Duty-Free Commercial Sample Importation Regulations And Requirements For Us Businesses

Commercial samples play an essential role in business operations, particularly for product development, soliciting orders, and testing materials prior to manufacturing. For U.S. businesses that need to import samples from international suppliers, understanding the duty-free importation provisions can significantly reduce costs and streamline operations. This article examines the regulations, requirements, and procedures for importing commercial samples duty-free into the United States.

Overview of Duty-Free Sample Importation

The United States has established specific provisions in its tariff system that allow certain commercial samples to enter the country duty-free. These provisions are primarily outlined in the Harmonized Tariff Schedule of the United States (HTS) under subheading 9811.00.60. This HTS number covers "Any sample except samples covered in 9811.00.20 (alcohol samples) or 9811.00.40 (tobacco samples), valued not over $1 each, or marked, torn, perforated, or otherwise treated so that it is unsuitable for sale or for use other than as a sample."

U.S. Customs and Border Protection (CBP) regulates the importation of commercial samples under the same framework as other commercial shipments, making compliance with trade policies crucial for importers. Businesses have different options when importing commercial samples, each with specific requirements that determine eligibility for duty-free treatment.

Types of Duty-Free Sample Importation

Commercial Samples of Negligible Value

Commercial samples valued at $1 or less, individually or in aggregate as shipped, may qualify for duty-free entry under HTSUS subheading 9811.00.60. This provision applies to samples imported from Canada or Mexico under the United States-Mexico-Canada Agreement (USMCA), which replaced the North American Free Trade Agreement (NAFTA) in July 2020.

For samples to qualify under this provision, they must meet specific criteria: - The samples must be imported solely for the purpose of soliciting orders for foreign goods - If valued over $1, the samples must be properly marked, torn, perforated, or otherwise treated prior to arrival in the United States to render them unsuitable for sale or use except as commercial samples

Marked or Defaced Samples

Samples exceeding the $1 value threshold may still qualify for duty-free treatment if they are properly marked or defaced. The HTS provision requires that samples be: - Permanently marked as a "sample" - Cut or torn in a manner visible to customs officials - Otherwise treated to be unsuitable for sale or use except as commercial samples

Additional marking and defacing requirements specifically apply to textile products and footwear. These requirements may vary depending on the type of fabric, size, and other considerations specific to the product category.

Entry Type 86 for Low-Value Shipments

For commercial samples valued at less than $800, importers can utilize entry type 86, which allows goods under this value threshold to be imported free of duties, taxes, and fees. To qualify under this provision, the samples must not be subject to antidumping, countervailing duties, quotas, or require additional fees or IRS taxes to be paid.

Temporary Importation under Bond (TIB)

Businesses bringing samples into the United States for the purpose of soliciting orders or exhibiting at tradeshows may consider Temporary Importation under Bond (TIB). This option temporarily permits the importation of goods into the United States free of duty when the importer posts a bond.

TIBs can be used exclusively for the purpose of soliciting orders of merchandise. Goods imported under a TIB must not be sold or offered for sale and must be exported or destroyed within one year from the date of importation. Importers can request extensions for additional one-year periods, with a maximum total duration of three years.

Requirements for Duty-Free Sample Importation

Documentation Requirements

Commercial documents accompanying the samples must show a value for the samples, even if they are provided to the importer at no cost or have no commercial value. The commercial document must include the specific statement "mutilated samples – 9811.00.60" to ensure proper duty-free treatment.

Marking and Defacing Requirements

For samples valued over $1, proper marking or defacing is essential to qualify for duty-free treatment. Samples must be marked, torn, perforated, or otherwise treated in a way that renders them unsuitable for sale or use except as commercial samples. The marking must be permanent or the defacing must be visible to customs officials.

For textile products and footwear, additional marking and defacing requirements apply. These requirements may include specific methods of marking or defacing that depend on factors such as fabric type, size, and other product characteristics.

