Drawback — Duty Refund Programs

Drawback is the refund (in whole or in part) of duties, taxes, and fees paid on imported merchandise that is subsequently exported or destroyed. The purpose is to encourage U.S. manufacturing and re-export activity by not penalizing companies that import materials for products ultimately leaving the country. Drawback claims are filed under 19 USC 1313 and processed under 19 CFR Part 190.

Key types include: (1) Manufacturing Drawback (19 USC 1313(a)/(b)) — for goods manufactured or produced in the U.S. using imported merchandise, then exported; (2) Unused Merchandise Drawback (19 USC 1313(j)(1)) — for imported goods exported in the same condition, unused; (3) Substitution Unused Merchandise Drawback (19 USC 1313(j)(2)) — using commercially interchangeable domestic goods in place of imported goods; (4) Rejected Merchandise Drawback (19 USC 1313(c)) — for defective or non-conforming imports returned to the seller.

Drawback claims must be filed within five years of the date of importation. The claimant must demonstrate a connection between the imported merchandise and the exported merchandise. Records must be maintained to prove the imported goods were used in the manufacture of or are the same goods as those exported. Accelerated payment is available for qualifying claimants who maintain good compliance records.