How Do You Calculate the Export VALUE of an Overhauled Aircraft Part?

If you are exporting an overhauled civil aircraft part, then how do you calculate the value of the export?

The value of an export must be reported as part of the electronic export information (EEI) that is required by the regulations.  15 C.F.R. § 30.6(a)(17).  When you sell a unit, the value is easy to calculate – your sales price is the export value (although that “value” may have to be adjusted, as discussed below).  But when you are exporting an overhauled unit, your value may be different from this general rule.

It is most convenient for us to address this issue as three different types of transactions, each of which has a different value calculation:

(1) A part that has been imported into the United States for overhaul and is now being exported again (e.g. back to the owner).

(2) A part that has been imported into the United States for warranty repair or overhaul and is now being exported again (e.g. back to the owner) [in which the warranty covers some or all of the price of the work].

(3) A part that originated in the US as an overhauled part and then is subsequently exported as an overhauled part.

In the first case, where a part that has been sent to the US for overhaul is now being exported again to the sender, you need to have reported the article as a part imported for repair purposes at the time it was imported.  Then, when you export it back to the sender you can use Schedule B classification commodity number 9801.10.000 and you can report the export value in the EEI as the value of parts and labor from the overhaul (the value of the original unit shall not be included in the reported value).  15 C.F.R. § 30.29(a).

But if the part was sent back for warranty repair, and there is no charge for the parts and labor, then the value of the replacement parts (alone) should be reported.  15 C.F.R. § 30.29(b)(2).  There is no need to report the value of the warranty labor.  The bill of lading, manifest, air waybill, or other commercial-loading document (wherever you write the International Transaction Number, or ITN) should state: “Product replaced under warranty, value for EEI purposes.” Id.

In the third case shown above, where a part that originated in the US as an overhauled part is then subsequently exported as an overhauled part, you would report the full value of the part. If you bought the article overhauled in the US then the value is the sales price to your foreign customer. 15 C.F.R. § 30.6(a)(17)(i). If you are exporting it without a sale (e.g. for consignment to your foreign warehouse) then the value reported on the EEI is the fair market value of the overhauled article. Id.

You are supposed to adjust the EEI-reported value by adding the cost of shipping the part from the US point of origin to the port of export (costs will include freight and insurance). 15 C.F.R. § 30.6(a)(17)(ii)(A). If the part is sold at a “delivered price” (so the exporter is paying all shipping costs), then the exporter should subtract the shipping costs from the point of export to the customer (so value is adjusted downward for those post-export shipping charges). 15 C.F.R. § 30.6(a)(17)(ii)(C).

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About Jason Dickstein
Mr. Dickstein is the President of the Washington Aviation Group, a Washington, DC-based aviation law firm. He represents several aviation trade associations, including the Aviation Suppliers Association, the Aircraft Electronics Association, the Aircraft Fleet Recycling Association and the Modification and Replacement Parts Association.

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