For companies engaged in global trade, understanding the complex rules around duties and taxes can be challenging. This is especially true for small businesses, since they have fewer in-house resources available to monitor changing rules and to ensure compliance. When you consider that 98% of the more than 400,000 U.S. companies that trade across borders are small or medium-sized enterprises (SMEs), it is easy to see just how many business owners and managers can use some help.

That’s why DHL Express offers tools and services to guide customers as they navigate cross-border sales and shipping. We offer insight across the full range of trade scenarios, including this one: What happens to goods that originate in the U.S. and are exported abroad, but are then returned from another country? Are these goods subject to duties upon entry to the United States?

Let’s take a closer look at this specific circumstance:

Goods Made in the U.S.

The rules relative to duties on returned goods vary based on where the goods are made. Products that are made in the U.S. and then returned at any point after original export are likely to be exempt from duties. However, even if duties are not required, there are specific steps that you must take to ensure compliance when accepting returned U.S.-made goods.

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First, your company must be able to provide proof of U.S origin by supplying a country of origin marking or a certificate of origin from the manufacturer. Second, you must show that the value of the goods has not increased and that the condition of the products has not improved while they were outside of the United States. The bottom line is that while most U.S.-made products are exempt from duty, those that have been repaired or enhanced may be subject to payment. U.S. Customs and Border Protection (CBP) offers the following guidance: “When clearing returning U.S. goods through CBP, the importer should file the CBP Form 311 Declaration for Free Entry of American Goods Returned.”

To learn more about U.S. goods return, contact an Entry Specialist at the Centers of Excellence and Expertise.

Goods with Non-U.S. Country of Origin

In some cases, your company may be bringing back goods exported from the U.S. that were not made here. In many cases, these products may also be eligible for duty-free treatment, with some additional limitations. Foreign-origin goods exported from and returned to the United States are exempt from duty if their value has not increased or their condition improved, and as long as they are returned within three years of export.

So, if your company has imported a product from another country and then sold it to a customer abroad, if that customer returns the item, its entry back into the United States is duty-free. For retailers selling goods abroad to consumers who may want to return or exchange a product, this is an important point.

Has your business encountered any difficult issues related to duties and taxes? Let us know on Twitter @DHLUS.

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