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Lawmakers Press CBP to Issue Updated Drawback Regulations

Monday, July 23, 2018
Sandler, Travis & Rosenberg Trade Report

House Ways and Means Committee Chairman Kevin Brady, R-Texas, and Trade Subcommittee Chairman Dave Reichert, R-Wash., are calling on the Trump administration to issue regulations implementing the duty drawback provisions of the Trade Facilitation and Trade Enforcement Act “without further delay.”

(Click here to register for ST&R's webinar on using drawback to recover Section 232 and 301 tariffs.)

Drawback is the refund of up to 99 percent of certain duties, internal revenue taxes, and fees collected on imports once either the imported substituted product or the article that has been manufactured from that product has been exported or destroyed. TFTEA made numerous changes to simplify the drawback law, including standardizing the time frames for filing claims and modernizing recordkeeping requirements. TFTEA also allows substitution drawback claims based on goods within the same eight-digit HTSUS number as well as claims against imports and exports that are within five years of the date of the claim. 

However, U.S. Customs and Border Protection has asserted that it cannot provide accelerated payment of drawback claims under the TFTEA changes (which essentially nullifies their benefit) until calculation provisions under the implementing regulations become final. TFTEA required U.S. Customs and Border Protection to issue those regulations by Feb. 24 but the rules have been held up in interagency review.

In June the Court of International Trade declined a request to order CBP to pay accelerated drawback, and in a July 19 letter Brady and Reichert said CBP’s continuing refusal to do so “has greatly complicated drawback claims.” As a result, they agreed with the CIT that the administration should issue regulations for important pieces of the package that satisfy the TFTEA mandate, such as those addressing the calculation methodology. This should be done via an interim final rule, they said, so that U.S. manufacturers can fully utilize the duty drawback program without further delay.

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