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Trade Groups Seek Congressional Action on Drawback Simplification

Thursday, March 19, 2015
Sandler, Travis & Rosenberg Trade Report

Nearly a dozen business groups with substantial international trade interests wrote to Senate Finance Committee leaders recently urging them to include duty drawback simplification legislation as part of the committee’s consideration of Trade Promotion Authority and other trade legislation.

Drawback, which was established in 1789 to facilitate U.S. exports, allows domestic companies to import merchandise and raw materials and obtain a refund of federal duties, taxes and fees paid on those imports if they are exported, used to manufacture products for exportation or destroyed. The letter states that this program supports U.S. jobs through the export of finished goods and keeps manufacturers, retailers and distributors competitive in the global marketplace by reducing distribution and production costs.

The associations state that for nearly a decade the federal government and the private sector have been working on legislation that would incorporate an eight-digit classification system that is designed to ease drawback administration and facilitate growth in exports. However, there is now “a critical point where the window for programming drawback simplification into the Automated Commercial Environment system is rapidly closing to make the October 1, 2016 completion date for ACE.” Given that “Congress only rarely processes trade legislation,” the letter therefore urges Congress to move forward with drawback simplification as soon as possible, noting that “there is broad, bipartisan congressional, executive branch, and industry support for drawback simplification legislation” because “we all recognize the value of adopting a more streamlined, efficient, and effective drawback regime.”

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