Duty Drawback

Duty Drawback

What is it?

Duty Drawback is a way for an importer to reclaim up to 99% of the duties and taxes paid on qualifying import entries that have been exported, manufactured, and/or destroyed under U.S. Customs’ supervision. Drawback is a complex commercial program that U.S. Customs and Border Protection (CBP) manages. Every claim prepared differs from the next, having different circumstances and requirements. Gallagher Transport International has experienced brokers who will go into depth about each inquiry made once they know the circumstances of the goods claimed and help guide you through this complex process.

Drawback may be the first U.S. export promotion program. It can be traced back more than 200 years to 1789. The United States implemented the program to encourage U.S. manufacturing and foreign export sales. Drawbacks are essential as they help alleviate U.S. exporters’ tax burden. There are various kinds of drawback claims; here are three common ones.

Types of Drawback Claims:

Unused Merchandise

If an imported article is unused and exported or destroyed under U.S. Customs’ supervision, it may be eligible for this type of drawback. So long as no one has manipulated the article to be re-manufactured or reproduced, it qualifies as ‘unchanged,’ and you can claim it as an unused merchandise drawback. Companies should document their export process extensively so that Customs Border Patrol can confirm they have abided by this regulation.

Manufacturing

Raw goods and/or component parts imported for use in manufacturing and the production of other exported articles may be eligible for this type of drawback. To qualify, the exported product should have a new name, character, or function. The refund consists of duties, taxes, and other charges paid for the imported goods when they first arrived in the United States. This process can save companies money on the cost of producing goods that they will eventually sell overseas. To file a Manufacturing Drawback, the importer must produce the manufacturing ruling number (General Components Ruling or a Specific Ruling) that U.S. Customs provided.

Rejected Merchandise

Articles imported for consumption but do not conform to sample or specifications, were shipped without the consignee’s consent, or were deemed defective at the time of import may qualify for this type of drawback.

If you would like to discuss these or any other duty drawback questions with one of our experienced brokers, email us at info@gallaghertransport.com.

Duty Drawback

How to Begin:

The importer must apply for several U.S. Customs permissions to begin filing and claiming drawback benefits.

  • One-Time Waiver – If the articles have already been exported or destroyed (without Customs’ drawback privileges), this document will grant the importer the ability to file a one-time claim for the qualifying duties on these entries.
  • Waiver of Prior Notice – This is needed for any future drawback claims, allowing the importer to file claims without further permission from the date of the approval letter.
  • Accelerated Payment – This process allows the importer to receive duty drawback payment based on when they filed the claim. Without this privilege, the importer must wait until all entries listed on the drawback have been liquidated (closed).

Duty Drawback

FAQ’s:

Is there a time frame to file?

Yes – a drawback claim must be submitted within 5 years from the article’s date of import.

What information do I need to provide to submit a claim?

To file a claim, a drawback assessment will be requested. This is an in-depth list of information including date of import, date of export, item description, tariff #s, value of the item, as well as duty percent rates, to name a few. To receive a comprehensive list of the information needed to file a drawback claim and get started, please contact one of our Duty Drawback experts at info@gallaghertransport.com.

The importer must apply for several U.S. Customs permissions to begin filing and claiming drawback benefits.

  • One-Time Waiver – If the articles have already been exported or destroyed (without Customs’ drawback privileges), this document will grant the importer the ability to file a one-time claim for the qualifying duties on these entries.
  • Waiver of Prior Notice – This is needed for any future drawback claims, allowing the importer to file claims without further permission from the date of the approval letter.
  • Accelerated Payment – This process allows the importer to receive duty drawback payment based on when they filed the claim. Without this privilege, the importer must wait until all entries listed on the drawback have been liquidated (closed).

At Gallagher Transport International, the client always comes first. Your success measures our success. Our goal is to make your job easier by staying on top of communication and deadlines, saving you time and money by ensuring your valuable shipments are delivered in the most efficient and cost-effective way.

We take the time to educate you on what you need to know regarding the regulations for your specific product, communicate with you BEFORE an issue happens to help avoid unexpected delays or possible fines, and stay on top of your shipments every step of the way.

With over 30 years of experience as an import broker, freight forwarder, and logistics supplier, we have extensive practical knowledge working with importers and dealing with all commodities. We strive to make this critical piece of your supply chain go as smoothly and seamlessly as possible.

Do you have questions? We are always happy to help. We have several locations: Denver, Portland, Houston, Los Angeles, San Francisco, and St. Louis. Call 360-750-8830 or email at info@gallaghertransport.com.

Why Choose Gallagher as Your Customs Broker:

Experts in the Import Field:

  • We have experience in many industries and product lines, including:
    • FDA-regulated items such as perishables, wine, alcohol, and medical equipment
    • EPA/DOT regulated
    • Specialty equipment
    • Apparel
  • We stay current on the ever-changing customs regulations and policies pertinent to imports from the FDA, USDA, Fish & Wildlife, and the EPA.
  • We can coordinate the transportation of your freight, whether by land, sea, or air.
  • We clear shipments at all U.S. ports.
  • We have been in the customs broker and logistics business for over 25 years and care about your company and goods.

Our Services Include:

  • Importing & Exporting Consultation
  • ISF – Import Security Filing for all import shipments arriving by ocean into the United States. This formality is required prior to export from the last foreign port to avoid penalty.
  • Cargo Insurance – Cargo insurance, sometimes called freight insurance, provides a cost-effective way of covering freight for physical loss or damage to goods in transit.
  • Customs Bonds – A Customs bond is required when importing merchandise for commercial purposes valued over $2,500 or a commodity subject to other federal agency’s requirements (i.e., ATF or FDA).
  • Customs Clearance – We enable companies to bring goods into the U.S. from another country. A simple way to think about customs clearance is an electronic notification given by customs to an importer to show that customs has released their shipment and it can be shipped to its final U.S. destination.
  • Duty Drawback – In addition to standard U.S. Customs clearances, we can assist you with duty drawback. This U.S. Customs program allows exporters to receive a refund of 99% of the import duties paid based on product and procedure qualifications.
  • Compliance Review – We ensure that your shipment is in compliance with laws and regulations.
  • Global Logistics – We can assist you every step of the way in getting your goods from the point of origination to their final destination.
  • Freight Forwarding – We enable companies to ship goods from the U.S. to another country. (Freight Forwarding is a VERY generic term. We provide freight forwarding now for our imports, both ocean and air imports. Freight forwarding does not apply only to exports.)

Helpful:

  • We take time to understand your business process, including terms of sale, payment terms, and urgency of shipment.
  • We understand all the details that may impact brokerage costs and reduce these costs whenever possible.
  • We provide a customized solution specifically for you.

Proactive:

  • We keep you updated on your shipments regularly so there are no surprises.
  • We closely watch potential events that may affect your shipments and do everything possible to avert or rectify them without delay.

Reliable:

  • Our brokers will build a relationship with you so you will have a relationship instead of a customer service number to call.
  • We review our work to prevent typographical, clerical, or product classification errors.
  • We specialize in providing personalized service and a positive experience.

Ready to learn more? Our brokers are happy to answer any of your questions right now!

Call 360-750-8830 or email at info@gallaghertransport.com.