Have you ever needed to export a product that was imported for repair or replacement?  Do you understand the requirements to export the product back to the customer? The Foreign Trade Regulations (FTR), Section 30.29 outlines how to report repairs and replacements in the Automated Export System (AES).

Let’s take a quick look at what the U.S. Census Bureau views as a repair or replacement. For example, a U.S. company sells an engine to a Mexican buyer and after one year the engine breaks. The Mexican company sends the engine back to the U.S. company to be repaired. The U.S. company repairs the original engine and sends it back to the Mexican buyer. Because the same engine was sent back to the Mexican buyer, this is considered a repair.

Now, let’s say the same U.S. company sells the engine to the Mexican buyer. After one year the engine breaks, and it’s sent back to the U.S. company. The U.S. company decides that the engine cannot be repaired, so they send a replacement engine back to the Mexican buyer. Due to the fact that a different engine was sent back to the Mexican customer, this is considered a replacement.

Below is a snapshot of guidance from the FTR, Section 30.29 on what to report in the AES for repairs and replacements. 

The return of goods previously imported only for repair and alteration:

Goods covered under warranty:

^{*Note: For items repaired/replaced under warranty, include the appropriate statement on the commercial loading documents:}

^{If repaired: “This product was repaired under warranty."}

^{If replaced: "Product replaced under warranty, value for EEI purposes.”}

Now that we have identified the filing requirements for repairs and replacements, let’s take a deeper look at the examples from earlier. A U.S. company sells an engine to Mexico for $80,000, which includes inland freight and insurance; however, the engine breaks after one year. The company in Mexico sends the engine back to the U.S. company to be repaired. The engine can be repaired for $3,000, which consists of parts and labor. When the engine is exported back to the Mexican customer, the value reported in the AES will be the $3,000, plus inland or domestic freight, insurance, and other charges to the U.S. seaport, airport, or land border port of export, and the Schedule B number reported will be 9801.10.0000.

Now, let’s say the engine cannot be repaired and must be replaced. Additionally, the engine is under warranty. When the replacement engine is exported back to the Mexican customer, the Schedule B number or Harmonized Tariff Schedule of the United States Annotated (HTSUSA) classification number of the actual engine will be reported, NOT 9801.10.0000, as listed in the previous example. The engine costs $65,000 to replace, which is the sum of expenses for the USPPI to acquire/produce the engine. Therefore, the value to be reported is $65,000, plus inland or domestic freight, insurance, and other charges to the U.S. seaport, airport, or land border port of export. Since the engine is replaced under warranty at no cost to the customer, the commercial loading documents should have the following statement: “Product replaced under warranty, value for EEI purposes only.”

The information in this blog will assist you in filing your export information for repaired or replaced products. It is important that the Census Bureau continue to capture accurate export statistics, which are used to publish the U.S. International Trade in Goods and Services report.  For further questions, please contact the Trade Regulations Branch at

800-549-0595, option 3 or email itmd.askregs@census.gov.