citations and headings (ii) Imported and/or substituted merchandise that was transferred to the predecessor from the person who imported and paid duty on the imported merchandise. 1514; See Part 190 for more. In the case of an article that is exported, the amount of drawback allowable will not exceed 99 percent of the lesser of: (1) The amount of duties, taxes, and fees paid with respect to the imported merchandise; or. (2) Special rule for sought chemical elements . Additional documentation regarding these requests should be sent to the current processing drawback office. Section 313(j)(1) of the Act, as amended (19 U.S.C. For purposes of drawback of internal revenue tax imposed under Chapters 32, 38 (with the exception of Subchapter A of Chapter 38), 51, and 52 of the Internal Revenue Code of 1986, as amended (IRC), drawback granted on the export or destruction of substituted merchandise will be limited to the amount of taxes paid (and not returned by refund, credit, or drawback) on the substituted merchandise. 1313(j)(2), on exports to these countries. user convenience only and is not intended to alter agency intent 19 CFR 10, Subpart H: Does not reference drawback. Same Condition Drawback - export must be within 3 years after importation of the merchandise. 1313(j)(3), on imported merchandise is not a use of that merchandise for purposes of this section. The Code of Federal Regulations (CFR) is the official legal print publication containing the codification of the general and permanent rules published in the Federal Register by the departments and agencies of the Federal Government. 1313(s), a drawback successor as defined in paragraph (f)(2) of this section may designate either of the following as the basis for drawback on merchandise possessed by the successor after the date of succession: (i) Imported merchandise which the predecessor, before the date of succession, imported; or. Bills of Material must contain the HTS numbers for ALL components used in manufacture, 99% of the lesser of the amount of duties, taxes and fees paid with respect to the imported components and the amount of duties, taxes and fees paid that would apply to the components if the components were imported, Claim attachments identify part number and quantity used in manufacture, Claim attachments identify merchandise used in manufacture by 8 digit HTS number. Exported merchandise to Canada or Mexico must be in the same condition as defined in 19 CFR 181.45(b)(1). 640 0 obj <>stream (3) Certifications and required evidence . (2) Claims covering a manufacturing period. In addition to the 8-digit HTSUS substitution standard in 190.2, drawback of duties, taxes, and fees, paid on imported wine as defined in 190.2 may be allowable under 19 U.S.C. A "drawback successor" is an entity to which another entity (predecessor) has transferred, by written agreement, merger, or corporate resolution: ( i) All or substantially all of the rights, privileges, immunities, powers, duties, and liabilities of the predecessor; or If a claimant is not aware of their Center account alignment, or is a new filer, they should submit their requests to the drawback email attribute that best aligns with their industry. 3rdwave is the only Duty Drawback software on the market that simplifies data validation and creates drawback claims. Customs brokers that are filing claims using their importer of record number will not be aligned with a Center. 1313(j)(2) with respect to wine if the imported wine and the exported wine are of the same color and the price variation between the imported wine and the exported wine does not exceed 50 percent. %PDF-1.7 % (c) Determination of HTSUS classification for substituted merchandise. The performing of any operation or combination of operations, not amounting to manufacture or production as provided for in 19 U.S.C. (ii) The amount of duties, taxes, and fees that would apply to the exported article if the exported article were imported. At the same factory, there are also duty-free motors that were manufactured in the Caribbean. (The CBP Form 7553 must be submitted to CBP 5 working days prior to exportation, or 7 working days prior to destruction). (c) Determination of HTSUS classification for substituted merchandise. Drawback was previously payable only for HMF or MPF cited in a claim for unused merchandise drawback, see 19 CFR 191.3(a)(4),(5); 5 - Substitution drawback empowers you to use both foreign and domestic merchandise in manufacturing goods for export or as "unused" merchandise subject to drawback. The CBP Form 7553 must be submitted to CBP 5 working days prior to exportation, or 7 working days prior to destruction. However, qualifying unused exports can be used to claim drawback regardless of origin using substitution matching. 