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CBP Clarifies Policy Change Easing Claims for Drawback on Unused Merchandise

Wednesday, May 22, 2013
Sandler, Travis & Rosenberg Trade Report

U.S. Customs and Border Protection issued May 21 a message clarifying that an April 5 policy change concerning waivers of the prior notice requirement for unused merchandise drawback applies to both retroactive and prospective waivers.

Claimants are generally required to submit notice of intent to export or destroy merchandise that may be the subject of unused merchandise drawback prior to export or destruction to give CBP the opportunity to examine the merchandise. CBP currently approves waivers of this requirement for either direct identification unused drawback (19 USC 1313(j)(1)) or substitution unused drawback (19 USC 1313(j)(2).

CBP states that under 19 CFR 191.36 a drawback claimant may request a one-time retroactive waiver (OTW) or a prospective waiver of prior notice (WPN) for drawback under 19 USC 1313(j). Approved waivers covering a specific type of 1313(j) drawback may be amended to include goods covered by another 1313(j) drawback type as long as the exports are still within the allowable statutory timeframe. The existing approval will be updated to include the additional 1313(j) type and will apply to drawback claims that meet the statutory timeframes.

The following example of a possible scenario has been updated to reflect the above information. CBP approves Company A for a one-time retroactive waiver and waiver of prior notice on Jan. 1, 2010, for drawback under 19 USC 1313(j)(1). The retroactive waiver applies to claims for exports prior to Jan. 1, 2010. Company A then adds a new product line on which it decides to claim unused substitution drawback, 19 USC 1313(j)(2). Company A amends its existing retroactive and prospective waivers of prior notice to include 1313(j)(2) on Nov. 1, 2012, and CBP approves the amendment on Dec. 19. Company A is ready to file a claim on Dec. 27 and may then file a drawback claim for qualifying exports back to Dec. 27, 2009, for the 1313(j)(2) claim it is ready to file.

CBP also notes the following additional points.

- The amendment policy changes were intended to apply to both WPN and OTW. Amendments to retroactive waivers should be accepted as long as the claimants can show that they have the appropriate documentation to support the exports.

- The amendment will be deemed effective on the date of the original approval.

- Once the claimant files the amendment, filing of the notice of intent to export or destroy (CBP Form 7553) is not required for those products covered by the amendment.

- Claimants must comply with the three-year statutory time period for exports, and claims cannot be filed on exports exceeding that time period.

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