Duty Drawback Recovery

Duty drawback is a refund of duties previously paid to U.S. Customs. Each year, over $2 billion in available duty drawback is never claimed. Types of imported, duty-paid goods which drawback may be claimed at export include:

  • Goods that have not been used in the U.S.
  • Goods that have been used in the U.S. to manufacture other merchandise
  • Damaged or unacceptable goods
  • Fuel used on flights between the U.S. and points outside
  • Goods exported to Canada or Mexico

  

Case Study

Client: One of the largest cruise lines in the world.

Problem to solve: In determining what may be considered “supplies for vessels,” one drawback office concluded that the only types of qualifying goods are items that are required for the maintenance and operation of a vessel, which did not include the entirety of what the client wanted to claim.

Results: After filing protests, holding meetings, and providing explanations, we cited a somewhat obscure treasury decision from 1939 that more broadly defines vessel supplies and equipment. Using this decision, we were able to convince the drawback office to reconsider and expand its initial opinion. We succeeded in persuading Customs to agree that “supplies for vessels” could be interpreted more extensively, and consequently, supplies for the vessels, passengers, crew, and for safety and sustenance were determined as qualifying. We also classified two categories of qualifying goods: supplies for vessels and equipment for the vessel.

Client: An importer and exporter of fishing equipment.

Problem to solve: The client was importing rods, reels, line and lures and combining them into a single package for exportation. Though there was not any further manufacturing involved, the items that were imported under one part number were exported under another. This created confusion for Customs.

Results: To gain the drawback for this client, we used a BOM (bill of materials) format to track each component and its relative duty paid, and combined all components into a single export item. After much review and conversation, Customs agreed with our methodology. We prevailed and successfully claimed drawback on these goods.