REDLINE VERSION
DRAWBACK
SIMPLIFICATION
March 2015
About AAEI
The American Association of Exporters and Importers (AAEI) has been a national voice for the international trade
community in the United States since 1921. Our unique role in representing the trade community is driven by our broad
base of members, including manufacturers, importers, exporters, wholesalers, retailers and service providers including
brokers, freight forwarders, trade advisors, insurers, security providers, transportation interests and ports. Many of
these enterprises are small businesses seeking to export to foreign markets.
Drawback Simplification
•
What is duty drawback? Established in 1789, duty drawback promotes US exports by
allowing a US manufacturer to obtain a refund of 99% of the Federal duties, taxes and
fees that were paid on goods it imports, as long as the US manufacturer later exported
the same goods or used the imported goods to manufacture US products for exportation.
There is manufacturing and non-manufacturing drawback.
•
Why is duty drawback important? As the only remaining WTO sanctioned export
program, the “drawback” (refund) of Federal duties, taxes and fees helps U.S.
manufacturers, retailers, and distributors compete in the global marketplace by reducing
their distribution and production costs, and thus the price of U.S. exports. Other nations
have similar duty drawback regimes. The government provides drawback refunds as a
way to help U.S. companies compete in foreign markets by eliminating some of the costs
associated with importing goods into the U.S. thereby reducing US production costs
and/or the export price of US goods in the international market. For example, if a company
sells at a 5 percent margin, every $1,000 recovered through drawback is equivalent to
$20,000 in sales. If the same company sells at a 10 percent margin, every $10,000
recovered equals $100,000 in sales. 1
•
Why is drawback simplification legislation needed? It is noncontroversial and should
be part of any trade package to update and streamline the program, making it easier for
US manufacturers to use, thus stimulating growth in exports, US jobs and US production.
US manufacturers and Customs agree that duty drawback simplification legislation is
needed.
•
What is important about the simplification legislation? Duty drawback is currently
based on a classification system for goods that is used by Customs for each import and
export to show that the imported and exported goods are the similar or the same, which
is very time consuming and costly for Customs and the U.S. manufacturer. The
simplification legislation will allow Customs to use 8-digit Harmonized Tariff System (HTS)
numbers as adopted by the U.S. and the World Customs Organization for duty drawback.
Once automated this system will make it easier for Customs and the US manufacturers
to administer because the imported and exported goods will be matched up under the
same 8 digit HTS number for purposes of duty drawback refunds.
1
Tower Group International, “Exporters benefit by taking advantage of duty drawback”,
March 14, 1999.
See http://www.bizjournals.com/houston/stories/1999/03/15/focus3.html?page=all
•
Why is substitution unused merchandise drawback important? Unused
merchandise drawback accounts for nearly 60% of all drawback claims. U.S. companies,
such as auto parts producers, wine producers, apparel producers, airplane producers,
electronics manufacturers, and rice, corn and soy bean producers, import foreign goods
and pay duties. Unused merchandise drawback encourages companies to export by
making them more competitive. This results in more high-paying export jobs in the United
States. Unfortunately, many companies have difficulty with the subjective “commercial
interchangeability” standard that must be met to use substitution unused merchandise
drawback. On top of this, CBP spends significant resources to administer an archaic
system that requires it to verify drawback to the invoice and part, something that is not
tracked in any governmental system, including the new ACE system. The detail required
to verify drawback has resulted in a system requiring numerous applications,
determinations, rulings, and audits, making the process of unused merchandise drawback
very difficult. If unused merchandise drawback is excluded from drawback simplification
legislation, it will remain unavailable for many companies. CBP will have to continue to
insist on numerous applications, determinations, rulings and audits, and it is doubtful that
drawback can ever become truly electronic. Unused merchandise will force CBP to
develop ACE in a way that accounts for the significant complexities and manual review
of unused merchandise drawback even if manufacturing drawback has been simplified.
