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Duty Drawback

Each year approximately $20 billion in duty is collectively paid by over 300,000 importers to the U. S. Government. Roughly $1.5 to $2.3 billion of this total is available for refund. (U.S. Customs Estimates) However, only $550 million is recovered. Consequently, hundreds of millions of dollars are going unclaimed year after year. These refunds are known as "duty drawback".

Duty Drawback refunds import duties paid to Customs at the time of entry (paid by you or a supplier). Ninety nine percent (99%) of these duties can often be recovered by those who subsequently export the merchandise. Our fees are collected as a percentage of the total refunds issued to our clients by Customs.

Our approach to obtaining refunds for our clients begins with the filing of applications with the Drawback Liquidation Branch. As a National permit holder, ClearPoint International can process your drawback claims at any one of the Drawback Liquidation Branch across the Nation. The applications enable us to file drawback claims and to obtain a refund in an accelerated fashion.

ClearPoint International is pleased to assists your drawback needs in:
Unused Merchandise.
Substitution Unused.
Rejected Merchandise.

 

Duty Drawback Background

Drawback is a refund of ordinary duties or taxes paid on items imported into the United States. This refund is made following the items’ exportation or destruction. Its purpose is to stimulate American manufacturing and commerce by allowing U.S. businesses to compete in export markets without having to include import duties and taxes in their foreign sales prices. During FY98, $528 million was refunded.

There are three principal types of drawback, each with variations and different requirements. Several types of drawback are authorized under Section 1313, Title 19, United States Code (U.S.C.). Specifically, the following two drawback methods will be applicable for most companies:

Unused merchandise allows drawback on articles that are not put to use while they are in the United States. Rejected merchandise allows drawback on items that do not meet the importer’s specifications or are found to be defective at the time of importation.

The filing of the drawback entry will consist of the submission of Customs Form (CF) 7551. The form will be completed and prepared by ClearPoint as per Customs guidelines, detailing all of the import transactions for which your company wishes to claim drawback on. The form will be filed either manually or electronically with Customs. Each import transaction may constitute the filing of its own drawback entry. Each entry may or may not require supporting documents to be submitted to Customs along with the claim. Supporting documents may include import and / or export commercial invoices, customs entry forms, waybills, and packing lists. As many entries will be filed as needed in order to claim drawback for all qualifying export transactions. A Customs single transaction bond, drawback bond, will accompany each claim.

Articles which have subsequently been exported for which proper documentation can be gathered to substantiate such a claim:

Submit and File Prior Notice of Intent to Export Waiver Application.
Submit and File Commercial Interchangability Application.
Submit and File Future Notice of Intent to Export Waiver Application.
Submit and File Accelerated Payment Application.
Gather and Create Import vs. Export Database.
Implement Procedures & Policies For Filing All Future Duty Drawback Claims.
Reconcile All Import & Export Documents.
Submit and File Duty Drawback Entries with US Customs.

The NAFTA provisions on drawback apply to goods imported into the United States (and subsequently exported to Canada) after January 1, 1996. The NAFTA provisions on drawback also apply to goods imported into the United States and subsequently exported to Mexico on or after January 1, 2001.

For purposes of 19 U.S.C. 1313(a),(b),(f),(h),(p), and (q), an article exported to a NAFTA country is an item that may be subject to NAFTA duty drawback. In most cases, the amount of Customs duties that will be refunded, reduced or waived is the lesser of either:

The total amount of Customs duties, taxes and certain fees paid or owed on the goods imported into the United States, or;
The total amount of Customs duties paid on the finished goods imported into the NAFTA country.

A NAFTA drawback claim filed under NAFTA drawback requirements in 19 CFR 181, in addition to the regulatory requirements of 19 CFR 191, must be filed separately from any drawback claim filed under Section 191 of the Customs Regulations.

 

Merchandise Processing Fee (MPF) Refund

Merchandise that is formally entered or released is subject to the payment to Customs of an ad valorem fee of 0.21 percent. This fee is identified as a merchandise-processing fee (MPF). The fee shall be based on the value of the merchandise and shall not exceed $485 and shall not be less than $25. As a result of the Texport decision, Customs has been directed to refund the MPF. As such, when plausible, MPF will be requested to be refunded on all drawback claims. The amount of MPF to be refunded will be done so on a relative accounting method.