Drawback Reforms Ease Some Requirements, Toughen Others
A wide-ranging trade facilitation and enforcement bill signed into law Feb. 24 includes significant reforms to the duty drawback program. Some of these changes will expand benefits and make it easier to file claims, while others will impose a greater burden on filers. Sandler & Travis will conduct a webinar March 7 to review these changes and how they will affect your business.
Among the key changes made by the new law are the following.
- Drawback claimants must keep records for a longer period: three years from the date the claim is liquidated, rather than three years from the date the claim is paid.
- Unused substitution and manufacturing substitution drawback may now be claimed at the eight-digit HTSUS level, meaning there will no longer be a need to file for a commercial interchangeability ruling.
- Substitution drawback will be calculated as the lesser of the duties, taxes and fees that (a) were paid on the imported article or (b) would have been paid on the exported article had it been imported. This could result in smaller or larger refunds depending on the situation.
- Statutory timeframes for filing claims are simplified and claimants will have five years from the date of import to file claims.
- Manufacturing drawback claims may now include merchandise processing fees and harbor maintenance fees.
- The transfer of merchandise may be evidenced by business records kept in the normal course of business, meaning that certificates of delivery or certificates of manufacture and delivery are no longer required.
These changes will not take effect until Feb. 24, 2018. Until that date drawback claims must be filed under the existing law. For the period Feb. 24, 2018 to Feb. 24, 2019, claimants may choose whether to file claims under the old or new laws. As of Feb. 24, 2019, drawback claims will have to be filed according to the new law.
For more information on the drawback reforms, please contact Dawn Olesky at (248) 474-7200 x1120, Andrea Artero-Larsen at (248) 474-7200 x1173, or John Gapske at (248) 474-7200 x1103.