Claimants will still need to provide detailed invoice and product level information to
calculate drawback, CBP will not have that information in the ACE system and will have
to audit this information manually, many efficiencies of simplification will be lost, and GAO
concerns about the drawback program will continue. In other words, “half a loaf” will turn
out to be no loaf at all.
Background on Drawback Program
Background. “Drawback” is the refund -- at the time goods are exported -- of customs duties, certain excise taxes,
and fees that are imposed at the time goods are imported or entered into the United States. The refund is administered
by U.S. Customs & Border Protection (CBP) after: (1) the exportation or destruction of the imported good; (2) exportation
of a good substituted for the imported good (referred to as “unused” or “substitution” drawback); or (3) exportation of a
finished good that is manufactured from the imported good or a good substituted for the imported good (referred to as
“manufacturing” drawback).
Drawback was initially authorized by the first Tariff Act of the United States in 1789 to grant a refund of taxes paid on
imports. The basic purpose is to make sure that goods which are exported into international commerce are not
economically burdened by levies which are imposed on the same goods, or substitutable goods imported into the U.S.
market. The drawback rules have evolved over the years as manufacturing methods and the movement of goods in
international commerce have changed, and as clarifications and modifications have been necessitated by ambiguities
in the law and by the enactment of additional levies on imports.
Drawback is one of the few remaining GATT/WTO-sanctioned export promotion programs and it is a program that is
used by customs authorities around the world. The WTO has commented that the drawback programs have the
following positive effects:
“Creates an export incentive; counteracts the negative effects of high import tariffs; establishes a strong
magnet for export-oriented foreign direct investment; provides benefits to exporters and manufacturers; and,
removes a bottleneck to private sector development”.
Workers in exporting industries have greater productivity and higher wages than do workers in other industries. Valid
export promotion programs such as drawback are necessary to encourage exports and enhance U.S. competitiveness
abroad. In sum, the drawback program benefits U.S. manufacturers and exporters by increasing their competitiveness
either at the margin for pricing goods in the export market or through lower overall costs of production.
Current Legislative Efforts. For almost a decade now, the federal government and the private sector have been
working on duty drawback simplification legislation that would incorporate an 8-digit classification system that is
designed to make it easier for the government and trade to administer and to facilitate growth in exports. This
simplification effort began with a series of meetings by the Trade Support Network (TSN), which is a public private
partnership between the Customs Service and industry. More recently, the efforts have included numerous meetings
with congressional trade staff that have resulted in drafts of proposed legislative changes. Both the federal government
and the private sector have an interest in simplifying this program which unfortunately has been marked by considerable
conflict, interpretation disagreements, and litigation over the years.
Legislation has been introduced by committee leadership in both the House and the Senate in recent years that would
2
incorporate drawback simplification, including S. 662 in the 113th Congress by Finance Committee chairman, Senator
Baucus and ranking member, Senator Hatch, and H.R. 6642 in the 112th Congress by Trade Subcommittee chairman
Congressman Brady. Both of these bills were broad Customs reauthorization legislation that included a drawback
simplification title.
As the 114th Congress prepares to advance Trade Promotion Authority legislation, there is a strong likelihood that other
long-stalled trade legislation will be considered at the same time. This presents an excellent opportunity to finally move
forward with drawback simplification legislation, separately or as part of the broader Customs reauthorization bill that
is also being worked on.
3
Who Supports Drawback Simplification
February 25, 2015
Dear Chairman Hatch and Ranking Member Wyden:
We, the undersigned associations, are writing to urge you to include duty drawback
simplification legislation as part of the Senate Finance Committee’s consideration of Trade
Promotion Authority and other trade legislation.
