Drawback: Instructional Video for New Drawback Filers Describing the Methods for Filing a Claim in ACE

The Office of Trade, Trade Policy and Programs, has developed a brief instructional video for first-time drawback filers on how to file a claim in ACE. The video can be found on CBP.gov at: First Time Drawback Filer Reminders | U.S. Customs and Border Protection (cbp.gov)

Agreement Between the United States of America, the United Mexican States, and Canada (USMCA) Implementing Regulations Related to the Marking Rules, Tariff-Rate Quotas, and Other USMCA Provisions

On July 6, 2021, U.S. Customs and Border Protection published in the Federal Register (86 FR 35566) Agreement Between the United States of America, the United Mexican States, and Canada (USMCA) Implementing Regulations Related to the Marking Rules, Tariff-Ratehttps://www.govinfo.gov/content/pkg/FR-2021-07-06/pdf/2021-14264.pdf Quotas, and Other USMCA Provision.

Trade Policy Update: USMCA Drawback Deployment Update

Effective March 17, 2021, the trade community can begin filing USMCA Drawback Claims in ACE.

As a reminder, claimants with Accelerated Payment (AP) privileges will not be able to obtain AP on USMCA Drawback claims until all of the applicable regulations are implemented (however, claims filed under NAFTA and same condition drawback will remain eligible for AP).

Claimants should submit their USMCA Drawback claims without the AP indicator in ACE, even if they are approved for AP. If the claimant transmits a USMCA Drawback claim through ACE containing the AP indicator, prior to the effective date of the USMCA regulations, the claim will be accepted but AP will be removed from the claim and this informational message will be returned: “I587-NO AP UNTIL USMCA REGS EFFECTIVE.” Please note a future CSMS message will announce when applicable regulations are implemented and AP eligible claims can be resubmitted with the AP indicator for USMCA Drawback.

As USMCA Drawback claims are accepted in ACE, all USMCA Drawback claims processing will be on hold pending the implementation of the USMCA Drawback regulations.

Please note that the Drawback Error Dictionary will be updated to reflect the new error message (I587). A CSMS will be sent when the update is published.

For any questions regarding this deployment, please contact the following:

Policy questions: Drawback: OTDRAWBACK@cbp.dhs.gov

Technical questions: Entry Summary and Revenue: ESAR@cbp.dhs.gov

Drawback Policy Website: https://www.cbp.gov/trade/programs-administration/entry-summary/drawback-overview.

CBP's Risk Management for Tariff Refunds Should Be Improved, Says Report

Since 1789, the U.S. government's drawback program has encouraged manufacturing and exports by refunding certain customs duties. For example, a merchant who paid duties on imported fabric, made it into clothes, and then exported the clothes could claim a refund for import duties paid. The program refunds about $1 billion a year.

However, the Government Accountability Office found problems in how CBP checks these claims. For example, CBP's new electronic records system doesn't include enough details on exports. CBP must manually check claims but currently isn't doing so. It could be issuing refunds it shouldn't issue.

Read the report HERE.

Modernized Drawback

On August 2, 2018, U.S. Customs and Border Protection published in the Federal Register (83 FR 37886) Modernized Drawback

SUMMARY: This document proposes to amend U.S. Customs and Border Protection (CBP) regulations to implement changes to the drawback regulations as directed by the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA). These proposed regulations establish a new process for drawback pursuant to TFTEA which liberalizes the merchandise substitution standard, simplifies recordkeeping requirements, extends and standardizes timelines for filing drawback claims, and requires the electronic filing of drawback claims. TFTEA allows a transition period wherein drawback claimants will have the choice between filing claims under the existing process detailed in the current regulations or filing claims under the proposed new process. This document explains how filings during the transition period will work, discusses the interim policy guidance procedures for filing claims prior to these regulations becoming final, and proposes to make TFTEA-related changes, dealing with bonds, regarding joint and several liability for the importer of the goods and the drawback claimant, and technical corrections and conforming changes to CBP regulations. This document also proposes to clarify the prohibition on the filing of a substitution drawback claim for internal revenue excise tax paid on imported merchandise in situations where no excise tax was paid upon the substituted merchandise; or the substituted merchandise is the subject of a different claim for refund or drawback of tax under any provision of the Internal Revenue Code. CBP is proposing these amendments regarding excise taxes to protect the revenue by clarifying the relationship between drawback claims and Federal excise tax liability. Further, CBP proposes to add a basic importation and entry bond condition to foster compliance.

