U.S. Treatment of Remanufactured Goods at the Border

Elif Eroglu

Attorney-Advisor, Regulations and Rulings, Office of International Trade

U.S. Customs and Border Protection

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CBP Mission

Securing our nation’s borders, while facilitating the flow of legitimate travel and travel

CBP protects more than 100,000 miles of shoreline and land border

We operate 330 ports of entry, and process almost 106 million cars, buses, trucks, trains, vessels and aircraft arriving at our borders each year

We screen more than 28 million commercial shipments arriving in air and maritime cargo, and 250 million more arriving in small parcels via express carriers and mail

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Growing Trade Complexity

Global economic integration creates a challenging trade environment. To effectively manage this

complexity, CBP utilizes an effective risk management approach

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CBP Risk Management Approaches

Multi-Layered Approach to Risk

• Obtaining advanced information about cargo

• Using advanced targeting techniques to assess risk

• Fostering partnership with the private sectors and OGAs

• Expanding enforcement efforts earlier in the supply chain

• Maintaining robust inspection regimes at our ports of entry

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CBP Risk Management Approaches

Priority Trade Issues (PTIs)

CBP focuses its actions and resources around Priority Trade Issues (PTIs) that pose a significant risk to consumers, stakeholders, and the economy of the United States

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CBP Trade StrategyGoal 1: Facilitate Legitimate Trade and Ensure Compliance Ensure the compliance of the overall import stream and improve the speed

at which legitimate goods are cleared into U.S. commerce

Goal 2: Enforce Trade Laws and Collect Accurate Revenue Apply consistent enforcement actions enabled by risk management and

targeting and collect the proper amount of revenue

Goal 3: Advance National and Economic Security Protect consumers and the economy from harmful imported goods and unfair

trade practices, advance U.S. Government security and safety priorities, and strengthen national trade policy

Goal 4: Intensify Modernization of CBP’s Trade Processes Build organizational capacity to streamline processes, strengthen workforce

skills, and realize the benefits of modernization

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How does CBP Treat Remanufactured Goods?

Rules No specific rules

Regulations No specific regulations

Cargo procedures No special licenses or certifications

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How does CBP Treat Remanufactured Goods?

Document review procedures Classified the same Valued the same

Enforcement concerns No specific risk determined No problems experienced Part of random sampling, but not targeted

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How does CBP Treat Remanufactured Goods?

Remanufactured merchandise would be classified as the same type of merchandise in new condition, and receives no special treatment from Customs

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U.S. Trade Preference Programs

Recovered goods derived from used goods and utilized in the production of remanufactured goods are originating

Recovered goods: Materials in the form of individual parts that are the result of:

the disassembly of used goods into individual parts; and cleaning, inspecting, testing, or other processes as necessary

for improvement to sound working condition

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U.S. Trade Preference Programs

Remanufactured goods: Made from recovered goods Have a life expectancy and performance standards similar to

those for new goods Have a factory warranty similar to what is offered on new goods

Some FTAs limit coverage to certain industrial goods identified by specific tariff number

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U.S. Trade Preference Programs U.S. - Korea Free Trade Agreement:

Article 6.22:"Recovered goods derived in the territory of one or both of the Parties

from used goods and utilized in the territory of one or both of the Parties in the production of remanufactured goods"

‘‘Remanufactured goods’’ means goods classified in Chapter 84, 85, 87, or 90, or under heading 9402, HTSUS, that:

(1) Are entirely or partially comprised of recovered goods and,(2) Have a similar life expectancy and enjoy a factory warranty similar to

such new goods;

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U.S. Trade Preference ProgramsU.S. - Korea Free Trade Agreement: Example

Fuel pump completely

disassembled

Cleaning and testing of fuel valve

Specified processing

(surface machining)

Used fuel pump of unknown origin

Recovered fuel valve used to produce

remanufactured good (fuel pump)

Remanufactured fuel pump has similar performance standards/ similar warranty as new pumps

Recovered fuel valve treated as originating for determining

whether remanufacturedfuel pump qualifies under

FTA

Recovered good (fuel valve)