Members of our respective organizations participate in the duty drawback program and for
many years have been strong proponents of drawback simplification legislation on which we
have worked with the Congress and Customs and Border Protection (“CBP”). Duty drawback
is one of the oldest laws of our nation. It was established in 1789 in order to facilitate export
trade between the U.S. and its foreign trading partners. Duty drawback allows domestic
companies to import merchandise and raw materials and obtain a refund of Federal duties,
taxes, and fees that were paid on the imported goods if the imported goods are exported, used
to manufacture products for exportation, or destroyed. This program: 1) supports U.S. jobs
through the export of finished goods; 2) keeps manufacturers, retailers, and distributors
competitive in the global marketplace by reducing distribution and production costs and,
consequently, the price of U.S. exports; and 3) simplification enables CBP to be more efficient
by dedicating resources to drawback enforcement rather than processing drawback claims
which are still filed in paper.
For almost a decade now, the Federal Government and the private sector have been working
on duty drawback simplification legislation that would incorporate an 8-digit classification
system that is designed to make it easier for the government and trade to administer and to
facilitate growth in exports. This simplification effort has included numerous meetings with
your trade staff and various drafts of proposed legislative changes. Both the Federal
Government and the private sector have an interest in simplifying this program, which
unfortunately has been marked by considerable conflict, interpretation disagreements, and
litigation over the years. We now face a critical point where the window for programming
drawback simplification into the Automated Commercial Environment (ACE) system is rapidly
closing to make the October 1, 2016 completion date for ACE.
Legislation has been introduced by Finance and Ways and Means Committee leadership in
both the House and the Senate in recent years that would incorporate drawback simplification,
including S. 662 in the 113th Congress by then Finance Committee Chairman Senator Baucus
and then Ranking Member Senator Hatch, and H.R. 6642 in the 112th Congress by then Trade
Subcommittee Chairman Congressman Brady. Both of these bills were broad Customs
reauthorization legislation that included a drawback simplification title.
We urge you to move forward with drawback simplification as soon as possible. There is
broad, bipartisan Congressional, executive branch, and industry support for drawback
simplification legislation, which is non-controversial. The private sector is in full accord with
the CBP on the value of such legislation. We all recognize the value of adopting a more
streamlined, efficient, and effective drawback regime that makes it easier for both the Federal
Government and the private sector to administer use of this valuable, historic program.
As you know, Congress only rarely processes trade legislation and the drawback simplification
issue has languished for several years. As Congress advances trade legislation, we urge you
to take this opportunity to advance drawback simplification legislation as well, either on its own
or as part of the broader Customs reauthorization bill.
Thank you for your support for this issue and your attention to our concerns.
American Association of Exporters and Importers
American Apparel & Footwear Association
American Petroleum Institute
Association of Global Automakers, Inc.
Express Association of America
National Customs Brokers and Forwarders Association of America
National Foreign Trade Council
The National Industrial Transportation League
TechAmerica, powered by CompTIA
U.S. Council for International Business
4
U.S. Fashion Industry Association
5
Who Uses Drawback – By Industry
Aerospace
Agriculture
Apparel
Automobiles
Automobile Parts
Baggage/Luggage
Chemicals
Cosmetics
Electronics
Farm Equipment
Foods (Pre-packaged, Unfrozen, Frozen)
Home Furnishings
Industrial Equipment Military
Medical Devices
Metals
Oil & Gas
Packaging
Petrochemicals
Petroleum
Plastics
Retail & Ecommerce
Textiles
Tobacco
Titanium
Watches
Warehousing
Wine & Spirits
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SEC. 404. DRAWBACK AND REFUNDS.
(a) Articles Made From Imported Merchandise- Section 313(a) of the Tariff
Act of 1930 (19 U.S.C. 1313(a)) is amended-(1) by striking `under customs supervision'; and
(2) by striking ‘of the duties’;
(32) by inserting `as calculated under subsection (r)(4)(A),' after
shall be refunded as drawback;
(4) by striking`less 1 per centum of such duties’; and
(5) by striking ‘duties’ after ‘except that such’ and inserting therein
‘amounts paid’.,'.
