Transcript CHAPTER I INTRODUCTION Classical Theories of International

CHAPTER XV DRAWBACK
 Types of Drawback
 Manufacturing Drawback
• Direct Identification Drawback
• Substitution Drawback
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 Rejected Merchandise Drawback
 Unused Merchandise Drawback
General Manufacturing Drawback Ruling
Specific Manufacturing Drawback Ruling
Evidence of Exportation
Filing for Drawback Claims
 Person Entitled to Receive Drawback
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DRAWBACK
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Refund, in whole or in part, of all ordinary
customs duties, internal revenue taxes and fees
paid for imported merchandise when it is
reexported or destroyed under the Customs
supervision
Antidumping and countervailing duties not
refundable
To encourage manufacturing in the U.S. and
American manufacturers can better compete in
international markets
Drawback claims must be filed with Customs
within 3 years after export. No automatic
drawback due to re-exports.
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DRAWBACK
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Firms who did not pay duties for imported dutypaid components directly to the U.S. Customs &
Border Protection (CBP) are also eligible with
CBP Form 7552, Delivery Certificate for Purposes
of Drawback from the importer of the same
components
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Manufacturing Drawback
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Manufactured article which incorporated
imported duty-paid components must be
exported before a drawback claim is filed.
However,
Refund of duties paid on materials and
equipment for vessels or aircraft for
foreign account can be filed even before
their exportation.
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Manufacturing Drawback
Direct Identification Manufacturing
Drawback
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A refund of duty paid on an imported article
which was used in the manufacture of an
exported article. Identification of imported
articles must be maintained.
Must be exported within 5 years after
importation of components
Manufacturing operations must take place
within three(3) years after receipt by
manufacturer of designated imported duty-paid
components
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Manufacturing Drawback
Substitution Manufacturing Drawback
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A refund of duty paid on an imported article
(designated article), when both imported dutypaid article and domestic article of same kind
and quality are used in manufacture of exported
articles. Components must be interchangeable
Enables manufacturer to obtain drawbacks
without expense of maintaining separate
inventories for imported & domestic articles
Must be used within 3 years from the receipt by
the manufacturer
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Rejected Merchandise Drawback
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A refund of duty paid on imported
merchandise found not conforming to
sample or specification or shipped without
the consent of the buyer, or defective.
Returned to customs within 3 years of
import and reexported or destroyed under
Customs supervision.
Required to provide Customs with
documents indicating reasons for
rejection
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Unused Merchandise Drawback
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A refund of duty paid on the imported
merchandise that was reexported or
destroyed without being used in the U.S.
Within 3 years of import
Drawback available for substituted
merchandise when
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reexported or destroyed,
if not used in the U.S. and
possessed by the same claimant.
Must be commercially interchangeable.
Determination of commercial
interchangeability must be obtained from U.S.
Customs
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General Manufacturing Drawback
Ruling (GMDR)
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Designed to simplify drawback procedures for
certain common manufacturing operations.
General manufacturing drawback rulings for
various products are contained in Appendix A to
Part 191-Drawback of CFR (Code of Federal
Regulations)
A manufacturer submits a letter of notification of
intent to operate under GMDR to any drawback
office.
Drawback office acknowledges it
Remain in effect indefinitely, unless no drawback
claim is filed for 5 years & notice of termination is
published in the Customs Bulletin.
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General Manufacturing Drawback
Ruling (GMDR)
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GMDR currently available for burlap,
components parts, flaxseed, fur skins,
orange juice, petroleum or its derivatives,
piece goods, steel, sugar
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Specific Manufacturing Drawback
Ruling (SMDR)
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A manufacture applies to the Customs & Border
Protection Headquarters for its approval for a
Specific Manufacturing Drawback Ruling, when
GMDR is not desirable.
Sample formats for application for Specific
Manufacturing Drawback Ruling are contained in
Appendix B to Part 191-Drawback of CFR
Duration of approved SMDR: The same as GMDR
Approval of SMDR application usually takes one
to two years
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Evidence of Exportation
1) Transport Documents of Export
2) Chronological Summary of Exports
3) Certified Notice of Exportation for Mail
Shipments
4) Notice of Lading for Supplies on certain
Vessels or Aircraft
5) Notice of Transfer for Articles to a Foreign
Trade Zone
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Filing for Drawback Claims
(1) Exporter must have an acknowledged General
Manufacturing Drawback Ruling or an approved
Specific Manufacturing Drawback Ruling
(2) Drawback Documents
• Drawback Entry, CBP Form 7551
• Delivery Certificate for Purposes of
Drawback, CBP Form 7552
• Notice of Intent to Export, Destroy, or Return
Merchandise for Purposes of Drawback, CBP
Form 7553
• Import Entry Numbers or Coding Sheet
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Evidence of exportation or destruction
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Filing for Drawback Claims
(3) Time of Filing
• Claims within 3 years after the date of
exportation of the articles which drawback is
claimed. No extension
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Person Entitled to Receive Drawback
(1) Exporter in the B/L, Air Waybill, Freight
Waybill or Cargo Manifest, unless
manufacturer reserves the right
(2) Manufacturer who reserves a right to
drawback if it is not an exporter
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Drawback must be filed by the claimant or
a licensed customs broker
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