252.225-7013 Duty-Free Entry.

As prescribed in 225.1101 (4), use the following clause:

Duty-Free Entry (NOV 2023)

(a) Definitions.As used in this clause—

“Component,” means any item supplied to the Government as part of an end product or of another

component.

“Customs territory of the United States” means the 50 States, the District of Columbia, and Puerto

Rico.

“Eligible product” means—

(1) “Designated country end product,” as defined in the Trade Agreements (either basic or alternate)

clause of this contract;

(2) Free Trade Agreement country end product, other than a Bahraini end product, a Moroccan end

product, a Panamanian end product, or a Peruvian end product, as defined in the Buy

American—Free Trade Agreements—Balance of Payments Program (either basic or alternate II)

clause of this contract; or

(3) Free Trade Agreement country end product other than a Bahraini end product, Korean end

product, Moroccan end product, Panamanian end product, or Peruvian end product, as defined in

the Buy American—Free Trade Agreements—Balance of Payments Program (either alternate IV or

alternate V) clause of this contract.

“Qualifying country” and “qualifying country end product” have the meanings given in the Trade

Agreements clause, the Buy American and Balance of Payments Program clause, or the Buy

American—Free Trade Agreements—Balance of Payments Program clause of this contract, basic or

alternate.

(b) Except as provided in paragraph (i) of this clause, or unless supplies were imported into the

customs territory of the United States before the date of this contract or the applicable subcontract,

the price of this contract shall not include any amount for duty on—

(1) End items that are eligible products or qualifying country end products;

(2) Components (including, without limitation, raw materials and intermediate assemblies) produced

or made in qualifying countries, that are to be incorporated in U.S.- made end products to be

delivered under this contract; or

(3) Other supplies for which the Contractor estimates that duty will exceed $300 per shipment into

the customs territory of the United States.

(c) The Contractor shall—

(1) Claim duty-free entry only for supplies that the Contractor intends to deliver to the Government

under this contract, either as end items or components of end items; and
(2) Pay duty on supplies, or any portion thereof, that are diverted to nongovernmental use, other

than—

(i) Scrap or salvage; or

(ii) Competitive sale made, directed, or authorized by the Contracting Officer.

(d) Except as the Contractor may otherwise agree, the Government will execute duty-free entry

certificates and will afford such assistance as appropriate to obtain the duty-free entry of supplies—

(1) For which no duty is included in the contract price in accordance with paragraph (b) of this

clause; and

(2) For which shipping documents bear the notation specified in paragraph (e) of this clause.

(e) For foreign supplies for which the Government will issue duty-free entry certificates in

accordance with this clause, shipping documents submitted to Customs shall—

(1) Consign the shipments to the appropriate—

(i) Military department in care of the Contractor, including the Contractor's delivery address; or

(ii) Military installation; and

(2) Include the following information:

(i) Prime contract number and, if applicable, delivery order number.

(ii) Number of the subcontract for foreign supplies, if applicable.

(iii) Identification of the carrier.

(iv)(A) For direct shipments to a U.S. military installation, the notation: “UNITED STATES

GOVERNMENT, DEPARTMENT OF DEFENSE Duty-Free Entry to be claimed pursuant to Section

XXII, Chapter 98, Subchapter VIII, Item 9808.00.30 of the Harmonized Tariff Schedule of the United

States. Upon arrival of shipment at the appropriate port of entry, District Director of Customs,

please release shipment under 19 CFR Part 142 and notify Commander, Defense Contract

Management Agency (DCMA), St. Louis, MO, ATTN: Duty Free Entry Team, 1222 Spruce Street,

Room 9.300, St. Louis, MO 63103-2812, for execution of Customs Form 7501, 7501A, or 7506 and

any required duty-free entry certificates.”

(B) If the shipment will be consigned to other than a military installation, e.g., a domestic

contractor's plant, the shipping document notation shall be altered to include the name and address

of the contractor, agent, or broker who will notify Commander, DCMA New York, for execution of

the duty-free entry certificate. (If the shipment will be consigned to a contractor’s plant and no dutyfree entry certificate is required due to a trade agreement, the Contractor shall claim duty-free entry

under the applicable trade agreement and shall comply with the U.S. Customs Service requirements.