(b) Substitution for Drawback Purposes- Section 313(b) of the Tariff Act of
1930 (19 U.S.C. 1313(b)) is amended-(1) by striking `If imported' and inserting the following:
`(1) IN GENERAL- If imported';
(2) by striking ‘duty-paid”
(2) by striking `and any other merchandise (whether imported or
domestic) of the same kind and quality' and inserting `and
substitute merchandise';
(3) by inserting after ‘same kind and quality’, the following: ‘or
referred to under the same eight-digit classification of the
Harmonized Tariff Schedule of the United States,’’
(43) by striking `three years' and inserting `5 years';
(54) by striking `the receipt of such imported merchandise by the
manufacturer or producer of such articles' and inserting `the date of
importation of such imported merchandise by the importer of such
articles';
(65) by striking `under customs supervision' each place it appears;
(7) by inserting after ‘of any such articles,’ the following: ‘or any
articles referred to under the same eight-digit classification of the
Harmonized Tariff Schedule of the United States,’;
(6) by inserting after `merchandise used therein been imported,'
the following: `as calculated under subsection (r)(4)(A),';
(8) by striking ‘shall not exceed 99 per centum of the duty’ after
‘any other such provision of law,’ and inserting ‘shall equal that
amount
(97) by striking the period at the end and inserting `, as calculated
under subsection (r)(4)(A).'; and
(108) by adding at the end the following:
`(2) REQUIREMENTS RELATING TO TRANSFER OF MERCHANDISE`(A) MANUFACTURERS AND PRODUCERS- Drawback shallmay
beshall be allowed under paragraph (1) in the amount
referred to under paragraph (1) only if the manufacturer or
producer of articles has received the imported, duty-paid
merchandise, merchandise of the same kind and quality, or
merchandise referred to under the same eight digit
classification of the Harmonized Tariff Schedule of the United
States either through a direct transfer from the importer
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through intermediate transfers involving one or more parties,
of imported merchandise, merchandise of the same kind and
quality, or merchandise referred to under the same eight digit
classification of the Harmonized Tariff Schedule of the United
States.substitute merchandise, directly or indirectly, of
imported duty-paid merchandise or substitute merchandise.
`(B) EXPORTERS AND DESTROYERS- Drawback shallmay
beshall be allowed under paragraph (1) in the amount
referred to under paragraph (1) only if the exporter or
destroyer of articles has received the manufactured or
produced article or an article referred to under the same eight
digit classification of the Harmonized Tariff Schedule of the
United State, either through a direct transfer from the
manufacturer or producer, or through an indirect transfer
from the manufacturer or producer through intermediate
transfers involving one or more parties, of an article referred
to under the same eight digit classification of the Harmonized
Tariff Schedule of the United States. substitute article, directly
or indirectly, of a substitute article.
`(C) EVIDENCE OF TRANSFER- Transfers of merchandise
under subparagraph (A) and transfers of articles under
subparagraph (B) may be evidenced by business records kept
in the normal course of business and no additional certificates
of transfer or manufacture shall be required.'.
(3) Imported merchandise and any other merchandise
(whether imported or domestic) referred to under the same
eight digit classification of the Harmonized Tariff Schedule of
the United States that is used in the manufacture or
production of articles as described in (b)(1) shall include
merchandise that is a sought chemical element for drawback
purposes, and such sought chemical element may be
substituted for source material containing that sought
chemical element, apportioned quantitatively as appropriate,
and if the sought chemical element and the source material
are referred to under a different eight digit classification of the
Harmonized Tariff Schedule of the United States, they shall be
deemed to be substitutable for drawback purposes. For
purposes of this subsection (b), a sought chemical element is
an element that is listed in the Periodic Table of Elements that
is imported into the United States, either separately or
contained in the source material.
