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Duty & Tariff Exemption Process

Overview

It may be possible to have duties waived on the purchase and import of goods. The administrative requirements for this exemption are significant and include petitioning the Secretary of Commerce and publication in the Federal Register. Misuse of this exemption is subject to both civil and criminal penalties.

Background

The Florence Agreement (also known as the Agreement on the Importation of Educational, Scientific and Cultural Materials) is a treaty whereby States agree to not impose customs duties on certain educational, scientific, and cultural materials that are imported by use of tariff exemption code HTS 9810.00.6000.

Eligibility Criteria

To qualify for consideration to use the tariff exemption under HTS 9810.00.6000, the item must be purchased and imported by The University of Maryland and the following conditions must be met:

The applicant, University of Maryland (UMD), must be a public or private nonprofit institution established for educational or scientific purposes. The supplier/manufacturer cannot file the application on behalf of UMD. This should be completed by the department contact with the best technical knowledge of the purchased item.

(See also Section 8 of ITA-338P Form, and Sections 301.5(d)(1) and (2) in Title 15 Part 301 of the Code of Federal Regulations)
Proof that the item(s) being imported does not have a comparable domestic alternative available for purchase/manufacturing:

  • Detailed specifications of the foreign equipment (including guaranteed performance specs)
  • Comparison with domestic models, citing manufacturers and model numbers
  • Evidence of outreach to U.S. manufacturers, including:
  1. Requests for bids/quotes
  2. Responses from manufacturers
  3. Documentation showing inability or unwillingness to produce the equipment

Additional required information:

  • Name or type of equipment being purchased (e.g., microscope, laser, etc.)
  • Foreign manufacturer’s name and country
  • Description of the equipment being purchased (e.g., manufacturer’s model number(s), design specifications, etc.)
  • Copy of the Purchase Order (and corresponding contract, when applicable), if order has been placed or is pending purchase. Documentation must clearly distinguish between goods and services being provided by the supplier.
  • Description of the research purpose for the equipment (e.g., objective of research studies/investigations)
  • Description of the science-related educational purpose (e.g., course content)

The University of Maryland must issue a Purchase Order or have a firm intention to issue a Purchase Order within 60 days following a favorable decision on the application.

The University of Maryland must be responsible for shipping and importation arrangements via the use of the customs broker of record in order to file the application. The supplier/manufacturer cannot be responsible for making the shipping and importation arrangements on behalf of the University of Maryland.

The University of Maryland must obtain approval from the Department of Commerce to present it to Customs via the authorized customs broker of record.

Application Process

  1. Timeline: Start the application process 6 months prior to the intended importation.
  2. Initial Request: Contact the UMD Customs & Duties Control team.
  3. Due Diligence: Provide required documentation to the Export Control team, including confirmation that no comparable domestic alternative is available. The Export Control team is responsible for ensuring proper use of tariff exemption code HTS 9810.00.6000 prior to submitting an application to the Department of Commerce.
  4. Submit Documentation (completed by end user): ITA-338P Form - Submit an advanced application for duty-free entry. This application cannot be submitted electronically and must be physically mailed to U.S. Customs and Border Protection for review by the Department of Commerce.
  5. Supporting Product Documentation: Provide detailed product information to the Department of Commerce.
  6. Public Notice: The application will be published in the Federal Register and open for public comments.
  7. Decision:  Expect a turnaround time of 60-90 days from the date of publication of the Public Notice in the Federal Register for the Department of Commerce to issue a decision.

Legal Risks

  • Items entered under the duty-free provision without Department of Commerce authorization will be subject to normal duty rates plus additional fines that can result in civil and criminal penalties.

If you have questions, contact the Import Control team at customsduties@umd.edu.

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