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Is duty required when U.S. components, materials, assets etc. are sent overseas for assembly or processing, then returned back to the U.S.? For instance, gold or stone to be used in jewelry?
If the goods undergo a substantial transformation while overseas, duty is required on the total cost incurred while overseas, including the cost of the components or materials. If the goods are only assembled, there is a provision that will require duty only on the cost of what takes place overseas, excluding the cost of the U.S. components or materials. For example, fabric already cut prior to leaving to the U.S. and ONLY sewn overseas would most likely be eligible for the provision. The term " substantially transformed" means, with respect to a good(s) or a material(s) , changed as the result of a manufacturing or processing operation so that: the good(s) or material(s) is converted from a good that has multiple uses into a good or material that has a limited uses; the physical properties of the good or material are changed to a significant extent; the operation underdone by the good(s) or material(s) is complex by reason of the number of processes and material involved and the time and level skill required to perform those processes; or the good(s) or material(s) loses its separate identity in the manufacturing or processing operation. For an example: a change to concentrated juice of any single fruit or vegetable fortified with vitamins or minerals of subheading 2106.90 from any other chapter or from juice of grapes , apples, pears , bananas , mangoes and carrots of heading 2009, except from heading 0805, subheadings 2009.11 through 2009.39 or subheading 2002.90. For further information on what constitutes a substantial transformation or to ensure your goods are eligible for the provision, contact an Import Specialist at the port through which the goods will be imported. You should also reference our publication entitled "Foreign Assembly of U.S. Components", a hard copy of the publication can be mailed to you by our Customer Service Center. To contact the Customer Service Center please call Toll Free: 1-866-CBP-5511 (227-5511) or if outside the United States dial 703-526-4200 and one of our Public Information Officer's will be able to assist you. Note: The value of gold and/or stones taken overseas to be made into jewelry cannot be subtracted from the value of jewelry when it is reentered into the U.S.
Customs & Border Protection (CBP), Department of Homeland Security
http://www.cbp.gov/
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