(c) Merchandise Not Conforming to Sample or Specifications- Section
313(c) of the Tariff Act of 1930 (19 U.S.C. 1313(c)) is amended-(1) in paragraph (1)-(A) in the matter preceding subparagraph (A), by striking
`under the supervision of the Customs Service';
(B) in subparagraph (C) –
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(ii) by striking ‘under a certificate of delivery’ where ever
it appears;
(BC) in subparagraph (D)-(i) by striking `3' and inserting `5'; and
(ii) by striking `under the supervision of the Customs
Service'; and
(CD) in the text immediately following subparagraph (D), by
striking ‘of the duties’ and ‘,less 1 percent,’ and by inserting
`as calculated under subsection (r)(4)(A),' after
`merchandisedrawback,'; and
(2) in paragraph (2)-(A) by striking `under the supervision of the Customs
Service';
(B) by striking the last sentence and inserting the following:
`Transfers of merchandise may be evidenced by business
records kept in the normal course of business and no
additional certificates of transfer shall be required.'; and
(3) striking the entirety of paragraph (3).
(d) Proof of Exportation- Section 313(i) of the Tariff Act of 1930 (19 U.S.C.
1313(i)) is amended to read as follows:
`(i) Proof of Exportation- A person claiming drawback under this section
shall, as proof of exportation, maintain the record of exportation entered in
the automated export system of the United States Government or, if the
exporter is unable to use that system, records kept in the normal course of
business similar to the information contained in such record of
exportation.'.
(e) Unused Merchandise Drawback- Section 313(j) of the Tariff Act of 1930
(19 U.S.C. 1313(j)) is amended-(1) in paragraph (1)(A)-(A) by striking `3-year' and inserting `5-year'; and
(B) by inserting `and before filing the drawback claim' after
`the date of importation'; and
(C) in subparagraph (1)(A)(ii) by striking ‘under customs
supervision’; and
(2) in paragraph (1)(B) by striking ’99 percent of’ and inserting ‘as
calculated under subsection (r)(4)’ after ‘shall be refunded as
drawback’.
(32) in paragraph (2)-(A) in subparagraph (A) –
(i) by inserting ‘or is referred to under the same eightdigit classification of the Harmonized Tariff Schedule of the
United States as’ after ‘with; and
(B) in subparagraph (B)-(i) by striking `3-year' and inserting `5-year'; and
(ii) by inserting `and before filing the drawback claim'
after `the imported merchandise'; and
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(iii) by striking `under customs supervision';
(BC) in subparagraph (C)(ii)(II)-(i) by inserting `, directly or indirectly,' after
`received'; and
(ii) by inserting `, tax, or fee imposed under Federal
law upon importation or entry and' after `duty'; and
(iii) by striking ‘, a certificate of delivery transferring to
the party’; and
(iv) by striking ‘any combination of imported and
commercially interchangeable merchandise’ and
inserting in its place ‘merchandise referred to under
the same eight-digit classification of the Harmonized
Tariff Schedule of the United States, or any combination
thereof’; and
(CD) in the text immediately following subparagraph (C)-(i) by inserting `, as calculated under subsection
(r)(4),' after `under this subsection'; and
(ii) by adding at the end the following: `Merchandise
For purposes of this subsection (j), merchandise shall
be considered to be received directly or indirectly from
a person who imported and paid any duty, tax, or fee
due on the imported merchandise if the recipient
received any imported merchandise, any other
merchandise (whether imported or domestic), or any
combination of imported merchandise and such other
merchandise, from the importer through a transfer
directly to the recipient, or a through an indirect
transfer from the importer through one or more
intermediate transfers involving one or more parties of
any combination of imported merchandise or such other
merchandise. Transfers of merchandise may be
evidenced by business records kept in the normal
course of business and no additional certificates of
transfer shall be required.'; and
(4) in paragraph (3) –
(i) in subparagraph (B) by inserting ‘or the merchandise
referred to under the same eight-digit classification of the
Harmonized Tariff Schedule of the United States’ after
‘merchandise’; and
(5) by adding at the end the following –
(5)
For purposes of subsection (j)(2) only, if the breakout for
the subheading for the eight-digit classification of the
Harmonized Tariff Schedule of the United States for the
merchandise begins with the word “other”, then the phrase
“merchandise referred to under the same eight digit
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classification of the Harmonized Tariff Schedule of the United
States” in subsection (j)(2) shall not apply, and any such other
merchandise must be referred to under the same ten-digit
classification of the Harmonized Tariff Schedule of the United
States as the imported merchandise. However, if the ten-digit
classification of the Harmonized Tariff Schedule of the United
States to which the merchandise refers begins with the word
“other”, then neither of the phrases “merchandise referred to
under the same eight-digit classification of the Harmonized
Tariff Schedule of the United States” nor “merchandise referred
to under the same ten-digit classification of the Harmonized
Tariff Schedule of the United States” shall apply, and subsection
(j)(2)(A) may only be satisfied if such other merchandise is
commercially interchangeable with the imported merchandise.
