U.S. Treatment of Remanufactured Goods at the Border

1. 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

2. 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

3. Growing Trade Complexity Global economic integration creates a challenging trade environment. To effectively manage this complexity, CBP utilizes an effective risk management approach

4. 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

5. 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

6. CBP Trade Strategy Goal 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

7. How does CBP Treat Remanufactured Goods? • Rules • No specific rules Regulations • No specific regulations • Cargo procedures • No special licenses or certifications

8. 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

9. 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

10. 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

11. 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

12. 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;

13. U.S. Trade Preference ProgramsU.S. - Korea Free Trade Agreement: Example Used fuel pump of unknown origin Fuel pump completely disassembled Cleaning and testing of fuel valve Recovered fuel valve used to produce remanufactured good (fuel pump) Specified processing (surface machining) Recovered good (fuel valve) Remanufactured fuel pump has similar performance standards/ similar warranty as new pumps Recovered fuel valve treated as originating for determining whether remanufactured fuel pump qualifies under FTA