No notification to Commander, DCMA New York, is required.)

(v) Gross weight in pounds (if freight is based on space tonnage, state cubic feet in addition to gross

shipping weight).

(vi) Estimated value in U.S. dollars.
(vii) Activity address number of the contract administration office administering the prime contract,

e.g., for DCMA Dayton, S3605A.

(f) Preparation of customs forms.

(1)(i) Except for shipments consigned to a military installation, the Contractor shall—

(A) Prepare any customs forms required for the entry of foreign supplies into the customs territory

of the United States in connection with this contract; and

(B) Submit the completed customs forms to the District Director of Customs, with a copy to DCMA

NY for execution of any required duty-free entry certificates.

(ii) Shipments consigned directly to a military installation will be released in accordance with

sections 10.101 and 10.102 of the U.S. Customs regulations.

(2) For shipments containing both supplies that are to be accorded duty-free entry and supplies that

are not, the Contractor shall identify on the customs forms those items that are eligible for duty-free

entry.

(g) The Contractor shall—

(1) Prepare (if the Contractor is a foreign supplier), or shall instruct the foreign supplier to prepare,

a sufficient number of copies of the bill of lading (or other shipping document) so that at least two of

the copies accompanying the shipment will be available for use by the District Director of Customs

at the port of entry;

(2) Consign the shipment as specified in paragraph (e) of this clause; and

(3) Mark on the exterior of all packages—

(i) “UNITED STATES GOVERNMENT, DEPARTMENT OF DEFENSE”; and

(ii) The activity address number of the contract administration office administering the prime

contract.

(h) The Contractor shall notify the Administrative Contracting Officer (ACO) in writing of any

purchase of eligible products or qualifying country supplies to be accorded duty-free entry, that are

to be imported into the customs territory of the United States for delivery to the Government or for

incorporation in end items to be delivered to the Government. The Contractor shall furnish the

notice to the ACO immediately upon award to the supplier and shall include in the notice—

(1) The Contractor’s name, address, and Commercial and Government Entity (CAGE) code;

(2) Prime contract number and, if applicable, delivery order number;

(3) Total dollar value of the prime contract or delivery order;

(4) Date of the last scheduled delivery under the prime contract or delivery order;

(5) Foreign supplier's name and address;

(6) Number of the subcontract for foreign supplies;
(7) Total dollar value of the subcontract for foreign supplies;

(8) Date of the last scheduled delivery under the subcontract for foreign supplies;

(9) List of items purchased;

(10) An agreement that the Contractor will pay duty on supplies, or any portion thereof, that are

diverted to nongovernmental use other than—

(i) Scrap or salvage; or

(ii) Competitive sale made, directed, or authorized by the Contracting Officer;

(11) Country of origin; and

(12) Scheduled delivery date(s).

(i) This clause does not apply to purchases of eligible products or qualifying country supplies in

connection with this contract if—

(1) The supplies are identical in nature to supplies purchased by the Contractor or any subcontractor

in connection with its commercial business; and

(2) It is not economical or feasible to account for such supplies so as to ensure that the amount of

the supplies for which duty-free entry is claimed does not exceed the amount purchased in

connection with this contract.

(j) The Contractor shall—

(1) Insert the substance of this clause, including this paragraph (j), in all subcontracts for—

(i) Qualifying country components; or

(ii) Nonqualifying country components for which the Contractor estimates that duty will exceed $200

per unit;

(2) Require subcontractors to include the number of this contract on all shipping documents

submitted to Customs for supplies for which duty-free entry is claimed pursuant to this clause; and

(3) Include in applicable subcontracts—

(i) The name and address of the ACO for this contract;

(ii) The name, address, and activity address number of the contract administration office specified in

this contract; and

(iii) The information required by paragraphs (h)(1), (2), and (3) of this clause.

(End of clause)

Parent topic: 252.225 RESERVED