(6)
For purposes of subsection (j)(2) only, in order to
demonstrate that imported merchandise and an exported article
are referred to under the same eight-digit classification of the
Harmonized Tariff Schedule of the United States, the drawback
claimant may use the eight-digit numbers set forth in the U.S.
Department of Commerce Schedule B, Statistical Classification
of Domestic and Foreign Commodities Exported from the United
States, applying all applicable equivalent eight-digit tariff
classification of the Harmonized Tariff Schedule of the United
States subheading numbers of that Schedule B number, without
regard to whether the Schedule B number refers to more than
one eight-digit classification of the Harmonized Tariff Schedule
of the United States .
(f) Certificate of Delivery- Section 313 of the Tariff Act of 1930 (19 U.S.C.
1313) is amended by striking subsection (k). [QUESTION WHETHER 313(k)
IS STILL NEEDED IN AN EIGHT-DIGIT DRAWBACK]
(g) Regulations- Section 313(l) of the Tariff Act of 1930 (19 U.S.C.
1313(l)) is amended by striking `and the designation of the person to
whom any refund or payment of drawback shall be made' and inserting
`and the authority to require that all drawback entries be filed
electronically within one year after date of enactment of this Act'.
(h) Substitution of Finished Petroleum Derivatives- Section 313(p) of the
Tariff Act of 1930 (19 U.S.C. 1313(p)) is amended-(1) by striking `Harmonized Tariff Schedule of the United States'
each place it appears and inserting `HTS'; and
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(2) the text immediately following paragraph (3)(A)(ii), by striking
`Commissioner of Customs' and inserting `Commissioner of U.S.
Customs and Border Protection'; and
(3) in paragraph (3) –
(i) in subparagraph (A)(ii)(II) by striking ‘duty paid; and
(ii) in subparagraph (A)(ii)(II) by striking ‘as so certified in a
certificate of delivery or certificate of manufacture and delivery’;
and
(iii) at the end of subparagraph (A) by striking ‘so designated on
the certificate of delivery or certificate of manufacture and
delivery’, and by striking the last sentence and inserting therein
‘The transferring party shall maintain records kept in the normal
course of business to demonstrate that fact.’ .
(i) Packaging Material- Section 313(q)(3) of the Tariff Act of 1930 (19
U.S.C. 1313(q)(3)) is amended –
(1) in paragraph (1) by striking ‘and duty paid’ each place it
appears; and
(2) in paragraph (3) by striking `they contain' and inserting `it
contains'.
