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DUTY DRAWBACK March 2017
2
Outline
• P.L. 114-125 Trade Facilitation & Trade Enforcement Act 2015
- Section 906 – Drawback Simplification Bill
• Drawback Regulations Team
• ACE Drawback Programming
• NAFTA – Section 303 repeal
• Reconciliation Entries
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Non Manufacturing Merchandise Drawback
File Claim Export Import
5 Years
1. 19 USC 1313(j)(1) – Direct ID - A refund of duties, taxes, and fees on specifically identifying an export with its import using serial number, lot number, or accounting methodology (FIFO) (same product)
2. 19 USC 1313 (j)(2) – Substitution - A refund of duties, taxes, and fees on imported merchandise that is commercially interchangeable with the exported merchandise ―Commercially Interchangeable = Same 8 digit
classification. (“other” exception)
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Substitution Matching Exports to Imports
Old Way
New Way
Caution – FTAs
eliminated substitution
under 1313(j) and (p) on bulk exports to
Canada, Mexico and Chile
Example: Undenatured Ethanol
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19 USC 1313(p) – Substitution of Finished Petroleum Derivatives
1. Basis for substitution / commercial interchangeability
• Specified HTS headings
• Done at the 8 digit level
• 2000 HTSUS or current
2. Different time frames
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2000 HTSUS
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2016 HTSUS
Different 8 digits
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19 USC 1313(p) - Substitution Unused Drawback of Finished Petroleum Products
File Claim Export Import
5 Years
Standard J claims
File Claim Export Import
180 days 5 Years
P claims
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Manufacturing Drawback
19 USC 1313 (a & b) - A refund of duties, taxes and fees paid on imported merchandise based upon the production and export of articles in this country from imported, duty-paid feedstocks (e.g., crude oil) or similar (“same kind and quality”) domestic feedstocks, which are substituted for the imported input/feedstock.
- Same Kind and Quality = Same 8 digit classification
File Claim Production Export Import
5 Years
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New Drawback Law: Other Items
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1. Evidence of Transfers – Business Record • Certificates are eliminated
2. Proof of Exportation – AES
3. Filing of Drawback claims – Submitted Electronically
4. New Joint & Several Liability provision
5. Calculation of Claim – 1313(p) exempted
New Drawback Law: Other Items
6. Possible modification of FTZ operations
• Reduction in Direct or Bonded Exports
7. New drawback law is effective as of February 24, 2016. However, we do have a two (2) year phase in to file claims. • Timing impact on Manufacturing Claims
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1. Electronic filing of drawback claims
2. Process changes Manufacturing data provided with claim – no more
certificates of manufacture Limitations on line items – imports and exports
3. Accelerated Payment Changes Taxes and fees can be refunded under A/P Bond coverage required for this increase Excise Tax records required at time of filing Timing changes for claim filing
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ACE Drawback Programming
1. Most items for new regulations are non-controversial
2. Calculation of Claim Average line item methodology Status quo of duty per unit 1313(p) is exempted from “lesser of rule” – average
method may apply
3. Joint and Several liability
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Regulations Team
1. NAFTA renegotiation – Section 303 repeal
2. Reconciliation filing
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Miscellaneous
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