What Is Duty Drawback?
Duty Drawback is the refund of customs duties and fees paid on imported merchandise that is either re-exported from the U.S. or destroyed under Customs supervision.
In most situations, Customs will refund up to 99% of the original duties and fees paid by the importer and will allow the claimant to reach back and claim drawback on export transactions that are up to 3-years old. Because Customs will only refund duties and fees under the drawback program to those claimants that can substantiate the importation, possession and exportation/destruction of the duty-paid merchandise, it is imperative that the claimant maintain the proper records for the required period of time, so that its drawback claims are fully supportable in the event of a Customs audit.
Duty Drawback is authorized under Section 1313, Title 19 of the United States Code and by Part 191 of the Customs Regulations.
Although there are several types of Duty Drawback available, the most commonly utilized by the importing and exporting trade community are Unused Merchandise, Manufacturing and Rejected Merchandise.