CSMS # 62520662 - Clarifications Pertaining to the ACE Entry Type 86 Test: Chapter 98 and Customer Returns

U.S. Customs and Border Protection sent this bulletin at 10/04/2024 09:20 AM EDT

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CSMS # 62520662 - Clarifications Pertaining to the ACE Entry Type 86 Test: Chapter 98 and Customer Returns

The ACE Entry Type 86 Test was republished in the Federal Register with modifications on January 16, 2024 (89 Fed. Reg. 2630). This message clarifies whether merchandise classifiable under Chapter 98 of the Harmonized Tariff Schedule of the United States (HTSUS) and customer returns are eligible for entry under the ACE Entry Type 86 Test.

Chapter 98: All merchandise classifiable under a Chapter 98 HTSUS subheading must also be classified under an appropriate Chapter 1-97 HTSUS subheading. The filing of an Entry Type 86 accords eligible merchandise a duty exemption pursuant to 19 U.S.C.§ 1321(a)(2)(C), such that the duty-free provisions of Chapter 98 are not applicable.

Consequently, merchandise classifiable under a Chapter 98 HTSUS subheading may be accorded duty-free treatment under Chapter 98 utilizing a distinct and appropriate entry type. Merchandise claiming a duty exemption under 19 U.S.C.§ 1321(a)(2)(C) must report the Chapter 1-97 HTSUS subheading on the Entry Type 86 instead.

Customer Returns: Filing an Entry Type 86 is permitted. Customer returns under the Entry Type 86 are subject to the same $800 daily threshold by one person on one day and must be classified under the appropriate HTSUS Chapter 1-97. The aggregate fair retail value in the country of shipment for such merchandise is included within the $800 limit applicable to the consignee named on the type 86 entry. Eligibility for entry under the ACE Entry Type 86 Test for such merchandise is subject to all other requirements specified in the test and CBP Regulations. Filers should assess whether filing under the Entry Type 86 or filing a formal or informal entry under Chapter 98 is more advantageous when processing returns, as both are permissible

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