You may have missed it but on February 24, 2016, H.R. 644 became public law. What is H.R. 644 you ask? It is the Trade Facilitation and Trade Enforcement Act of 2015.

Great. More rules. And largely with a focus on CBP, ICE and the GAO. Snooze.

But for importers there really is some awesome news!

Way down near the end of some very long text is Section 904. This section applies specifically to Chapter 98 of the HTSUS and for our purposes, subheading 9801.00.10

To give a bit of background, 9801.00.10 allows for the re-import of US made goods - duty-free - provided there was no addition to the value or condition of those items.

In practice, it involves so much more than that though. Many documents need to be connected to 9801 entries. These include shipper’s declaration, importer’s declarations, Manufacture Affidavits, and so forth.

Thankfully, the new language to 9801 adds “any other products when returned within 3 years after having been exported” to the duty-free treatment. Funny how just a few words can completely change the provision.

This has two great benefits for international traders…

1. It removes the burden of proving that each good being returned to the US was made in the US or underwent the substantial transformation. This can be a cumbersome task especially when goods were simply exported for temporary use.
   
   
2. It eliminates duty on ANY goods that were exported then returned within 3 years from that time – regardless of origin.

However, there’s always a caveat. Importers still need to be very careful when using the 9801 classification as historically it has been a red flag to US Customs...

Keep in mind that heading 9801 on the whole still applies to US made goods – the old language was not removed. Also, the new language applies to articles entered, or withdrawn from warehouse for consumption, on or after the date that is 60 days after the date of the enactment of this Act.

There are no rules – yet – in the regulations that provide what documentation is needed as proof of export. Word on the street is that invoices, packing slips, bill of lading or airway bills are a good start.

I’d also recommend retaining a copy of your AES filing or any other export paperwork. Better safe than sorry! Section 10.1 of Title 19 CFR also still states that this provision does not apply to articles that have or will benefit from drawback.

As always, any import/export classifications should be done by an expert. That’s where Tradewin can assist.

If you have questions or need help in determining if this updated provision applies to your products, we can help. Let us handle the details.