Returned Goods

Compliance Alert

As you know, with the rapidly evolving steps being taken to curb the spread of COVID19, the current global climate is in a constant state of flux. At TLR, we are doing our best to keep up with domestic and foreign movement restrictions that impact trade.

As of now, there have been no outright restrictions on cargo movement throughout the major markets. While many EU borders are closing to individual or civilian traffic, they remain open for cargo crossing, though experiencing sometimes significant delays. We urge you to follow up with your customers to confirm their status, as we have had reports of businesses shutting down for the foreseeable future. While we understand the urge to expedite as many shipments as possible, we caution you to consider the possibility that cargo may become “stuck” should restrictions tighten further or a business closure is mandated prior to receipt. Business closures could result in the inability to receive cargo, which could lead to storage or potentially the return of freight to the U.S., incurring substantial additional costs.

If your products end up having to be returned to the U.S., you have a couple of options to return them without paying duties.

For U.S. goods returned or foreign goods returned within three (3) years of their export, you can take advantage of the HTS 9801.00.10 classification provision that allows your products to return duty free as long as the goods were not advanced in value or improved in condition overseas. This provision used to apply only to U.S. goods and was referred to as the “US Goods Returned” program. This provision was expanded to include foreign goods a few years ago. In order to use this program, items must have been:

 Manufactured in the U.S. – There is no time requirement for when the goods return after exporting them. In order to make this claim, you will need a Foreign Shipper’s Declaration and an Importer’s Declaration. In the event of an audit by Customs, you will need a manufacturer’s affidavit stating the goods were made in the U.S.

 Foreign made and returned with three years from the date of export – In order to make this claim, you will need a Foreign Shipper’s Declaration, the Importer’s Declaration and the export documentation.

If you need to make this claim, let us know and we will send you the forms you will need to obtain or complete.

If your products are exported and you discover they are not deliverable to your customer before they are cleared through Customs in the foreign country, you may be able to avoid even making an entry upon their return. You can take advantage of a Customs provision that provides for “articles exported from the United States which are returned within 45 days after such exportation from the U.S. as undeliverable and which have not left the custody of the carrier or foreign Customs Service.” You can simply provide the export B/L, the returning B/L and a statement from the carrier that the goods have not left their custody to Customs and they will release the goods without entry or payment of duties.

Most items that are exported under a State Department license will be subject to ATF requirements upon their return to the U.S. Typically, the ATF requires permits to import firearms and ammunition into the U.S. However, there are a number of exemptions to this requirement depending on the items. The most common exemption used is U.S. Goods Returned to the Manufacturer. This exemption states that an ATF import permit is not required to re-import firearms or ammunition in cases where a company/person exports such articles to a foreign country and then brings the articles back into the U.S. because the articles are found to be defective, lack of payment by the consignee, and similar reasons. A bill of sale or other commercial document showing transfer of the firearm or ammunition in the U.S. may be used to establish proof that the firearm or ammunition was taken out of the U.S. In addition to the bill of sale, TLR requests the Importer of Record (original exporter) to provide the export BL(s) and/or ITN(s) against which the product was originally shipped. Since these are U.S. Goods Returned, a Manufacturer’s Affidavit and a Foreign Shipper’s Affidavit are required for entry if duty-free status is to be claimed. Note, an importer is not required to use the ATF exemption for returned goods and may choose to apply for a permit.

TLR is here to help you prepare for contingencies in these unpredictable times and to assist you with the appropriate steps.

We will continue to provide updates as we receive them. Should you have any questions or concerns, please do not hesitate to contact your customer service representative or e-mail

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Heather Kiesel

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