1313(j)(3)(B), on the substituted merchandise is not a use of that merchandise for purposes of this section. If you have comments or suggestions on how to improve the www.ecfr.gov website or have questions about using www.ecfr.gov, please choose the 'Website Feedback' button below. (f) Designation by successor; 19 U.S.C. This provision provides a 100% refund of Internal Revenue taxes only. 1313(j)(2)), provides for drawback of duties, taxes, and fees paid on imported merchandise based on the export or destruction under CBP supervision of substituted merchandise (as defined in 190.2, pursuant to 19 U.S.C. J.M. Companies/individuals that are not automated have several options for filing electronic drawback claims: Please reach out to your assigned CBP client representative for more information. For purposes of drawback of internal revenue tax imposed under Chapters 32, 38 (with the exception of Subchapter A of Chapter 38), 51, and 52 of the Internal Revenue Code of 1986, as amended (IRC), drawback granted on the export or destruction of substituted merchandise will be limited to the amount of taxes paid (and not returned by refund, credit, or drawback) on the substituted merchandise. (ii) Merchandise not otherwise designated. (2) Destruction. The export is matched to the import using HTS level substitution. (CSMS# 45963175). (B) Destruction. Substitution Same Condition/Unused Merchandise Drawback: U.S. import duty may be recovered when unused material, which is commercially interchangeable with the imported duty-paid material, is exported. The amount of duties, taxes, and fees eligible for drawback is determined by per unit averaging, as defined in 19 CFR 190.2, for any drawback claim based on 19 U.S.C. Note: Claims under unused substitution drawback, 19 U.S.C. Choosing an item from 1313(j)(2) is the alternative substitution standard rule set forth in (d)(1), claims under this subpart may be paid and liquidated if: (i) The claimant specifies on the drawback entry that the basis for substitution is the alternative substitution standard for wine; and. The amount of duties, taxes, and fees eligible for drawback is determined by per unit averaging, as defined in 19 CFR 190.2, for any drawback claim based on 19 U.S.C. Drawback is the refund of certain duties, internal revenue taxes and certain fees collected upon the importation of goods and refunded when the merchandise is exported or destroyed. Official websites use .gov (ii) The amount of duties, taxes, and fees that would apply to the exported article if the exported article were imported. 1313(j)(2)), before the close of the 5-year period beginning on the date of importation of the imported merchandise and before the drawback claim is filed, and before such exportation or destruction the substituted merchandise is not used in the United States (see paragraph (e) of this section) and is in the possession of the party claiming drawback. The amount of a merchandise processing fee eligible for drawback per unit of merchandise for drawback claims based upon substitution is subject to the limitations set forth in 190.22(a)(1)(ii) (manufacturing claims) and 190.32(b) (unused merchandise claims), as applicable. Sugar Exception USMCA made minor changes to the sugar exception to drawback and duty deferral restrictions under 19 USC 3333(a)(6). Exported petroleum products sharing the same 8-digit are used to claim drawback. Effective September 14, 2021, drawback claims transmitted in ACE will be routed to the Center of Excellence and Expertise (Center) based on the claimants current industry sector account alignment. All drawback claims must be filed electronically in ACE and in accordance with the Trade Facilitation Trade Enforcement Act of 2015 (TFTEA) (Pub. Please do not provide confidential A "drawback successor" is a manufacturer or producer to whom another entity (predecessor) has transferred, by written agreement, merger, or corporate resolution: ( i) All or substantially all of the rights, privileges, immunities, powers, duties, and liabilities of the predecessor; or The Unused Merchandise filing provision utilizes imported duty paid materials or finished exported product in essentially the same condition. 1313(s), a drawback successor as defined in paragraph (d)(2) of this section may designate merchandise or drawback product used by a predecessor before the date of succession as the basis for drawback on articles manufactured or produced by the successor after the date of succession. The eCFR is displayed with paragraphs split and indented to follow (2) Destruction. The qualified article must have been manufactured or produced in a specific petroleum refinery or production facility which must be identified; (e) Time of export. (The CBP Form 7553 must be submitted 5 working days prior to exportation or 7 working days prior to destruction). As a reminder, for all drawback provisions claiming Section 301 and/or 201 duties, the filer must report both the Chapter 99 and the 1 - 97 HTS numbers, along with the QTY and Value for each line item in the same order as listed in the ACE underlying import entry. Drawback is allowable even though none of the imported, duty-paid merchandise may actually have been used in the manufacture or production of the exported or destroyed articles. Subscribe to: Changes in Title 19 :: Chapter I :: Part 190 :: Subpart C :: Section 190.32. Duty-paid merchandise or drawback products used at one factory of a manufacturer or producer within 5 years after the date on which the material was imported may be designated as the basis for drawback on articles manufactured or produced in accordance with these regulations at other factories of the same manufacturer or producer. "Published Edition". This content is from the eCFR and may include recent changes applied to the CFR. 5 U.S.C. Drawback will be allowable on imported merchandise if, before the close of the 5-year period beginning on the date of importation and before the drawback claim is filed, the merchandise is exported from the United States or destroyed under CBP supervision. Upon compliance with the requirements of this section and under 19 U.S.C. (iv) Review by CBP. Unused Merchandise Drawback: Drawback on merchandise that is imported into the U.S. and is exported in the same condition that it arrived. (ii) Merchandise not otherwise designated. Regardless, Umbrella is still entitled to 99% of the duties pain on the imported motors just the same as if the motors had been used to manufacture the 500 dishwashers that were exported to foreign markets. Check the box that accurately reflects why the imported article(s) are rejected. 