The United States Court of International Trade recently determined that it will not consider language appearing at “non-enumerated” provsions of the Harmonized Tariff Schedule (HTS) when determining whether imported and exported goods are “substitutable” for duty drawback purposes.

In Spirit Aerosystems LLC v. United States, Slip Op. 24-10 (January 30, 2024), the court denied a drawback claimant’s request that nonenumerated language be “read into” 8- or 10-=digit provisions of the HTS.

Pursuant to the Trade Facilitation and Trade Enforcement Act of 2015, 19 U.S.C. §1313(j)(5) provides that imported and exported goods are substitutable for drawback purposes if they are classifiable in the same 8-digit subheading of the HTSUS. However, goods may not be substituted if the first word in the 8-digit subheading is “other”. In that case, goods are substitutable if they are classifiable in the same 10-digit statistical subheading, unless that subheading also begins with the word “other”. If both the 8-digit and 10-digit subheadings begin with “other”, drawback is not available.

Spirit Aerosystems’ merchandise was classifiable under HTSUS subheading 8803.30.0030, which provides for:,

Because the 8-digit and 10-digit subheadings both began with “other”, Spirit’s claim was denied. [In fact, Customs’ Automated Commercial Environment rejected the claim].

Before the CIT, Spirit argued that the language “For use in civil aircraft” which appears at a non-enumerated position in the tariff schedule, should be read as part of subheading 8803.30.0030, so that the statistical note would not begin with “other”. Judge Claire Kelly of the CIT disagreed, holding that 19 U.S.C. §1313(j)(5) does not implicate or include the numerically unaligned text between  the 8- and 10-digit levels of the tariff.

Judge Kelly noted that §1313(j)(5) refers to “article descriptions” “for the 8-digit HTS item number” and “the article description for that 10-digit statistical reporting number”, and concluded that the statute “refers to words describing the article adjacent to the 10-digit number”. She also held that “[t]he words ‘for that 10-digit statistical reporting number’ necessarily limit its description to the words adjacent to that number”.

The court noted that Spirit Aerosystems’ interpretation of the statute would create anomalies in other areas, for example, where the word “other” appears in non-enumerated levels in the tariff, or where the word “other” appears before statistical notes which describe specific goods.

Finally, Judge Kelly noted that one of the purposes of drawback modernization was to automate the drawback process, and that looking solely at 8- and 10- digit tariff subheadings promoted that goal. Customs has attempted to program its ACE drawback module to reject claims made under “other-other” provisions of the tariff (although imperfectly).

We suspect there is a high likelihood that the CIT’s decision will be appealed, but expect that Customs will be exploiting it aggressively.

Please contact a Neville Peterson professional if you have questions concerning this decisision or its impact on drawback claims.