OT:RR:CTF:VS H346896 ACH
Mariana Vincent
Reliant Customs Broker
7920 Airway Rd
San Diego, CA 92154
RE: Subheading 9801.00.10, HTSUS; Cardboard Scrap
Dear Ms. Vincent:
This is in response to your letter, dated April 2, 2025, on behalf of your client, Reliable
Container LLC (“Reliable Container”), concerning the applicability of subheading 9801.00.10,
Harmonized Tariff Schedule of the United States (“HTSUS”) to cardboard scrap. Your request
was forwarded to this office from the National Commodity Specialist Division for review. Our
ruling is set forth below.
FACTS:
The item under consideration is scrap of U.S.-origin corrugated cardboard. Reliable
Container, located in Cerritos, California, exports U.S. origin precut corrugated carton sheets to
its plant in Tijuana, Mexico. The finished products manufactured in Mexico are corrugated
cardboard boxes in different shapes and sizes. In Mexico, during the manufacturing process, the
excess corrugated material is “punched out,” similar to a cookie cutter, to shape the box. The
cutting generates less than 10 percent waste. The corrugated cardboard waste is then compacted
into bales and returned to the U.S. for recycling. Reliable Container indicates that the resulting
scrap has no added value, and its condition remains unchanged.
ISSUE:
Whether the cardboard scrap is eligible for duty-free treatment under subheading
9801.00.10, HTSUS.
LAW AND ANALYSIS:
Subheading 9801.00.10, HTSUS, provides for the duty-free treatment of:
Products of the United States when returned after having been exported, or any other
products when returned within 3 years after having been exported, without having been
advanced in value or improved in condition by any process of manufacture or other
means while abroad.
While some change in the condition of the product while it is abroad is permissible,
operations which either advance the value or improve the condition of the exported product
render it ineligible for duty-free entry upon return to the U.S. Border Brokerage Co. v. United
States, 65 Cust. Ct. 50, C.D. 4052, 314 F. Supp. 788 (1970), appeal dismissed, 58 CCPA 165
(1970).
In Burgess Battery Co. v. United States, C.D. 866 (1944), appeal dismissed, 32 CCPA
207 (1944), zinc sheets of U.S. origin were sent to Canada to be used in the manufacture of
battery cups. Zinc trimmings from the irregular top edges of the cups were returned to the U.S.
as scrap. The court pointed out that while the exported articles (zinc strips) had been changed in
condition from the time of their exportation to the time of their importation, the processing
abroad affecting the imported materials were processes of segregation and elimination and not
manufacturing operations and did not serve to increase their value or improve their condition.
Therefore, the returned scrap qualified for duty-free treatment as American goods returned under
a predecessor statute.
Additionally, in Headquarters Ruling Letter (“HQ”) W557348, dated August 31, 1993,
CBP determined that scrap from U.S. origin fabric cut into garment pieces in Mexico was
eligible for duty-free treatment under subheading 9801.00.10, HTSUS. Since CBP and the
Customs Court have ruled previously that creating scrap material neither increases in value nor
improves the condition of the exported cardboard, the merchandise will be eligible for duty-free
treatment under subheading 9801.00.10, HTSUS.
19 C.F.R. § 10.1 sets forth the documentary requirements for entry under subheading
9801.00.10, HTSUS. We note that CBP has not yet amended the regulations to implement the
change to subheading 9801.00.10, HTSUS. Nonetheless, 19 C.F.R. § 10.1(a)(1) provides that
the foreign shipper declare the following information with regard to articles in a shipment valued
over $2,500: the port of exportation, the date of exportation, the quantity, the description of the
merchandise, the value of the merchandise, the date of the declaration, and whether the articles
were returned without having been advanced in value or improved in condition by any process of
manufacture or other means. In addition, the documentation is to be filed “in connection with
the entry.”
19 C.F.R. § 10.1(a)(2) requires the owner, importer, consignee, or agent having
knowledge of the facts regarding the claim for free entry to declare that the foreign shipper’s
statement is true, that the articles were not manufactured or produced in the United States under
subheading 9813.00.05, HTSUS, and that the articles were exported from the United States
without benefit of drawback. The information required also pertains to the name of the
manufacturer, the location of the manufacturer, and the date of the declaration. The three-year
time limit is not applicable here because the cardboard scrap is considered a product of the
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United States. Provided the documentary requirements are satisfied, the cardboard scrap will be
eligible for duty-free treatment under subheading 9801.00.10, HTSUS.
HOLDING:
Based on the information presented, the cardboard scrap at issue is eligible for duty-free
treatment under subheading 9801.00.10, HTSUS, provided the documentary requirements of 19
C.F.R. § 10.1 are satisfied.
Please note that 19 C.F.R. § 177.9(b)(1) provides that “[e]ach ruling letter is issued on the
assumption that all of the information furnished in connection with the ruling request and
incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and
complete in every material respect. The application of a ruling letter by a Customs Service field
office to the transaction to which it is purported to relate is subject to the verification of the facts
incorporated in the ruling letter, a comparison of the transaction described therein to the actual
transaction, and the satisfaction of any conditions on which the ruling was based.”
A copy of this ruling letter should be attached to the entry documents filed at the time this
merchandise is entered. If the documents have been filed without a copy, this ruling should be
brought to the attention of the CBP officer handling the transaction.
Sincerely,
Monika R. Brenner, Chief
Valuation and Special Programs Branch
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