U.S: Unlock Duty Savings: Ch. 98 Secrets

Arne Mielken
May 21
4 min read

Updated: May 22

Want to slash import duties in the USA legally? Discover how Chapter 98 can be your customs compliance game-changer!

Exploring the intricacies of Chapter 98 in the US Harmonized Tariff Schedule with Customs Manager insights.

If you're a customs professional, compliance officer, or international trade consultant, understanding Chapter 98 of the Harmonized Tariff Schedule of the U.S. (HTSUS) can lead to massive cost savings. These powerful customs provisions allow importers to reduce or eliminate duties based on a product’s origin, use, or condition—all legally and with the backing of U.S. Customs.

Whether you're in the EU, UK, or USA, this knowledge can elevate your trade compliance game. In this blog, I’ll walk you through the key benefits, use cases, and risks of relying on Chapter 98, based on my experience helping importers and exporters maximise savings without falling foul of customs regulations.

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Key Questions Covered in This Blog

What is Chapter 98 and why does it matter for importers and exporters?
How can you use HTSUS 9801 and 9802 to legally reduce import duties?
What are the requirements for Temporary Importation under Bond (TIB) under 9813?
What documentation is needed to claim Chapter 98 benefits?
What are the risks and compliance pitfalls of using Chapter 98 provisions?

Abbreviations Used in This Blog

HTSUS – Harmonized Tariff Schedule of the United States
CBP – U.S. Customs and Border Protection
TIB – Temporary Importation under Bond
MPF – Merchandise Processing Fee
FTA – Free Trade Agreement

"Chapter 98 provisions are the hidden gems of the U.S. tariff system. When used correctly, they can turn customs headaches into competitive advantages."— Arne Mielken, Managing Director, Customs Manager

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What is Chapter 98 and why does it matter for importers and exporters?

Chapter 98 is a special section of the U.S. Harmonized Tariff Schedule that allows for reduced or eliminated duties on certain imported goods. Unlike standard tariff classifications, these provisions are based not on the product itself, but on its use, condition, or origin.

Imagine exporting U.S.-made goods for processing abroad, then reimporting them. Without Chapter 98, you'd pay full duty on the finished product—even though part of it was originally U.S.-made. But with heading 9802, you can deduct the value of those U.S. components from the dutiable value. That’s smart importing.

How can you use HTSUS 9801 and 9802 to legally reduce import duties?

Let’s start with HTSUS 9801. This is your go-to if you’re returning U.S. goods after export. If those goods haven’t been advanced in value or condition, they’re duty-free—even if they’ve traveled the world and returned. And origin? Doesn’t matter.

Now, HTSUS 9802 is where the magic really happens for manufacturers. If you send parts or materials abroad for assembly or processing, you only pay duty on the foreign value-added portion. So if 70% of the item’s value is from U.S. components, you only pay duty on 30%.

But be warned—proper documentation, including a declaration from the assembler and detailed invoices, is essential to back your claim. Without it, CBP will deny the benefit.

What are the requirements for Temporary Importation under Bond (TIB) under 9813?

Have goods you’re bringing in for testing, exhibition, or repair—not for sale? Then HTSUS 9813 might be your lifeline. This provision allows goods to enter duty-free under bond, so long as they’re re-exported or destroyed within 3 years.

But beware: this isn’t a “set-it-and-forget-it” provision. You must track and prove what happens to every piece. If anything’s missing, you could be liable for up to twice the estimated duties. That’s why proof of export and accurate timelines are non-negotiable. Keep your bond open until all goods are accounted for—or face the financial consequences.

What documentation is needed to claim Chapter 98 benefits?

Here’s where customs compliance becomes your best friend—or worst enemy. To claim Chapter 98 benefits, you’ll need:

Proof of origin, condition, and processing. That means invoices, declarations, certificates, and sometimes even technical specs. For 9802, the declaration of the foreign assembler and value breakdown are vital. For 9813, a solid export tracking system ensures you close the loop with CBP.

And remember: five-year recordkeeping rules apply. Your broker must be on the ball, and you’ll want to audit your records regularly to avoid unexpected headaches.

What are the risks and compliance pitfalls of using Chapter 98 provisions?

Chapter 98 offers fantastic benefits—but only if you play by the rules. Misusing these provisions can lead to penalties, delays, and rejected entries. A common mistake? Assuming goods qualify for 9801 or 9802 without supporting evidence.

Another pitfall? Not looping in your customs broker or freight forwarder. If they don’t understand your strategy or file incorrectly, you lose out. Or worse—trigger an audit.

The key is proactivity. Train your staff. Document your supply chain. And consult a trusted customs consultant who can identify compliance risks before they become costly errors.

Arne’s Takeaway

Chapter 98 is a powerful customs compliance tool for importers to the USA. Whether you're reimporting goods, assembling abroad, or temporarily importing items, you can unlock huge savings—if you do it right. But with great savings comes great responsibility. Documentation, communication, and expert guidance are your best allies.

Now’s the time to look at your import strategy and ask: Could Chapter 98 reduce my customs costs today?

Expert Recommendations

Audit your imports to identify opportunities under 9801, 9802, and 9813.
Work with a customs consultant to validate your documentation and processes.
Train your brokers and supply chain partners to spot Chapter 98-eligible shipments.
Maintain a compliance calendar to ensure timely bond closures and reexports under 9813.
Subscribe to The Customs Watch USA to stay current on all regulatory updates.

Sources & Further Information

U.S. Harmonized Tariff Schedule – https://hts.usitc.gov/
CBP Guidance on Chapter 98 – https://www.cbp.gov/
ST&R Chapter 98 Resources – https://www.strtrade.com
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Disclaimer

This blog is for informational purposes only and should not be construed as legal or trade compliance advice. For tailored guidance, consult a qualified customs or legal professional.