(j) Filing and Calculation of Drawback Claims- Section 313(r) of the Tariff
Act of 1930 (19 U.S.C. 1313(r)) is amended-(1) in the heading, by inserting `and Calculation of' after `Filing';
(2) in paragraph (1)-(A) by striking the first sentence and inserting the following:
`A drawback entry shall be filed or applied for, as applicable,
not later than 5 years after the date on which the imported
merchandise on which drawback is claimed was imported. If
imported merchandise summarized on an entry summary line
item with respect to which drawback is claimed was imported
on more than one date, the earliest date of importation of the
merchandise contained on that entry summary line item shall
be used for purposes of this paragraph.';
(B) in the second sentence, by striking `3-year' and inserting
`5-year'; and
(C) in the third sentence, by striking `the Customs Service'
and inserting `U.S. Customs and Border Protection';
(3) in paragraph (3)(A)-(A) in the matter preceding clause (i), by striking `The
Customs Service' and inserting `U.S. Customs and Border
Protection'; and
(B) in clauses (i) and (ii), by striking `the Customs Service'
each place it appears and inserting `U.S. Customs and Border
Protection'; and
(4) by adding at the end the following:
`(4) Notwithstanding any other provision of law, The the amount used for
purposes of determiningof drawback that is payable under a drawback
entry for refund filed under any subsection (a), (b), or (c)in this section
shall equal 99 per centum of the amount determined by multiplying--
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`(A) the amount determined by dividing-`(i) the total amount of duties, taxes, and fees imposed under
Federal law upon entry or importation of the imported
merchandise claimed for drawback, as allocated on the entry
summary line item under which the imported merchandise is
reported, or, if not allocated on an entry summary line item,
as otherwise reported and paid; by
`(ii) the number of units or the quantity of the imported
merchandise as allocated on the entry summary line item
under which the imported merchandise is reported, or, if not
allocated on an entry summary line item, as otherwise
reported; and
`(B) the number of units or quantity of imported merchandise
claimed for drawback.
Notwithstanding the above, and applying only to drawback under
subsection (j), if and to the extent the amount of duties, taxes or fees
imposed under Federal law upon importation or entry and paid for the
imported merchandise is based upon an ad valorem rate, whether on the
entry summary line item or otherwise, the drawback amount determined in
(r)(4)(A)(i) above, shall not exceed an amount determined by multiplying
the actual value of the exported or destroyed articles claimed for drawback
by the ad valorem rate of such duties, taxes, or fees applicable to the
imported merchandise'.
(k) Designation of merchandise by successor – Section 313(s) of the Tariff
Act of 1930 (19 U.S.C. 1313(s)) is amended –
(1) in paragraph (2)(B) by striking the text therein and inserting in its
place ‘imported merchandise, commercially interchangeable
merchandise, or merchandise referred to under the same eight-digit
classification of the Harmonized Tariff Schedule of the United States,
or any combination thereof, which the predecessor received, before
the date of succession pursuant to subsection (j)(2)(C), from the
person who imported and paid any duty, tax or fee due on the
imported merchandise.’; and
(2) in paragraph (4) by striking subparagraphs (A) and (B) and
inserting therein ‘the transferred merchandise was not and shall not be
claimed by the predecessor.’
(l) Drawback certificates -- Section 313 of the Tariff Act of 1930 (19 U.S.C.
1313) is amended by striking subsection (t).
(km) Drawbacks for Recovered Materials- Section 313(x) of the Tariff Act
of 1930 (19 U.S.C. 1313(x)) is amended by striking `and (c)' and inserting
`(c), and (j)'.
(l) Definitions- Section 313 of the Tariff Act of 1930 (19 U.S.C. 1313) is
amended by adding at the end the following:
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`(z) Definitions- In this section:
`(1) DIRECTLY- The term `directly' means a transfer of merchandise
or an article from 1 person to another person without any
intermediate transfer.
`(2) HTS- The term `HTS' means the Harmonized Tariff Schedule of
the United States.
`(3) INDIRECTLY- The term `indirectly' means a transfer of
merchandise or an article from 1 person to another person with 1 or
more intermediate transfers.
`(4) SCHEDULE B- The term `Schedule B' means the Department of
Commerce Schedule B, Statistical Classification of Domestic and
Foreign Commodities Exported from the United States.
