What is “Drawback”? A program that provides a refund for a majority of goods that are exported or destroyed after importation into the United States.
If the goods are exported or destroyed drawback permits Customs to refund 99% of the duties when the goods were imported into the U.S. The only difficult part about drawback is that you must maintain precise compliance with the drawback rules and regulations – the government is not going to just return money willy nilly. The importer must fill out the drawback application before exportation.
There are (4) types of drawback:
1. Merchandise not conforming to sample or specifications – Imported goods that were not solicited not conform to the samples or specifications at the time it was imported. Must be done within 3 years from the time the merchandise was released from Customs.
2. Unused merchandise drawback – Imported goods that have not been “used” (speak to an expert about whether your particular product qualifies as used). Must be done within 3 years from the time the merchandise was released from Customs.
3. Manufacturing drawback – Imported goods used to manufacture new goods. Manufacturer’s Drawback requires that a “ruling” be approved by Customs so that Customs is aware of how the product is being manufactured.
4. Substitution for drawback purposes – Like manufacturing drawback, but you may substitute components of exported products with “commercially interchangeable” (again speak to an expert as to whether you qualify) components. For example: You import Company A screws into the U.S. but instead use Company B screws to manufacture your product. Company A screws and Company B screws are found to be commercially interchangeable, in other words industry equivalents. Must be done before the close of the 3-year period beginning on the date of importation of the imported merchandise
Contact us at 347-512-9007 for legal assistance in applying for drawback refunds regarding your imports.
Happy Importing 🙂