FAR 25.9—Subpart 25.9

Scope of subpart.

FAR 25.900 is the scope statement for the subpart on duty-free entry, and it tells readers that the subpart’s policies and procedures are aimed at exempting certain supplies purchased under Government contracts from import duties. In practical terms, this section does not itself create the exemption or set the detailed mechanics; instead, it identifies the subject matter covered by the subpart and signals that the rules apply when the Government is buying supplies that may be imported into the United States. The section matters because import duties can materially affect total contract cost, delivery planning, and compliance obligations for both the Government and contractors. It also frames the later provisions in the subpart, which address when duty-free treatment is available, how it is claimed, and how contracting personnel and contractors should handle imported supplies under covered contracts. For contractors, the significance is that potential duty savings may exist, but only if the contract and the imported items fit within the subpart’s requirements. For contracting officers and acquisition personnel, the section establishes that they must look to this subpart when a procurement may involve imported supplies and possible duty exemptions.

Policy.

FAR 25.901 states the basic policy for using customs-duty exemptions on foreign supplies imported into the customs territory of the United States. It explains that U.S. laws impose duties on imported foreign supplies, but that certain exemptions are available to Government agencies. The section’s purpose is to ensure agencies do not pay customs duties unnecessarily when an exemption can be used. At the same time, it recognizes that claiming an exemption is not free: agencies must consider the administrative burden and documentation required to process the exemption. In practice, this means contracting and logistics personnel must weigh the expected duty savings against the cost and effort of compliance before deciding whether to use an exemption. The section is a cost-saving rule, but it also creates a documentation and process-management obligation for agencies.

Procedures.

FAR 25.902 explains how imported supplies bought under Government contracts are handled at the border and how customs duties apply. It directs readers to the U.S. Customs Regulations in 19 CFR chapter 1 for the actual importation and duty rules, and it makes clear that, unless a specific customs exception applies under 19 CFR 10.100, imported supplies purchased for Government contracts must go through the normal customs entry and examination process. The section also states that these shipments are subject to duty unless the agency secures an exemption under FAR 25.903. In practice, this means contracting personnel and contractors cannot assume that Government purchase automatically avoids customs formalities or duty liability. The section exists to coordinate federal procurement with customs law, prevent improper duty treatment, and ensure imported contract supplies are processed correctly at entry.

Exempted supplies.

FAR 25.903 explains two related customs-duty exemptions that can apply to supplies acquired under Government contracts. First, it points to the Harmonized Tariff Schedule of the United States (HTSUS), specifically Subchapters VIII and X of Chapter 98, which identify categories of supplies that may enter the customs territory of the United States duty-free when imported for Government contract purposes. It also explains that, for some of those HTSUS-listed items, the contracting agency must certify to U.S. Customs and Border Protection that the supplies are being imported for the specific purpose required by the tariff provision, using the procedures and formats in the cited customs and trade regulations. Second, it addresses supplies other than equipment for Government-operated vessels or aircraft, which may be withdrawn duty-free and free of internal revenue tax from customs-bonded warehouses, continuous customs custody, or foreign-trade zones under 19 U.S.C. 1309 and 1317. In practice, this section matters because it determines when the Government can avoid paying customs duties and certain taxes, but only if the correct legal authority is identified and the required customs documentation and certifications are completed accurately and on time.