Repairs & Alterations FAQs

Chapter 98 repair or alteration treatment may apply when goods are exported from the United States, repaired or altered abroad, and then returned to the United States. If the requirements are met, the importer may be able to avoid paying duty on the full value of the returned article and instead pay duty only on the value of the foreign repair or alteration. For qualifying repairs or alterations performed in Canada or Mexico, duty-free treatment may be available.

The two main provisions are HTSUS 9802.00.40 and HTSUS 9802.00.50. In general, 9802.00.40 is associated with certain warranty repairs or alterations, while 9802.00.50 is commonly used for other qualifying repairs or alterations.

The basic requirement is that the same article must be exported from the United States, repaired or altered abroad, and returned to the United States. The foreign work must be a repair or alteration, not manufacturing, completion of an unfinished product, or creation of a new commercial article.

Yes. This benefit is for articles exported from the United States and returned after foreign repair or alteration. If the article was never exported from the United States, this Chapter 98 pathway is generally not available.

Yes. The same-article requirement is one of the most important parts of the analysis. The returned article should be the same physical article that was exported, although parts may be replaced as part of a qualifying repair. A complete substitute or replacement article creates major risk.

Yes, replacement parts may be used as part of a repair if the original article remains the same article. The risk increases when major components are replaced or when the work effectively produces a different article. The key question is whether the repair restored or altered the existing article, or whether the foreign work created a new article.

A repair usually restores an article to working, usable, acceptable, or intended condition. Examples may include fixing damage, replacing defective parts, correcting a malfunction, restoring worn components, or performing warranty service on a defective article.

An alteration usually modifies, improves, cleans, adjusts, renovates, or changes an existing article without creating a new commercial article. Examples may include cleaning, re-sterilizing, re-dyeing, re-labeling, re-marking, calibration, minor modification, or certain types of refurbishment.

Risky foreign work includes manufacturing, assembly, completion of an unfinished product, conversion of raw material into a finished article, addition of essential components, or any process that creates a new or commercially different good. If the article was not complete for its intended use before export, the claim may be especially risky.

Testing or inspection alone may not be enough. If the foreign party only inspects or tests the article and does not perform a repair, cleaning, restoration, or qualifying alteration, the claim may be weak. Testing that is connected to an actual repair or alteration is stronger.

Yes. Defective goods may qualify if they were exported from the United States, repaired abroad, and returned as the same articles. A defective but complete product is different from an unfinished product that still requires ordinary manufacturing.

Unfinished goods are risky. If the article was incomplete for its intended use when exported and the foreign operation completed it as part of normal manufacturing, the work is likely not a qualifying repair or alteration. The provision is not meant to cover ordinary production performed abroad.

A repair or alteration works on an existing article while preserving its identity. Manufacturing creates, completes, or transforms an article into a new or commercially different product. The more the foreign work changes the article's name, character, use, essential characteristics, or commercial identity, the greater the risk.

Repairs or alterations performed in Canada or Mexico may qualify for duty-free treatment if the special requirements are met. This can be more favorable than the regular rule, where duty generally applies to the value of the foreign repair or alteration. However, Canada and Mexico treatment still requires that the work be a true repair or alteration and not manufacturing or completion of unfinished goods.

For qualifying goods repaired or altered in Canada or Mexico, the special rule may apply regardless of the origin of the goods. The important questions are whether the goods were exported from the United States, repaired or altered in Canada or Mexico, returned to the United States, and not changed into a new or commercially different good.

A major exclusion applies when goods are incomplete for their intended use when exported to Canada or Mexico and the processing performed there is a normal step in preparing or manufacturing finished goods. In that situation, duty-free repair or alteration treatment may not apply.

No. A warranty repair can be a strong fact, but it does not automatically qualify. The same article must still be exported and returned, the work must be a repair or alteration, and the documentation must support the claim. A warranty replacement where a different article is returned is much riskier.

The main documents usually include a declaration from the foreign repairer or alterer, a declaration from the owner, importer, consignee, or agent, a repair invoice, proof of export from the United States, proof of return, and evidence that the same article was exported and returned. Supporting documents may include repair reports, serial number records, photos, warranty records, shipping documents, and broker entry records.

The foreign repairer declaration should identify the articles received, state that they were received for repair or alteration, describe the repairs or alterations performed, state the full cost or value of the repairs or alterations, show the total value of the articles after repair or alteration, and confirm that no substitution was made.

The importer, owner, consignee, or agent declaration should confirm that the foreign repairer declaration is true and correct to the best of the declarant's knowledge, that the articles were exported from the United States for repair or alteration, that they were exported without benefit of drawback unless a USMCA drawback rule applies, and that the returned articles are the same articles that were exported.

Yes. CBP may request additional proof that the articles were actually exported from the United States for repair or alteration. Examples may include a foreign customs entry, foreign customs invoice, foreign landing certificate, bill of lading, airway bill, or other shipment records.

For regular non-Canada/Mexico claims, duty is generally based on the cost or value of the foreign repair or alteration, not the full value of the returned article. The repair or alteration value may include labor, parts, materials, and other articles furnished for the repair or alteration. Certain U.S.-incurred expenses, such as engineering, plans, specifications, tools, or equipment for doing the work abroad, may be excluded from that repair value calculation.

Yes. The invoice should separately identify the value of the repair or alteration whenever possible. A clear invoice helps support the duty calculation and reduces the risk of CBP questioning the claim.

An importer should consider a CBP ruling when the foreign work is complex, production-like, or close to manufacturing. A ruling may also be useful if the goods were incomplete before export, major components were added or replaced, the article's identity changed, or the same-article evidence is weak.

No. The analyzer is a preliminary screening and documentation support tool. It helps users organize facts, identify risks, evaluate possible Chapter 98 treatment, and prepare a document checklist. It does not guarantee CBP acceptance, duty treatment, or entry results. Importers remain responsible for reasonable care and should consult their customs broker, trade counsel, or CBP when appropriate.