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Advanced Trade Finance & Special Customs Procedures

Inward Processing

Also known as: Inward Processing Relief

Inward processing is a customs regime that allows a manufacturer to import raw materials or components without paying duty, provided the resulting finished or processed goods are subsequently exported. By suspending or refunding duty on inputs that leave the country embodied in exports, the regime keeps domestic processors competitive on world markets and prevents them from being penalized for using imported materials. It requires authorization and careful accounting to reconcile imported inputs against exported outputs, and it is conceptually related to duty drawback, differing mainly in whether the duty is suspended up front or refunded after export.

The JFS takeLicensed customs broker · Filer 82G

Import, process, re-export, and relieve the duty. In the U.S. this is generally achieved through drawback or a foreign trade zone rather than a distinct regime — worth knowing the concept, because trading partners describe their own schemes this way and expect you to recognize it.

Where it matters for compliance

  • In the U.S. the equivalent relief usually comes via drawback or FTZ procedures.

Related terms

Outward ProcessingOutward processing is the mirror image of inward processing: it lets a company temporarily export goods for manufacturing, repair, or further processing abroad and then re-import the resulting products with duty charged only on the value added overseas, rather than on the full value of the returned goods.Duty DrawbackDuty drawback is a refund mechanism that returns most of the customs duties, taxes, and certain fees paid on imported goods when those goods, or articles manufactured from them, are subsequently exported or destroyed.Duty SuspensionDuty suspension, or deferral, refers to arrangements that postpone or hold in abeyance the payment of import duty while goods remain within a controlled customs status — for example in a bonded warehouse, a foreign trade zone, under an in-bond movement, or within a processing regime.

Reviewed by a licensed customs broker. Definitions are general information, not legal or customs advice for a particular shipment. Duty rates, tariff programs and agency requirements change frequently.