Trade Information
Center, US Department of
Commerce
Companies
use merchandise and machinery
from all over the world.
Sometimes goods must be
returned to their country of
origin for repair and
maintenance. In international
trade and shipping logistics,
there are two scenarios for
U.S. companies dealing with
repairs. First, an U.S.
company imports defective
merchandises from a foreign
buyer for repair and then
re-exports the repaired
merchandise back to the
customer. Second, U.S.
customers return merchandise
to a foreign country for
repair and then re-import it.
In both scenarios, U.S.
companies should contact their
local Customs office for exact
procedures.
WHAT ARE THE PROPER
PROCEDURES FOR SENDING A
REPAIR TO A FOREIGN COUNTRY?
When sending merchandise
abroad for repairs or
alterations, you should
register it with U.S. Customs
before shipping it to avoid
paying U.S. import: duties
upon its return. Use Customs
Form CF 4455;
"Certificate of
Registration, "available
at your local Customs office.
A CF 4455 demonstrates prior
ownership.
Step 1: Take the item
to the nearest customs office
for certification. Customs
will give you CF 4455 in
duplicate for you to complete
and verify that the CF 4455 is
accurate and authorize it.
A copy of the CF 4455 is
available for download at: http://www.customs.gov/xp/cgov/toolbox/forms/.
Step 2:
Enclose the original CF 4455
with the merchandise you are
sending abroad.
Step 3: Be sure to
instruct your foreign supplier
to return the CF 4455 with the
repaired item and to mark on
the outside of the return
package:
"Repaired/Altered
Merchandise B CF 4455
enclosed."
Step 4:
Keep the duplicate in case
something goes wrong to
demonstrate that you are
liable only for the duty on
the repair and not the entire
article.
What
procedures should foreign
Customers follow when sending
an item to the US for repair?
Customers
in other countries should
first check with their own
Customs Authority and register
the merchandise before sending
it to the United States for
repair. Every country's
Customs Authority has a
different procedure and
documentation for repairs, so
it is important that you
stress this registration with
your foreign customers before
they ship the merchandise back
to your company.
With regard
to U.S. Customs, goods to be
repaired may be imported under
Temporary Importation under
Bond (TIB) procedures.
Additional information regard
temporary importation can be
found at our companion
article:
Temporary
Entry Made Easy.
The U.S.
importer
should
contact
the
local
Customs
office
for
procedures
and
bonding
requirements
or work
with
your
local
Customs
House
Broker.
IF I EXPORT MERCHANDISE
FOR REPAIR, DO I HAVE TO REPAY
DUTY AND TAXES ON THE ITEM
WHEN IT IS RETURNED?
The value of the repairs
performed abroad may be
dutiable even if the item
being repaired is not. When a
company imports merchandise
after being repaired, duties
and taxes are usually paid
only on the repair and not the
entire good, provided the
company has followed the
proper Customs procedures:
before shipping the item to
its country of origin
(otherwise duties will be
levied on the entire value).
Other conditions may affect
the durability of the item to
be repaired, and it is
important to contact your
local Customs office to
understand these special
conditions.
HOW SHOULD A COMPANY SHOW
THE VALUE OF THE REPAIR ON THE
COMMERCIAL INVOICE? WHAT IF
THE ITEM IS UNDER WARRANTY?
The value
of a repair should be listed
on the commercial invoice. If
the repair is a sale, then the
invoice should reflect the
transaction value. If it is
not a sale (for exam-pie the
repair is under warranty),
then the company could list
the value as its cost
(wholesale value), fair market
value, or the company's cost
of production if it performed
the repair.
Most
importantly, the company
should write the following
sentence on the commercial
invoice: "No charge:
Warranty Repair Value for
Customs purposes only."
Even with this demarcation on
the commercial invoice, the
value of repair, even if under
warranty, is dutiable in the
United States
WHAT
HARMONIZED SYSTEM OR SCHEDULE
B NUMBERS APPLY TO REPAIRS?
The
Harmonized System (HS) numbers
that apply to repairs are
9801,9802 and 9813 as well as
Schedule B numbers 9801.10.
These classifications are
important both for duty and
tax determinations and for
trade statistics. Proper
classification clarifies that
duties and taxes are
applicable to only the value
of the repair and not the
value of the full item. For
trade statistics, using the
9801 and 9802 headings will
ensure the U.S. Census Bureau
includes only the repair value
in the trade statistics and
will not double-count the
items.
U.S.
companies importing items to
be repaired from a foreign
buyer should instruct their
customers to use HS number
9801.00.1012 on their shipping
documentation. After the U.S.
company repairs the item and
is ready to re-export, it
should use Schedule B number
9801.10.0000.
Conversely,
U.S. companies exporting items
to be repaired by a foreign
supplier should use the
appropriate chapter 1-97
Schedule B number. When the
item is repaired and returned
to the United States, the item
should be classified under HS
code 9802.00. More
specifically, 9802.00.40
should be used for repairs or
alterations made under
warranty and 9802.00.50 should
be used for shipments not
under warranty. If filing a
paper SED, it is necessary to
state the items that will be
repaired and returned to the
U.S. If filing an SED
electronically through
Automated Export System (AES)
the code TE (indicating
temporary export) should be
entered in the export
information field.
When using
a 9813 number, it should be
noted that these are Temporary
Importation Under Bond Numbers
and these goods must be
exported within one year of
importation as a condition of
importing using this
provision. Under the TIB
provision (9812;) articles may
be imported for up to one year
with up to two additional
one-year extensions giving the
importer a maximum time of
three years for these articles
that were imported for repair
to remain in the United
States.
WHAT HARMONIZED SCHEDULE
OR SCHEDULE B NUMBERS APPLY TO
REPLACEMENT PARTS?
Companies exporting
replacement parts, including
warranty replacement, for
installation abroad should
report those items under the
Harmonized System or Schedule
B number for such parts and
list the selling price or
cost, if not sold.
HOW SHOULD THE SHIPPER'S
EXPORT DECLARATION (SED) BE
COMPLETED TO PROPERLY REFLECT
REPAIR TO AN ITEM?
When a good
is returned by a foreign buyer
to the U.S. manufacturer for
repairs, fixed, and then
re-exported, the U.S. firm
must file a new SED for the
repaired good. The following
information is to be included
on the new SED:
1. Field
22: Provide the Schedule B
Number and include below it
the following text:
"merchandise being
returned or otherwise
exported after repair or
alteration in the United
States." The
merchandise should be
reported as
"domestic" under
Schedule B number
9801.10.0000 with the proper
shipping weight reported.
2. Field
26: The value reported on
the SED for such merchandise
should reflect only the cost
of the repairs or
alterations (including parts
and labor), if no charge is
made for the repairs or
alterations, such as repairs
under warranty, report a
value representing the cost
of such repairs or
alterations to the
manufacturer.
If the
value of the repairs or
alterations is $2,500 or less,
or the merchandise is being
shipped: to Canada or to U.S.
Territories other than Puerto
Rico and the Virgin Islands,
no SED is required. When an
SED is not required, the bill
of lading, airway bill, or
other loading document used by
the exporting carrier must
include the following
statement: "No SED
required -- value of repairs
or alterations $2,500 or
less."
For
more information, contact:
For
questions about repairs,
documentation requirements and
other country or
export-related information
visit the Trade Information
Center's website at http://www.export.gov/tic
or call 1-800-USA-TRAD(E).
To find
your local U.S. Customs office
and obtain information on
import and export regulations
visit http://www.customs.gov
or call toll free at
1-877-287-8667.
