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99% duty refunds with U.S. Duty Drawback - How?

CBP duty relief programs offer some welcomed customs duty relief with a programme called U.S. Duty Drawback. We look at what it is and how it can benefit U.S. companies.


Content

I Introduction to U.S. Duty Drawback

II Benefits of U.S. Duty Drawback

III Challenge of U.S. Duty Drawback

IV Changes in U.S. Duty Drawback

V U.S. Duty Drawback in the Automated Commerical Environment (ACE)

VI Our Recommendation for leveraging the U.S. Duty Drawback advantages

VII Our U.S. Duty Drawback Services

More Information & Links

Save money with U.S. duty drawback
Save money with U.S. duty drawback

I Introduction to U.S. Duty Drawback

Duty Drawback is a refund from the U.S. Customs Service for 99% of the duties paid on imported items that are subsequently exported or used in the manufacture of exported goods. This refund is available to you even if someone else did the importing. It’s estimated that over $600 million dollars is recovered annually through the U.S. Duty Drawback program, and companies are paying 20% of those refunds to service providers that help get the refund from the government. U.S. Customs estimates that up to 85% of potential duty drawback is not being claimed each year.


II Benefits of U.S. Duty Drawback

You will be able to compete more effectively with foreign corporations for business in foreign countries if you make it so that you are not required to include the cost of import duties in your costs.


III Challenges of U.S. Duty Drawback

However, the drawback is recognized as the most complex commercial program Customs and Border Protection (CBP) administers because it involves every aspect of Customs business, including both imports and exports.


Historically, drawback relied on subjective analysis of “commercial interchangeability” making it difficult for many companies to take advantage of substituted merchandise.


Companies must prove that imported goods were exported or destroyed, and maintain supporting records to prove eligibility and compliance.


Most companies prefer to hire the services of a professional Customs Manager like the experts at Customs Manager Ltd to assist in the implementation of a process that reconciles the import and export records and ensures the accuracy of the claims. We are a specialized service provider and have the expertise required to prepare and file the claims.


IV Changes in U.S. Duty Drawback

Several events have brought drawbacks to the forefront of trade. For years, Drawback has been undergoing a modernization effort by U.S. policymakers and Customs. The Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA) brought significant changes to Duty Drawback policy and implementation:

  • Streamlined product substitution rules; goods interchangeable at the 8-digit HTS level (with some exceptions)

  • Simplified filing time frame (5 years from import)


V U.S. Duty Drawback in the Automated Commerical Environment (ACE)

Modernization of Duty Drawback also includes the implementation of claim filing within the fully electronic environment of U.S. Customs: the Automated Commerical Environment (ACE).

Using ACE may allow companies to file more quickly and give Customs the ability to process claims quicker, but also gives Customs the resources to audit claims more broadly and deeply. Electronic filing may have a levelling effect on the playing field in terms of increasing access to drawback, but at the same time, makes it more difficult for companies to back up claims and recover duties.

The implementation of U.S. drawback into ACE means that companies are asking their brokers to support drawback filing, and the “streamlining” of commercial interchangeability rules means that vendors can more easily provide standardized solutions to process certain types of drawback claims.

VI Our Recommendation for leveraging the U.S. Duty Drawback advantages

An organisation interested in drawback should first examine its imports and exports to determine any potential opportunities for duty refunds. They might be able to profit from unsold goods, rejected goods, or manufacturing flaws. The devil is in the details when it comes to creating drawback claims. Whatever the drawback, businesses will need to put forth the effort to figure out how to match exports against imports using one of the recognised methods, such as Direct ID or Substitution. The Harmonised Tariff Schedule goods description and limitations imposed by specific trade agreements are among the additional checks that must be made to administer the TFTEA substitution rules, which can be challenging. As part of the new electronic filing workflow, claimants will also need to provide evidence of how the goods are matched up and build audit trails to support Customs audits, which are almost certain to occur.


Companies will also have to decide how to control the internal drawback process. The majority will fall somewhere in the middle, with some attempting to handle the work internally and others completely outsourcing to service providers. A combination of internal drawback expertise, claim opportunities, supplier relationships, supply chain maturity, and systems in place to support the process are examined to determine the right mix for your company.


VII Our U.S. Duty Drawback Services

Duty Drawback Service from Customs Manager Ltd

Even if the goods were not imported or made by you, you are still entitled to claim duty drawback on your exports. We can examine your situation to see if you qualify and assist you in finding more free opportunities for U.S. drawback recovery.


1. Assessment of Duty Drawback Eligibility (Free)

Find out if your business qualifies for duty drawback and receive a rough estimate of the refund you might be entitled to.


2. Drawback Management and Filing

Let us handle the time-consuming task of filing duty drawback on your behalf to save your valuable internal resources.


3. Setting up and submitting a duty drawback application

Our specialists will gather all the paperwork required to submit an application for the duty drawback programme as well as instruct your staff on U.S. Customs record-keeping requirements.


3. Refunds for expedited drawbacks

Improve the speed at which your duty drawback refunds are processed. Instead of the usual wait time of 1-3 years, you might get your refund within 4–8 weeks of filing your claim.


VIII Meet The U.S. Duty Drawback Specialists at Customs Manager Ltd

Our drawback specialists will work alongside you throughout the record-keeping, managed document workflows, and application processes for drawback privileges and claim filing. As well as developing and managing your drawback implementation and annual auditing, we'll also design training programmes for your staff. Our team is equipped with the knowledge and skills necessary to respond to inquiries regarding drawbacks from a range of American industries.


What we do

  • aid in identifying potential drawbacks

  • Gather, examine, and prepare the documents provided by your forwarding partners.

  • Track drawback claims, money that has been recovered, and liquidations.

  • Improve the processing time for your refunds. Instead of waiting the customary 1-3 years, get your money back within 4-8 weeks of submitting your claim.

  • Offer duty drawback programmes that include ongoing training and education.

  • Conduct a yearly drawback audit.

Get in touch to discuss how we can help by emailing info@customsmanger.org or schedule a free expert call at www.customsmanager.org -> Book Expert Call - top right corner.

More Information & Links



U.S: Cargo Systems Messaging Service - Latest Update

U.S. Customs and Border Protection (CBP) uses the Cargo Systems Messaging Service (CSMS) to notify trade partners on the Automated Commercial Environment (ACE). Get the latest updates.


US: Newest Customs Bulletin Weekly & Decisions

The U.S. Customs and Border Protection, U.S. Court of Appeals for the Federal Circuit, and U.S. Court of International Trade publish a weekly collection of judgements, rulings, rules, notifications, and abstracts pertaining to customs and related subjects.

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