U.S. Customs and Border Protection will not be providing accelerated payment for drawback claims filed under the new Trade Facilitation and Trade Enforcement Act drawback provisions until the TFTEA drawback regulations take effect, CBP officials said recently. As a result, claimants filing for drawback under the more advantageous TFTEA provisions will have to wait months, if not longer, to obtain their refunds.
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. Accelerated payment allows drawback to be paid prior to liquidation of the import entry or drawback claim provided that claimants have acquired and posted with CBP a bond in an amount sufficient to cover the anticipated refund amount. Under this procedure, a drawback claim determined to be complete and error-free will be certified for payment within three weeks, if it is electronically filed, or three months, for manually prepared claims.
TFTEA made numerous changes to simplify the drawback law, including standardizing the time frames for filing claims and modernizing recordkeeping requirements. This law also allows claimants to claim substitution drawback based on goods within the same eight-digit HTSUS number and make claims against imports and exports that are within five years of the date of the claim.
Drawback claimants are expected to start taking advantage of these statutory changes as soon as they take effect Feb. 24. Without accelerated payment, however, there will be little immediate practical benefit, as outside this procedure CBP typically takes up to a year to liquidate drawback claims. In addition, given that CBP has yet to even propose regulations specifying how the TFTEA drawback changes will be implemented, it could be some time before accelerated payment becomes available.
For more information, please contact ST&R’s Michael Cerny at (212) 549-0160.