Duty Drawback

Duty Drawback in the United States

Duty drawback

Find more information on Duty drawback in relation to the Customs Trade Law in the legal Encyclopedias.

Duty drawback and the International Trade Law

Drawback is the refund, reduction or waiver in whole or in part of customs duties assessed or collected upon importation of an article or materials which are subsequently exported.

Under the NAFTA, the amount of customs duties that will be refunded, reduced or waived is the lesser of the total amount of customs duties paid or owed on the goods or materials when imported into a NAFTA country and the total amount of customs duties paid or owed on the finished good in the NAFTA country to which it is exported.

No NAFTA country, on condition of export, will refund, reduce or waive the following: antidumping or countervailing duties, premiums offered or collected pursuant to any tendering system with respect to the administration of quantitative import restrictions, tariff rate quotas or trade preference levels, or a fee pursuant to Section 22 of the U.S. Agricultural Adjustment Act. Moreover, same condition substitution drawback was eliminated effective January 1, 1994.

Main rules:

  • Article 303 : Restriction on Drawback and Duty Referral Programs
  • Annex 303.6 : Goods Not Subject to Article 303
  • Annex 303.7 : Effective Dates for the Application of Article 303
  • Annex 303.8 : Exception to Article 303(8) for Certain Color Cathode-Ray Television Picture Tubes

For information about about drawback procedures in the Automated Commercial Environment (ACE), please see below.

Drawback in ACE

In support of trade modernization and the White House Executive Order calling for establishment of the Single Window, U.S. Customs and Border Protection (CBP) is preparing to roll out new Automated Commercial Environment (ACE) capabilities to complete the delivery of core trade processing in ACE. The transition date for this deployment is still being finalized. CBP will deploy drawback in ACE, at which time all Automated Broker Interface (ABI) drawback filings must be filed in ACE and will no longer be accepted in the Automated Commercial System (ACS).

It is important to note that there will be a limit on the number of records per claim. Specifically, there will be a limit of 5,000 import, manufacturing, and export or destroyed records per drawback claim.

Drawback and Duty Deferral Programs

The NAFTA provisions on drawback and duty deferral applies to goods imported into Canada or the United States and subsequently exported to the other country (i.e., Canada or the United States) on or after January 1, 1996. The NAFTA provisions on drawback and duty deferral will apply to goods imported into Canada or the United States and subsequently exported to Mexico, or imported into Mexico and subsequently exported to Canada or the United States, on or after January 1, 2001. Thus, transactions involving either the importation of goods into Mexico or the exportation of goods to Mexico will not come under the drawback and duty deferral provisions of the NAFTA until January 1, 2001. For information on Duty Deferral Programs (Inward Processing), please click here.

Resources

See Also

Further Reading

  • Duty drawback entry in the Dictionary of International Trade Law (Raj Bhala)
  • Duty drawback entry in the Gale Encyclopedia of U.S. Economic History (Thomas Carson; Mary Bonk)
  • Duty drawback entry in the Dictionary of International Trade
  • Duty drawback entry in the Dictionary of International Trade: Handbook of the Global Trade Community (Edward G. Hinkelman)

Duty Drawback: Open and Free Legal Research of US Law

Federal Primary Materials

The U.S. federal government system consists of executive, legislative, and judicial branches, each of which creates information that can be the subject of legal research about Duty Drawback. This part provides references, in relation to Duty Drawback, to the legislative process, the federal judiciary, and the primary sources of federal law (cases, statutes, and regulations).

Federal primary materials about Duty Drawback by content types:

Laws and Regulations

US Constitution
Federal Statutory Codes and Legislation

Federal Case Law and Court Materials

U.S. Courts of Appeals
United States courts of appeals, inclouding bankruptcy courts and bankcruptcy appellate panels:

Federal Administrative Materials and Resources

Presidential Materials

Materials that emanate from the President’s lawmaking function include executive orders for officers in departments and agencies and proclamations for announcing ceremonial or commemorative policies. Presidential materials available include:

Executive Materials

Federal Legislative History Materials

Legislative history traces the legislative process of a particular bill (about Duty Drawback and other subjects) for the main purpose of determining the legislators’ intent behind the enactment of a law to explain or clarify ambiguities in the language or the perceived meaning of that law (about Duty Drawback or other topics), or locating the current status of a bill and monitoring its progress.

State Administrative Materials and Resources

State regulations are rules and procedures promulgated by state agencies (which may apply to Duty Drawback and other topics); they are a binding source of law. In addition to promulgating regulations, state administrative boards and agencies often have judicial or quasi-judicial authority and may issue administrative decisions affecting Duty Drawback. Finding these decisions can be challenging. In many cases, researchers about Duty Drawback should check state agency web sites for their regulations, decisions, forms, and other information of interest.

State rules and regulations are found in codes of regulations and administrative codes (official compilation of all rules and regulations, organized by subject matter). Search here:

State opinions of the Attorney General (official written advisory opinions on issues of state law related to Duty Drawback when formerly requested by a designated government officer):

Tools and Forms

Law in Other Regions

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