HTSUS 9802 Explained: How to Cut Duty on U.S. Parts Assembled Abroad

If you're sending U.S.-made parts overseas to be assembled into a finished product, HTSUS 9802 is the specific rule that decides whether you pay duty on the whole thing again or just on the labor added abroad. Most manufacturers hear "9802" thrown around in a broker email and never get a straight answer about what it actually requires. This guide breaks down exactly what HTSUS 9802 covers, which components qualify, how CBP calculates the reduced duty, how the claim actually gets filed, and where audits most often catch importers off guard — with the specific regulatory citations so you can verify every claim here yourself.

What is HTSUS 9802 and how does the duty exemption actually work?

HTSUS 9802.00.80 is a Harmonized Tariff Schedule provision that lets a U.S. manufacturer subtract the cost or value of qualifying U.S.-origin components from the total appraised value of a finished article that was assembled abroad and is being reimported, so duty is assessed only on the remaining value — typically the foreign assembly labor.

Here's the mechanism in plain terms: CBP doesn't apply a special lower duty rate under 9802. Instead, it shrinks the dutiable base. The article still gets classified under its normal HTS heading and pays the normal duty rate for that classification — the rate is unchanged. What changes is the number that rate gets applied to. If a $50,000 finished article contains $40,000 of qualifying U.S. components, duty applies to $10,000, not $50,000.

This is the mechanism most manufacturers reach for first when trying to avoid paying duty twice on components that started out American-made. The legal basis sits in 19 U.S.C. 1202 and is implemented through 19 CFR 10.11 through 10.26, which set out exactly which components qualify and how CBP verifies the claim.

Which components actually qualify for the 9802.00.80 exemption?

A component qualifies for the HTSUS 9802 exemption only if it passes all three parts of CBP's legal test: it was exported ready for assembly with no further fabrication needed, it keeps its physical identity in the finished article, and it's only advanced abroad through assembly or operations incidental to assembly.

Here's what most guides on this topic get wrong: they describe "assembly" as a broad, forgiving category. It isn't. CBP and the courts have drawn a hard line between assembly operations (joining, fitting, fastening components together) and fabrication operations (cutting, drilling, shaping, machining). A component that needs even minor trimming abroad to fit properly typically fails Condition A, regardless of how small the trim is. If your overseas partner is doing anything beyond joining pre-made parts, get a customs ruling before you assume the deduction applies.

How do you calculate duty owed under HTSUS 9802.00.80?

Duty under HTSUS 9802.00.80 is calculated by taking the full appraised value of the returned, assembled article, subtracting the cost or value of the qualifying U.S. components, and applying the article's normal duty rate to what's left.

The value of the U.S. components themselves isn't negotiable or estimated — it's defined by regulation as the cost of those components at the time of their last purchase, or if no actual purchase transaction exists (say, components transferred internally within the same company), their value at the time of export as shown on the invoice and entry papers. If CBP's appraiser thinks that declared value doesn't reflect a reasonable cost, they can reappraise it under standard Tariff Act valuation rules.

On this shipment, the exemption is worth $1,600 — money that simply isn't owed if the paperwork is done correctly. Run that same math across dozens of shipments a year and the number most manufacturers are quietly leaving on the table becomes six figures, not because they're ineligible, but because nobody set up the declaration paperwork to claim it.

What's the difference between 9802.00.80 and 9802.00.40 or 9802.00.50?

HTSUS 9802.00.80 applies to components assembled into a new finished article abroad, while 9802.00.40 and 9802.00.50 apply to an already-finished U.S. article sent abroad for repair or alteration and then returned — and mixing these up is one of the most common classification mistakes we see manufacturers make.

The distinction matters because the duty base is calculated completely differently under each. Under 9802.00.80, you deduct the U.S. component value from the total value of the assembled article. Under 9802.00.40 (warranty repairs) and 9802.00.50 (non-warranty repairs and alterations), duty applies only to the value of the repair or alteration work itself — the value of the original article isn't part of the calculation at all, because it never stopped being "returned," not "assembled."

A practical example: sending unassembled U.S.-made brackets to Mexico to be built into a finished shelving unit is a 9802.00.80 case. Sending an already-built shelving unit to Mexico to have a broken weld repaired and returning it is a 9802.00.40 or 9802.00.50 case, not 9802.00.80 — even though both scenarios involve "something happening abroad" to a U.S.-origin product. Classifying a repair shipment under 9802.00.80, or vice versa, is the kind of error that triggers a CBP request for information on an otherwise routine entry.

How do you file a 9802.00.80 claim step by step?

Filing a 9802.00.80 claim requires two specific declarations — an Assembler's Declaration completed abroad and an Importer's Endorsement completed in the U.S. — submitted with the entry, along with supporting cost records for the U.S. components.

