Unused Merchandise Drawback

19 USC 1313(j)

Imported Merchandise that has not been used or put to its intended purpose in the US is eligible for Unused Merchandise Drawback if the merchandise has been re-exported from the US or destroyed under Customs supervision within 3 years from the date of importation.

"Direct Identification"

19 USC 1313(j)(1)

Although Customs generally requires the drawback claimant to directly track its merchandise from point of importation to exportation, it will allow the use of certain accounting methods such as LIFO, FIFO, or Low to High if the claimant can demonstrate its ability to comply with the accounting requirements.

Direct Identification is required for all exports to Canada and Mexico. See part 191.14 of the Drawback Regulations for more information on accounting methods.

"Substitution"

19 USC 1313(j)(2)

A claimant may file for Unused Merchandise Substitution Drawback if it exports or destroys merchandise (domestic or foreign) that is commercially interchangeable with the imported merchandise and does so before the close of a 3 year period beginning on the date of importation of the imported merchandise subject to the drawback claim. Before a claimant can file under this provision, Customs must make a determination as to whether the imported and substituted merchandise are commercially interchangeable.

Customs also requires the claimant to possess both imported and substituted merchandise. The Substitution allowance is not available on exports to Canada or Mexico.