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TEES Impact

Foreign or International Purchases

Tariffs

The department making the purchase is responsible for paying any tariff-related costs. Departments should confirm key details with vendors before agreeing to any tariff-related increases. These details include:

  • Product identification and description
  • The Harmonized Tariff Schedule (HTS) code classifications for each item being purchased. (NOTE: certain items could have additional tariffs associated with them, such as steel, aluminum, copper, automobiles or auto parts.)
  • Which entity is the Importer of Record (IOR) (buyer or seller)
  • Country of origin
  • Country of manufacture
  • Where the items will be shipped from
  • How the items will be shipped (air, ocean)
  • Any potential sourcing alternatives

Shipping Terms

International Commercial Terms (incoterms) are a set of rules that define the responsibilities, costs and risks involved in international trade transactions.

If the item being imported is not exempt from tariffs, the recommended shipping terms are Delivered Duty Paid (DDP). With these incoterms, the seller handles all logistics and pays all costs, taxes and duties related to import clearance. The seller assumes all risk until the goods are received by the buyer.

If the incoterms are not Delivered Duty Paid (DDP), then the IOR (the agency or university) is responsible for paying the duties and taxes levied by U.S. Customs and Border Protection.

ITA-338P Form

Certain educational, scientific, and cultural imports may qualify for duty-free entry through the ITA-338P form process. Before filing the exemption, notify the procurement office to ensure that the correct shipping terms are included on the Purchase Order and that the customs broker the Texas A&M Engineering Experiment Station (TEES) works with is notified.

  1. Confirm Eligibility: Verify that the institution and the specific instrument meet the criteria, particularly that no U.S.-made equivalent is available to meet the required scientific performance.
  2. Obtain Information: Work with the foreign manufacturer/supplier to get the HTS code and a detailed technical description of the equipment and its accessories.
  3. Complete Form ITA-338P: Fill out the "Request for Duty-Free Entry of Scientific Instruments or Apparatus" form. The form requires a detailed description of the instrument's intended use and documentation of efforts made to find a domestic alternative.
  4. Submit Application: Mail five copies (one with an original signature) of the completed form and supporting documents to U.S. Customs and Border Protection (CBP).
  5. Track and Follow-up: Federal processing can take six to eight weeks or longer. The application will be published in the Federal Register for public comment, and a final decision will be made by federal authorities.
  6. Customs Clearance: The applicant must ensure the customs broker or official responsible for the purchase has a copy of the entry summary (CBP Form 7501), once the instrument enters the U.S.
  7. Paying Duties Upfront: Due to processing delays, the purchaser may need to pay applicable tariffs to receive the equipment and then attempt to claim a refund if the waiver is eventually granted.
  8. HTS Code 9810.00.6000: This code specifically covers instruments and apparatus that are not manufactured in the U.S. and are intended for use by nonprofit institutions.

Payment Terms

Making an advanced payment increases a department’s risk. Always try to pay NET 30 after delivery (i.e., pay 30 calendar days after receiving your order).