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Unused Merchandise Drawback | N.F. Stroth & Associates

Unused Merchandise Drawback

Unused merchandise drawback is provided for in subsection (j) of the drawback law 19 U.S.C. 1313(j). Drawback is available when imported merchandise is exported or destroyed within 3 years of import without being used domestically.

Drawback may also be granted on domestic or other merchandise, which is commercially interchangeable with the imported merchandise, and can be substituted for the imported merchandise.

The "unused merchandise" drawback provision requires that the product not have been put to its intended use in the United States, and Customs rulings have applied that restriction stringently. If a product is so defective or non-conforming as to be incapable of use, the importer may claim unused merchandise drawback. But if the product is put to its intended use and found unsatisfactory, the fact that it has been used at all prevents the importer from claiming unused merchandise drawback.

While the law no longer requires that the merchandise be in the "same condition" as when imported in order to claim this type of drawback (i.e., physical deterioration, as opposed to use, will not defeat the drawback claim), the law does continue to require that the merchandise be unused.