Customs Modernized Drawback

On August 2, 2018, U.S. Customs and Border Protection published in the Federal Register (83 FR 37886) Modernized Drawback

SUMMARY: This document proposes to amend U.S. Customs and Border Protection (CBP) regulations to implement changes to the drawback regulations as directed by the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA). These proposed regulations establish a new process for drawback pursuant to TFTEA which liberalizes the merchandise substitution standard, simplifies recordkeeping requirements, extends and standardizes timelines for filing drawback claims, and requires the electronic filing of drawback claims. TFTEA allows a transition period wherein drawback claimants will have the choice between filing claims under the existing process detailed in the current regulations or filing claims under the proposed new process. This document explains how filings during the transition period will work, discusses the interim policy guidance procedures for filing claims prior to these regulations becoming final, and proposes to make TFTEA-related changes, dealing with bonds, regarding joint and several liability for the importer of the goods and the drawback claimant, and technical corrections and conforming changes to CBP regulations. This document also proposes to clarify the prohibition on the filing of a substitution drawback claim for internal revenue excise tax paid on imported merchandise in situations where no excise tax was paid upon the substituted merchandise; or the substituted merchandise is the subject of a different claim for refund or drawback of tax under any provision of the Internal Revenue Code. CBP is proposing these amendments regarding excise taxes to protect the revenue by clarifying the relationship between drawback claims and Federal excise tax liability. Further, CBP proposes to add a basic importation and entry bond condition to foster compliance.

CBP to Require ACE for Electronic Drawback and Duty Deferral

Effective July 8, 2017, the Automated Commercial Environment ("ACE") will be the sole Customs and Border Protections ("CBP")-authorized Electronic Data Interchange ("EDI") system for processing electronic drawback and duty deferral entry and entry summary filings, and the Automated Commercial System ("ACS") will no longer be a CBP-authorized EDI system for processing these filings.

CBP Publishes Drawback Simplification Newsletter

Recently Customs and Border Protection published a Drawback Simplification Newsletter

On February 24, 2016, the President signed the Trade Facilitation and Trade Enforcement Act of 2015, strengthening the capabilities of the U.S. Customs and Border Protection (CBP) to enforce U.S. trade laws and regulations, streamline and facilitate the movement of legitimate trade, and interdict non-compliant trade.

The Act of 2015 included a sweeping “game-changer,” for the CBP drawback program, providing numerous, significant enhancements to the drawback laws under 19 U.S.C. § 1313, long-sought over the past decade by both CBP and the trade. Section 906, Drawback and Refunds, of the Act goes far to strengthen the drawback legal framework and CBP’s ability to more accurately and objectively administer drawback.

Customs Publishes Liberalization of Certain Documentary Evidence Required as Proof of Exportation on Drawback Claims

On August 7, 2015, U.S. Customs and Border Protection published in the Federal Register (80 FR 47405) Liberalization of Certain Documentary Evidence Required as Proof of Exportation on Drawback Claims.

SUMMARY: This document amends U.S. Customs and Border Protection (CBP) regulations by removing some of the requirements for documentation used to establish proof of exportation for drawback claims. Currently, claimants must provide originally signed documentary evidence or a certified copy of such documentary evidence to establish the date and fact of exportation of articles for drawback purposes. This document also amends various sections of title 19 of the Code of Federal Regulations (CFR) to reflect that there is no longer a legal requirement that the export invoice for mail shipments be certified. Additionally, this document amends Appendix B to part 191 of title 19 so that the Appendix reflects previous regulatory amendments closing four drawback offices. Finally, this document amends CBP regulations to reflect the change from the legacy agency name of U.S. Customs Service to the current agency name of U.S. Customs and Border Protection and to make other non-substantive editorial changes.