On August 24, 2021, Customs and Border Protection (“Customs”) updated their guidance on the responsibilities for importers and Customhouse Brokers regarding duty free claims under the Harmonized Tariff Schedule of the United States (“HTSUS”) subheading 9801.00.10. (Updated from an August 20, 2021 draft). This updated guidance also provides a list of supporting documents that may be requested by Customs to support a party’s claim under subheading 9801.00.10 seeking duty free treatment.
Under the new guidance, Customs clarified that the importer has the burden to prove their claim for duty-free treatment under subheading 9801.00.10 and provide the required documents to substantiate the claim, unless the Customs Broker is acting as the Importer of Record.
The guidance clarifies that the Customs Broker “have a duty of care in the filing of entry documents” but the “burden of proof is not on the [Customs] Broker when requests are made to prove a claim for duty free treatment.” Rather, Customs Brokers are to exercise “responsible supervision and control” and provide “proof of the [Customs] Broker’s communication with the importer on what is required for such claims” as responsible supervision and control. The guidance notes certain repercussions for the Customs Broker if proper instructions are not provided to the importer. In particular, “Customs may address the deficiency through the [Customs] Broker informed compliance process” for failure to exercise responsible supervision and control.
Regarding documentation needed to substantiate a claim for duty free treatment, the guidance enumerates a detailed list of documents that may be requested for shipments valued over $2500 to determine the applicability of duty-free exemption under 9801.00.10 for either U.S. manufactured goods exported from and returned to the United States at any time, or foreign origin goods exported from the U.S. and returned within 3-year time limit. A detailed list of the documents is available here and should be consulted thoroughly to ensure proper implementation of the new guidance.
It is critical to be aware of your responsibilities as a broker on this and other issues in communicating with importing customers. If you have any questions or concerns, please do not hesitate to contact us to seek any clarifications.
Lawrence W. Hanson, Matthew S. Cummins, and Bilal B. Hassan