approved by the FDA.

Keep in mind that CBP has strict requirements for goods that qualify for TIB. If your goods fail to meet these conditions, you could face a penalty of 110% or double the duties and user fees due, depending on which TIB provision was used.

Are you TIB ready?

Before ever making entry under a TIB, make sure

  • your goods qualify under one of the 14 TIB provisions
  • you’ve carefully reviewed the Customs requirements for TIBs
  • you’ve consulted with an expert or obtained a binding ruling, if necessary
  • your Customs documentation indicates that it’s a TIB shipment
  • you’ll be able to supply the necessary supporting documentation and records to account for the imported goods, including the required proof of export/destruction

Come learn more about TIB and other duty savings programs during one of our seminars on Duty Deferral & Recovery Strategies this November.


Chicago, IL – 11/4/14
[Register/more info]

Rochester, NY – 11/12/14
[Register/more info]

Syracuse, NY – 11/13/14
[Register/more info]

Albany, NY – 11/20/14
[Register/more info]

Jim Trubits is Vice President for Mohawk Global Trade Advisors. Click here to read more about Jim.


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