DUTY DRAWBACK - api.org · 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

DUTY DRAWBACK March 2017

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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