Duty Drawback FAQ
Here you will find frequently asked questions regarding Duty Drawback
|What is Duty Drawback?|
|Duty drawback is a process that refunds duties paid on imported merchandise once that merchandise has been exported or destroyed.|
|What are the different types of duty drawback?|
Same Condition Drawback
Subsitution Manufacturing Drawback
|What is Manufacturing Drawback?|
|Manufacturing Drawback is for products that have been exported after being altered. Exported components must be directly identified to the imported component.|
|What is Same Conditon Drawback?|
|Same Condition Drawback (also known as unused) is for products that have been exported or destroyed without being modified in any way.
Substitution may be used for this type of drawback providing the export is not to Mexico or Canada.
For Same Condition Drawback, no drawback ruling is required but applicant should see a local Customs Drawback Branch (addresses listed below) prior to exportation of the unused articles to be claimed for drawback.
|What is Substitution Manufacturing Drawback?|
|Substitution Manufacturing Drawback is the same as manufacturing drawback, but you may substitue components of exported products with "commercially interchangeable" components.|
|What are Manufacturing Drawback Rulings?|
|To obtain drawback, a manufacturer or producer of articles intended to be claimed for drawback must first apply for a manufacturing drawback ruling. There are two types of manufacturing drawback rulings, General and Specific.|
|What is a General Manufacturing Ruling?|
|General manufacturing drawback rulings are designed to simplify drawback for certain common manufacturing operations. These rulings can be found in Appendix A to Customs Regulations 19 C.F.R. Part 191:|
General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) (T.D. 81-234; T.D. 83-123)
General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) or 1313(b) for Agents (T.D. 81-181)
General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) for Burlap or Other Textile Material (T.D. 83-53)
General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for Component Parts (T.D. 81-300)
General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) for Flaxseed (T.D. 83-80)
General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) for Fur Skins or Fur Skin Articles (T.D. 83-77)
General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for Orange Juice (T.D. 85-110)
General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for Petroleum or Petroleum Derivatives (T.D. 84-49)
General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for Piece Goods (T.D. 83-73)
General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for Raw Sugar (T.D. 83-59)
General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for Steel (T.D. 81-74)
General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for Sugar (T.D. 81-92)
General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) for Woven Piece Goods (T.D. 83-84)
A manufacturer or producer engaged in an operation that falls within a published general manufacturing drawback ruling may submit a letter of notification of intent to operate under that general ruling. Letters of notification of intent to operate under a general manufacturing drawback ruling must be submitted to any drawback office where drawback entries will be filed and liquidated, provided that the general manufacturing drawback ruling will be followed without variation. If there is any variation in the general manufacturing drawback ruling, the manufacturer or producer shall apply for a specific manufacturing drawback ruling under Section 191.8.
|What is a Specific Manufacturing Ruling?|
|When a manufacturer or producer cannot follow any one of the prescribed general manufacturing rulings without variation, the manufacturer or producer must apply for a specific manufacturing drawback ruling under Section 191.8.
Sample formats for specific manufacturing drawback rulings are contained in Appendix B to Part 191, Customs Regulations (19 C.F.R. Part 191).|
|What information do I need to provide in order to file a duty drawback claim?|
|The basis for a duty drawback claim is the import entry (import invoice and Custom form 7501) as these are duties being refunded. You will also need to provide your export details that correspond to the imported component or merchandise.|
|How long does it take to get my duty drawback refund?|
|The timing of your refund will vary depending on the filing method, and if you have Accelerated Payment Privileges.|
|What is Accelerated Payment?|
|The privilege to obtain accelerated payment of drawback, under certain conditions, is authorized by Section 192.72. Accelerated payment generally will insure that a claimant will receive his drawback no later than 2 months after he files
|How long do I have to file a drawback claim?|
|Claims must be filed within 3 years of exportation.
Manufacturing drawback - export must be within 5 years after importation of the components.
Same Condition Drawback - export must be within 3 years after importation of the merchandise.|
|What about exports to Canada and Mexico (NAFTA)?|
|Exports to Canada and Mexico must be directly identifed to the imported merchandise - unused substitution drawback (19 U.S.C. 1313(j)(2)) was eliminated as of January 1, 1994.
Under the NAFTA, the amount of Customs duties that will be refunded is the lesser of the total amount of Customs duties paid on the goods or materials when imported into the United States and the total amount of Customs duties paid on the finished good in the NAFTA country to which it is exported, for purposes of 19 U.S.C. §§1313(a), (b), (f), (h), and (g).
No NAFTA country, on condition of export, will refund, reduce or waive the following: antidumping or countervailing duties, premiums offered or collected pursuant to any tendering system with respect to the administration of quantitative import restrictions, tariff rate quotas or trade preference levels, or a fee pursuant to Section 22 of the U.S. Agricultural Adjustment Act.|
|What are the Export Procedures if I expect to claim drawback?|
|Exportation of articles for drawback purposes must be established by complying with one of the procedures provided for in Section 191.72 (in addition to providing prior notice of intent to export if applicable (§§ 191.35, 191.36, 191.42, and 191.91). Supporting documentary evidence must establish fully the date and fact of exportation and the identity of the exporter. The procedures for establishing exportation outlined by this section include, but are not limited to:|
Actual evidence of exportation consisting of documentary evidence, such as an originally signed bill of lading, air waybill, freight waybill, Canadian Customs manifest, and/or cargo manifest, or certified copies thereof, issued by the exporting carrier;
Export summary (§ 191.73);
Certified export invoice for mail shipments (§ 191.74);
Notice of lading for supplies on certain vessels or aircraft (§ 191.112); or
Notice of transfer for articles manufactured or produced in the U.S. which are transferred to a foreign trade zone (§ 191.183).
Export of qualified U.S.-made petroleum products may be shown by matching production at a specific refinery with exports of qualified petroleum products of the same kind and quality that occur within 180 days after the refinery produced the designated petroleum product.
Export of qualified imported petroleum products may be shown by matching the amount imported with exports of qualified petroleum products of the same kind and quality that occur within 180 days after the import. (Section 1313(p) drawback)
|What is a waiver of prior notice?|
|Companies that re-export their goods "unused" or in the "same condition" as when imported, must provide Customs with prior notice of their intent to export. Once notified, Customs may, at their discretion, physically examine the merchandise to both validate piece count and ensure the goods to be exported are the same goods that were originally imported.
Because drawback examinations often lead to delayed shipments and additional storage costs, many claimants will apply for a waiver of the prior notice requirement. Once a waiver is obtained, the claimant can export its goods at will and without notice to Customs.|
|I have already exported my merchandise, and do not have a waiver of prior notice. Can I still claim duty drawback?|
|For those companies that wish to claim drawback on historical exports where prior notice was not given, Customs will allow a claimant to reach back, on a one-time basis only, and claim drawback on any eligible export that is up to three years old. An application for a "one-time waiver " must be submitted to and approved by Customs before filing on historical exports.|