1313(s) . Rejected Merchandise Drawback: (ii) The claimant provides a certification, as part of the complete claim (see 190.51(a)), stating that: (A) The imported wine and the exported wine are a Class 1 grape wine (as defined in 27 CFR 4.21(a)(1)) of the same color (i.e., red, white, or ros); (B) The imported wine and the exported wine are table wines (as defined in 27 CFR 4.21(a)(2)) and the alcoholic content does not exceed 14 percent by volume; and. In this case the imported duty paid material does not have to be exported if the substituted merchandise is. 100% Risk-free and accurate data. 1313(b). 1/1.1 The Substitution matching method allows for exports, regardless of origin, to be substituted at the 8-digit or 10-digit Harmonized Tariff Schedule number to claim drawback on duty paid imports. endstream endobj 555 0 obj <>/Metadata 26 0 R/Outlines 41 0 R/Pages 552 0 R/StructTreeRoot 48 0 R/Type/Catalog/ViewerPreferences 587 0 R>> endobj 556 0 obj <>/MediaBox[0 0 612 792]/Parent 552 0 R/Resources<>/Font<>/ProcSet[/PDF/Text/ImageC]/XObject<>>>/Rotate 0/StructParents 0/Tabs/S/Type/Page>> endobj 557 0 obj <>stream (ii) The assets and other business interests of a division, plant, or other business unit of such predecessor, but only if in such transfer the value of the transferred realty, personalty, and intangibles (other than drawback rights, inchoate or otherwise) exceeds the value of all transferred drawback rights, inchoate or otherwise. 1313(j)(3)(B), on the substituted merchandise is not a use of that merchandise for purposes of this section. The trade should continue to transmit claims to any of the four drawback office port locations as provided in the CBP and Trade Automated Interface Requirements (CATAIR). Additional documentation regarding these requests should be sent to the current processing drawback office. Please refer to 19 CFR 190. Using Manufacturing Substitution, components, regardless or origin, used in the production of a finished good can be matched to the duty paid imported component using HTS level Substitution. 4. 5. 1313(j)(2). CBP regulations changes were made to 19 CFR 190 (including Appendices), revising 19 CFR Part 181 and 191 in accordance with TFTEA requirements 19 U.S.C. formatting. (b) Use by same manufacturer or producer at different factory. Go to Genesis > Sticky Topbar to set information. 1313(j)(2) is the alternative substitution standard rule set forth in (d)(1), claims under this subpart may be paid and liquidated if: (i) The claimant specifies on the drawback entry that the basis for substitution is the alternative substitution standard for wine; and. 1313(j)(2), the total amount of drawback allowable will not exceed 99 percent of the duties, taxes, and fees paid with respect to the imported merchandise, without regard to the limitations in paragraph (b)(1) or (b)(2) of this section. In the case of an article that is exported, subject to paragraph (b)(3) of this section, the total amount of drawback allowable will not exceed 99 percent of the lesser of: (i) The amount of duties, taxes, and fees paid with respect to the imported merchandise; or. These changes streamline procedures and requirements/minor technical updates. HTS Level Substitution Matching Allows Flexibility Matching Exports and Imports. The performing of any operation or combination of operations, not amounting to manufacture or production under the provisions of the manufacturing drawback law as provided for in 19 U.S.C. (1) General rule. 1313 (j). (1) Exportation. The predecessor or successor must certify that the successor is in possession of the predecessors records which are necessary to establish the right to drawback under the law and regulations with respect to the imported and/or substituted merchandise. This is calculated as 0.99 x $500 = $495.00. (ii) The amount of duties, taxes, and fees that would apply to the exported article if the exported article were imported. The form will be returned to the company, indicating CBP's decisions on examination, destruction or waiver (indicating that CBP has made a determination not to examine the merchandise prior to export or witness the destruction). Now that you know the basics of duty drawback, it's time to learn how to file and claim duty drawbacks. 66, 1202 (General Note 3(i), Harmonized Tariff Schedule of the United States), 1313, 1624; 190.2, 190.10, 190.15, 190.23, 190.38, 190.51 issued under 19 U.S.C. (e) Operations performed on substituted merchandise. Share sensitive information only on official, secure websites. (f) Amount of drawback. https://www.ecfr.gov/current/title-19/chapter-I/part-190. (ii) The amount of duties, taxes, and fees that would apply to the destroyed article if the destroyed article had been imported (after the value of the imported merchandise has been reduced by the value of materials recovered during destruction as provided in 19 U.S.C. The manufactured article that is to be destroyed must contain imported or substituted merchandise under the drawback provisions and was not used in the U.S. (The CBP Form 7553 must be submitted to CBP 7 working days prior to destruction). 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