Value Limitations

Different provisions have specific value limitations: - Negligible value samples must not exceed $1 in value, individually or in aggregate as shipped - Entry type 86 applies to samples valued under $800 - The value must be clearly documented on commercial papers accompanying the shipment

End-Use Restrictions

Samples imported duty-free under these provisions have strict end-use restrictions: - Samples must be used solely for commercial purposes, such as soliciting orders, product development, or testing - After use, samples must typically be destroyed or donated to charity or other non-commercial entities - Importers are not permitted to sell samples or reconstitute them into articles suitable for sale

For samples imported under TIB, the end-use restrictions are particularly strict, as the samples must be exported or destroyed within the specified time period.

Special Requirements for Textiles, Apparel, Bags, and Footwear

Textiles, apparel, bags, and footwear have special provisions for duty-free importation of commercial samples, but very specific requirements must be met for these goods to qualify. The additional requirements include:

• Special marking or defacing procedures specific to textile products
• Documentation that clearly identifies the samples as being for commercial use only
• Compliance with all applicable textile and apparel trade regulations

These special requirements reflect the complex regulatory environment surrounding textile and apparel imports, which often have additional quotas, restrictions, and labeling requirements that don't apply to other product categories.

International Agreements and Conventions

USMCA (formerly NAFTA)

The United States-Mexico-Canada Agreement (USMCA), which replaced NAFTA on July 1, 2020, provides for the duty-free importation of certain commercial samples and printed advertising materials. Under this agreement, commercial samples must be of negligible value (not exceeding $1) or marked, torn, perforated, or otherwise unsuitable for sale or use except as commercial samples.

The USMCA also allows for the duty-free importation of printed advertising materials classified in Chapter 49 of the Harmonized Tariff Schedule, which includes brochures, pamphlets, leaflets, trade catalogues, and yearbooks.

International Convention to Facilitate the Importation of Commercial Samples

The International Convention to Facilitate the Importation of Commercial Samples and Advertising Material, established in 1952, is a United Nations multilateral treaty that allows the duty-free importation of commercial samples determined to be of "negligible value" and advertising materials such as catalogues, price lists, and trade notices.

As of 2013, 66 states were parties to this convention, which was soon complemented by the Customs Convention Regarding the E.C.S. Carnets for Commercial Samples and later virtually superseded by the Customs Convention on the A.T.A. Carnet for the Temporary Admission of Goods in 1961.

Compliance and Consequences

Sample Disposal Requirements

Samples imported duty-free under these provisions must be properly disposed of after use. Typically, this means destroying the samples or donating them to charity or other non-commercial entities. Importers are strictly prohibited from selling these samples or reconstituting them into articles suitable for sale.

For samples imported under TIB, the disposal requirements are particularly time-sensitive. The samples must be exported or destroyed within the specified timeframe, with extensions possible up to a maximum of three years.

Consequences of Non-Compliance

Failure to comply with the requirements for duty-free sample importation can result in significant consequences. For samples imported under TIB, failure to export or destroy them prior to the expiration date will result in liquidated damages equal to double the estimated duties for the samples.

Other potential consequences of non-compliance include: - Payment of back duties and taxes - Penalties and fines - Seizure of the samples - Potential loss of import privileges - Increased scrutiny of future shipments

Conclusion

Importing commercial samples duty-free into the United States is subject to specific regulations and requirements that businesses must understand and follow. The HTS provision 9811.00.60 allows for duty-free treatment of samples valued at $1 or less or those properly marked or defaced to be unsuitable for sale. Additional options include entry type 86 for low-value shipments and Temporary Importation under Bond for samples brought in for temporary use.

Businesses must ensure proper documentation, marking, and end-use compliance to maintain eligibility for duty-free treatment. Special requirements apply to textiles, apparel, bags, and footwear, which have additional regulatory considerations. International agreements like USMCA and the International Convention to Facilitate the Importation of Commercial Samples further shape the landscape of duty-free sample importation.

Non-compliance with these requirements can result in significant financial and operational consequences, making it essential for businesses to understand and adhere to all applicable regulations. By carefully following the proper procedures and maintaining thorough documentation, businesses can take advantage of duty-free sample importation while ensuring compliance with U.S. customs regulations.

Sources

1. CH Robinson Commercial Samples Guide
2. CBP NAFTA Samples Information
3. 19 CFR § 181.62 - Commercial samples of negligible value
4. International Convention to Facilitate the Importation of Commercial Samples
5. STR Textiles and Apparel Samples Webinar