Are you getting the full drawback refund that you are eligible for?

Drawback Basics

Types of Drawback

Manufacturing Drawback

  • 99% back on merchandise that is used to manufacture an article exported or destroyed within 5 years. §§191.21-28

Substitution Manufacture Drawback

  • 99% back when domestic or other merchandise of the same kind and quality as the imported merchandise is used to manufacture the exported or destroyed article. §191.22
  • The record keeping requirements are simplified as exported or destroyed articles need only be traced back to a common inventory of imported and domestic merchandise.
  • Requires use in manufacturing of both imported and substituted merchandise within 3 years of receipt of the imported merchandise. Also 5 time limit for exportation.
  • Must operate under a general manufacturing drawback ruling, published by CBP, or a specific manufacturing drawback ruling submitted to and approved by CBP.
  • The ruling specifies the manufacture and record keeping procedures. See part 191 app A, B.

Rejected Merchandise 

  • Available when imported merchandise:
    • Does not conform to sample or specifications.
    • Was shipped without consent.
    • Is determined to be defective as of the time of import, and such merchandise is returned to CBP’s custody within three years of the date of import.
  • The merchandise must be exported or destroyed after notifying CBP of the intent to do so and giving CBP the opportunity to inspect the merchandise. §191.41-44
  • Must show to the satisfaction of CBP that: §191.4
    • Merchandise was defective or;
    • Was not in accordance with sample or specifications or;
    • Was shipped without consent.
  • Alternatively, it may be claimed on basis of new importations U.S.C §1313(c)(2)
    • Within 1 year of destruction or return.
    • Same kind of merchandise.

Unused Merchandise

  •  Available when unused merchandise is exported or destroyed within 3 years of import without being used in the US. §§191.31-37

Petroleum Derivative

  • Available when certain petroleum derivatives are imported and at least the same quantity of a petroleum derivate is exported 180 days of import.

Other Kinds of Drawback

  • Includes a wide range of drawbacks addressing a wide range of specific situations. Including:
    • Imported materials used for the construction of vessels built for foreign ownership. §191.31-33
    • Refund on imported packaging material used in connection with drawback operations. §191.13
    • Refund on internal revenue taxes for exported flavoring extracts, medicinal or toiletry preparations (including perfume), bottled distilled spirits, and wines manufactured or produced in the United States. §191.101-106
    • Refund of internal revenue taxes on unmerchantable or nonconforming imported distilled spirits, wines, or beer.
Drawback Claim and Entry Procedures
  • Claims (drawback entries) 
    •  Are Filed at 1 of 4 drawback offices electronically.
      • Chicago, IL
      • Houston, TX
      • Newark, NJ
      • San Francisco, CA
  • A complete claim must be filed 3 years of exportation or destruction. §191.51
    •  Consisting of:
      •  CF-7551
      • Applicable certificates of: §191.51-53
        • Manufacture.
        • Delivery. (when there transfers between parties in U.S.)
        • Applicable notices of intent to export, destroy, or return.
      • Import entry numbers.
      • Evidence of exportation or destruction.
      • Other documentation specific to the kind of drawback.
      • Subject to right to make entry limitations, regarding who can claim. §191.6
      • Subject to verification by CBP. §191.61-62
      • Liquidation is subject to notice and time requirements. similar to entry. §191.81-8
    • Denials are subject to protest. 
    • Eligible for accelerated payment under special bond. §§113.65 191.92
Other Duty Saving METHODS
  1. Temporary Imports.
  2. Temporary Importation Under Bond.
  3. CBP Bonded Warehouse.