A Brief Overview of Inward Processing

The North American Free Trade Agreement, or NAFTA, provides for duty deferral on goods imported into the United States and subsequently exported to Canada or Mexico. These programs include bonded warehouses, temporary importation under bond, and inward processing.

Inward processing is a duty deferral program that allows yachts and other vessels to be temporarily imported into the United States without paying duty on arrival. Reasons for importation may include repairs or upgrades before being exported to Canada or Mexico. The principle is that the boat is not in free circulation during its time in the U.S.

Upon exportation, the yacht will be treated as if it was withdrawn for domestic use, and applicable customs duties will apply, but the officials assessing the duties may opt to waive them or reduce the balance by a total that does not exceed the total amount in duty that you’ll pay in the NAFTA country where the vessel is headed.

To obtain this waiver or reduction under the inward processing program, you must be able to present evidence of the customs duties paid in the destination country. You have 60 days to provide the necessary documentation – after this point, U.S. Customs will collect the duties. If this does happen and you subsequently obtain the required evidence, the duties you paid may be refunded to the allowable extent.

Inward processing is beneficial when you need to temporarily import a boat into the United States before exporting it to another NAFTA country; but like all importation procedures, there is a lot of paperwork involved and knowledge of U.S. customs regulations is important. The Customs Brokerage Division at Howard S. Reeder can assist you with obtaining the necessary clearance to import your vessel for inward processing and answer your questions regarding the presentation of duty paperwork from the destination country. For more information, contact us today.

Written by Howard S Reeder Inc

Howard S. Reeder, Inc is a family-owned business which has been in operation since 1940 when Howard S. Reeder Sr. founded our customs brokerage company and began helping importers bring products into the United States. Now on our third generation of ownership, both our company and our areas of expertise have greatly expanded over the more than 75 years since our inception.