`(5) SUBSTITUTE MERCHANDISE; SUBSTITUTE ARTICLE- The terms
`substitute merchandise' and `substitute article' mean-`(A) a good that is classifiable within the same 8-digit HTS
subheading number as another good (the Schedule B number
may be used to demonstrate this fact) whether imported or
domestic; or
`(B) a good demonstrated to have been classifiable within the
same 8-digit HTS subheading number as another good at
some point during the 5-year period beginning on the date of
importation of the designated imported merchandise (the
Schedule B number may be used to demonstrate this fact)
whether imported or domestic.'.
(mn) Effective Date(1) IN GENERAL- The amendments made by this section shall-(A) take effect on the date of the enactment of this Act; and
(B) except as provided in paragraph (2), apply to drawback
claims filed with respect to merchandise that enters the United
States on or after such date of enactment.
(2) TRANSITION RULE- During the 2-year period beginning on the
date described in paragraph (1)(A), a person may elect to file a
claim for drawback under-(A) section 313 of the Tariff Act of 1930, as amended by this
section; or
(B) section 313 of the Tariff Act of 1930, as in effect on the
day before the date described in paragraph (1)(A).
(n) Government Accountability Office Report- Not later than one year after
the date of enactment of this Act, the Comptroller General of the United
States shall submit to the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the Senate a report that
contains-(1) a description of the implementation of section 313 of the Tariff
Act of 1930 (19 U.S.C. 1313), as amended by this section;
(2) an evaluation of the modernization of drawback and refunds
under subsection (b) of section 313 of such Act (relating to
substitution for drawback purposes), as amended by this section;
{N2994032.2}
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(3) an evaluation of extending the modernization of drawback and
refunds to subjection (j) of section 313 of such Act (relating to
unused merchandise drawback), as amended by this section; and
(4) recommendations for the processing of drawback claims under
the Automated Commercial Environment computer system
authorized under section 13031(f)(5) of the Consolidated Omnibus
Budget and Reconciliation Act of 1985 (19 U.S.C. 58c(f)(5)).
{N2994032.2}
2827402
B O A R D
O F
G O V E R N O R S
Claib Cook (Secretary-Treasurer)
General Motors Corporation
Jerry Cook
Hanesbrands Inc.
Michelle Forte
Charter Brokerage Services
Lori Goldberg (Vice Chair – Education and Annual Conference)
Avery Dennison Corporation
Susie Hoeger
Abbott Laboratories
Steve Johnsen (Chair Emeritus)
Bayer Corporation
Karen Kelly (Vice Chair - Membership and Communication)
Becton Dickinson and Company
Bruce Leeds
Braumiller Law Group
Michael Leightman
Ernst & Young, LLC
Robert Leo
Meeks, Sheppard, Leo & Pillsbury
Karen Lobdell
Integration Point
Matt McGrath
Barnes, Richardson & Colburn
Kathleen Murphy
Drinker Biddle & Reath LLP
Shanna O’Brien (EC)
Eaton Corporation
Julie Parks (EC)
Raytheon
Steve Pasienski (EC)
Toyota Motor Sales, U.S.A., Inc.
Beth Peterson
BPE Global
Mike Rafferty
Mercedes-Benz US International, Inc.
Richard Salamone
BASF Corporation
Lee Sandler
Sandler, Travis & Rosenberg
Mel Schwechter
BakerHostetler
John Sega
Northrop Grumman Corporation
Katherine Terricciano (Chair)
Philips Electronics N.A.
Virginia Thompson
Crate & Barrel
Matthew Varner
Nike Inc.
Theresa Walker
Cargill, Incorporated
Ken Weigel
Alston & Bird
Phyliss Wigginton (Chair-Elect)
Mitsui & Company (USA), Inc.
Kevin Willis
Tyco Fire & Security
Doug Zuvich
KPMG LLP