1. Confirm eligibility component by component. Run the three-part test against your actual bill of materials before committing to the assembly process abroad, not after the goods have already shipped.
2. Document U.S. component cost at export. Keep invoices, purchase records, or internal transfer documentation showing the cost or value of each qualifying component at the time of last purchase.
3. Obtain the Assembler's Declaration. The foreign assembler completes this declaration confirming the components were assembled as described and identifying any further processing performed abroad, per 19 CFR 10.24.
4. Complete the Importer's Endorsement. The U.S. importer of record endorses the assembler's declaration, confirming the accuracy of the information and accepting responsibility for the claim.
5. File the entry with the correct classification. Declare the article under its normal HTS heading with the 9802.00.80 secondary classification and the deducted value clearly shown.
6. Retain records for 5 years. CBP can request supporting documentation well after the entry is liquidated — keep the declarations, cost records, and any correspondence about the assembly process.

CBP regulations allow port directors to waive the formal declaration requirement in some circumstances if they're independently satisfied the goods qualify, but relying on that waiver rather than preparing the documentation properly is a bet most importers shouldn't make. Getting the paperwork chain right the first time is far less work than reconstructing it during an audit. If you're weighing whether to handle this in-house or bring in outside support, our comparison of import export consultant vs. customs broker vs. freight forwarder breaks down which type of partner actually handles 9802 declarations as part of their standard service.

What documentation does CBP require, and what triggers an audit?

CBP requires the Assembler's Declaration, the Importer's Endorsement, and supporting cost documentation for every 9802.00.80 claim, and its own internal audit guidance flags specific red flags — like component substitution and unclear origin — that trigger closer review.

CBP's Technical Information for Pre-Assessment Survey (TIPS) documentation, used by its own auditors, identifies general red flags and origin-specific red flags that lead to a claim being pulled for review. In practice, the patterns that draw scrutiny are consistent across the rulings we've reviewed:

• Substituted components. Claiming U.S. origin for components that were actually swapped for foreign-made equivalents somewhere in the supply chain.
• Vague component descriptions. Generic descriptions like "parts" or "hardware" on the declaration instead of specific, traceable component identifiers.
• Cost records that don't tie to actual purchases. Declared component values that can't be matched to a specific invoice or purchase order.
• Processing abroad beyond assembly. Evidence in shipping or production records that components underwent cutting, machining, or other fabrication before assembly.
• Missing or incomplete Assembler's Declarations. Declarations signed without the specificity 19 CFR 10.24 requires.

None of these are exotic problems — they're the direct result of treating the 9802 declaration as a formality rather than a real compliance document. The importers who avoid audit trouble are the ones who can produce a clean paper trail from purchase order to export to assembly to entry, on demand, years after the fact.

Does the 9802 exemption apply to Section 232 and reciprocal tariffs too?

Yes — CBP guidance confirms that for goods entered under 9802.00.80, the additional duties imposed under Section 232 and the 2025 reciprocal tariff actions also apply only to the value of the article assembled abroad, minus the cost of the U.S.-made components, not to the full value of the finished article.

This matters more now than it did a few years ago. With multiple layers of additional duties stacking on top of standard MFN rates since 2025, the 9802 deduction isn't just shaving a few percentage points off a base tariff rate anymore — it's shrinking the base that every additional layer gets calculated against. A manufacturer with heavy U.S. content in an assembled product can see the 9802 deduction matter significantly more in 2026 than it did when only the standard duty rate was in play.

Is HTSUS 9802 the same as USMCA/CUSMA duty-free treatment?

No — HTSUS 9802.00.80 and USMCA/CUSMA preferential treatment are separate legal mechanisms that solve different problems, and a shipment can qualify for one, both, or neither.

USMCA/CUSMA duty-free treatment is based on rules of origin for the finished article as a whole — did enough of the product's value or content originate in the U.S., Canada, or Mexico to qualify the finished good itself for preferential treatment. HTSUS 9802.00.80 doesn't care about the finished article's overall origin at all; it only cares about deducting the specific U.S.-made components inside it, regardless of what country the assembly happened in or whether the finished article otherwise qualifies for any trade agreement. A finished article assembled in a country with no U.S. trade agreement can still claim a 9802.00.80 deduction on its qualifying U.S. content. If your assembly operations run through Canada specifically, our guide on exporting to Canada covers how CUSMA rules of origin work alongside — not instead of — a 9802 claim.

"9802.00.80 and CUSMA aren't competing options — they're two separate levers, and the manufacturers who save the most duty are the ones checking both on every shipment, not just the one they already know about."

What mistakes cause manufacturers to lose their 9802 deduction?

• Treating any overseas processing as "assembly." Cutting, drilling, or shaping a component abroad disqualifies it under Condition A, even if the operation is minor.
• Skipping the Assembler's Declaration. Without it, CBP has no formal basis to grant the deduction, regardless of whether the components actually qualify.
• Losing the cost documentation. If you can't produce the purchase cost or export-time value of the U.S. components, there's nothing for CBP to deduct.
• Confusing 9802.00.80 with the repair provisions. Filing an assembly shipment under the repair/alteration subheadings (or vice versa) triggers classification disputes.
• Assuming component substitution goes unnoticed. Swapping in foreign-made parts without updating the declaration is one of CBP's most commonly flagged red flags.
• Not checking country-specific tariff interactions. Assuming the 9802 deduction interacts with every additional duty program the same way, when treatment has varied by country and by year since 2025.

Frequently asked questions about HTSUS 9802

Read more on duty exemptions and cross-border compliance