Your Reliable Partner in Drawback and Beyond

If imported merchandise is unused and exported or destroyed, 99% of the duties, taxes and fees paid upon export of those goods may be recoverable under drawback. 

Direct Identification Unused Merchandise Drawback under 19 U.S.C. 1313(j)(1) allows for drawback on exported merchandise that is traceable to imports.  This trace can be accomplished by a serial number or another unique number, or it may be through the use of an approved accounting methodology, such as First-In-First-Out (FIFO), Last-In-First-Out (LIFO), or Low-to-High.

Substitution Unused Merchandise Drawback under 19 U.S.C. 1313(j)(2) may allow for drawback if the exported merchandise is classifiable under the same Harmonized Tariff Schedule (HTS) number as the imported merchandise.  Domestic merchandise may also qualify under this provision.  Qualifications must be met in terms of the “Lesser Of” rule and basket provision HTS numbers.

Manufacturing drawback involves raw materials and component parts that are used to make new and different articles that are later exported.   The production process must result in a product with a new name, character, or use.

Direct Identification Manufacturing Drawback under 19 U.S.C 1313 (a) provides for drawback on duties from imported component parts utilized in the manufacture of the finished exported articles.  The components that make up the exported finished good must be traceable to imports, through a serial or unique number, or through an accepted accounting methodology.

Substitution Manufacturing Drawback under 19 U.S.C. 1313 (b) allows for drawback if the components of an exported finished good is classifiable under the same Harmonized Tariff Schedule (HTS) number as the imported components.  Domestic merchandise may also qualify under this provision.  Qualifications must be met in terms of the “Lesser Of” rule.

Rejected Merchandise Drawback under 19 U.S.C. 1313 (c) provides for drawback that is the subject of rejection.  Rejection drawback is defined into four main categories when merchandise is:

• Not conforming to sample or specifications
• Shipped without the consent of the consignee
• Determined to be defective as of the time of importation or
• Ultimately sold at retail by the importer, or the person who received the merchandise from the importer, and for any reason returned to and accepted by the importer, or the person who received the merchandise from the importer.