Customs and Border Protection: Only Goods Complete for Intended Use Qualify for 9802.00.50

January 13, 2020

Goods that are exported before being completed for their intended use, are not eligible for treatment under the 9802.00.50 subheading for merchandise that is returned after alteration or repair, confirms Customs and Border Protection (CBP). The Customs Bulletin (Vol. 53, No. 48) from January 2nd, proposed to revoke a 2006 ruling that allowed for 9802.00.50 treatment on automotive rim forgings. Subheading 9802.00.50 requires duties only on the value of the repairs or alterations.

The forgings are imported from Taiwan, exported to Mexico, and eventually returned. The forgings in Mexico go though “staging, grinding with air grinder, polishing with polishing wheel, sanding, buffing, and cleaning” CBP states. After being returned to the U.S., the goods undergo the following operations: Compound removal, pre-clean spray wash, clean spray wash, rinse spray wash, deoxidizer spray, rinse spray wash, over drying, application of clean coat, curing, coating thickness inspection, and packaging.

CBP confirms the operations in Mexico are “necessary, intermediate steps in the production of the finished good”. The forgings “require additional processing prior to exportation to Mexico, to be suitable for their intended use”. The U.S. processing steps “are necessary to ensure the automotive rims can withstand rusting and exposure to the outdoor environment,” continues CBP. “Since the automotive rim forgings are not complete for their intended use prior to exportation and the Mexican operations are merely a continuation of the product of the finished good, we conclude that the subject goods do not qualify for subheading 9802.00.50.” the agency affirms.

For Customs Bulletin and Decisions, Vol. 53, No. 48, click here.

Source: U.S. Customs and Border Protection (CBP)


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