Inconsistent Application of Customs Rules Can Be Costly

Many aviation parts coming into the U.S. should be duty-free, but confusion around this area can be costly

Under the Agreement on Trade in Civil Aircraft—commonly known as the Civil Aircraft Agreement (CAA)—many civil aviation products and parts imported into the U.S. are exempt from duties. Unfortunately, inconsistent application of customs rules creates confusion about what can be imported duty-free.

The CAA eliminates duties for civil aviation products and articles, as well as civil aircraft maintenance activities. In the U.S., the International Trade Commission’s Harmonized Tariff Schedule (HTSUS) is the information resource for importing products duty-free. For aviation articles, the customs rules in 19 CFR §10.183 explain what qualifies for the aircraft exemption, how to claim fee-free treatment, and what certifications and documents are required.

To enter the U.S. duty-free, the item must be used as original or replacement equipment in the design, development, testing, evaluation, manufacture, repair, maintenance, rebuilding, modification or conversion of aircraft. Several Customs decisions support the proposition that an imported part does not need to be airworthy to be duty-free. In a 1993 case involving parts from Mexico, Customs said they could enter the U.S. duty-free under the CAA, HTSUS and related regulations which “allow for the free-of-duty importation of civil aircraft parts, whether broken or unbroken, if they are certified by the importer for use in civil aircraft.”

Details on how to claim, certify and document duty-free admissions are provided in 19 CFR §10.183. It is vital that the importer have a sound basis for certifying, “The imported article has been imported for use in civil aircraft; it will be so used; and, the article has been approved for such use by the [FAA] or an airworthiness authority in the country of exportation, if such approval is recognized by the FAA as an acceptable substitute for FAA certification.” 

Unfortunately, importers, exporters and customs officials often are not familiar with aviation safety regulations, so the intent of the CAA can become lost in red tape. This leaves MROs bearing unnecessary costs to avoid tariffs or paying tariffs they do not owe. ARSA is developing guidance for members at arsa.org/regulatory/customs.

 Christian A. Klein is the managing member of Obadal, Filler, MacLeod & Klein plc. He represents trade associations as a registered federal lobbyist and is executive vice president of the Aeronautical Repair Station Association.

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