Duty Drawbacks FAQs

What is a Duty Drawback?

A Duty Drawback is a refund on duties, taxes, and fees paid on imported goods, that are later exported as unused or as finished product. It can also include merchandise destroyed under U.S. Customs supervision. Drawbacks were introduced by CBP to reduce costs and incentivize exports – spurring on the economy.

What are the Types of Duty Drawback?

There are three major types of Customs Border Patrol- CBP duty drawback returns.

 

Unused Merchandise Drawback provides for drawback upon the exportation or destruction under CBP supervision of imported merchandise upon which was paid any duty, tax, or fee, if the merchandise has not been used within the United States before such exportation or destruction.

 

Manufacturing Drawback provides for drawback upon the exportation or destruction under CBP supervision of commodities manufactured or produced in the United States with the use of imported merchandise, provided that those articles have not been used in the United States prior to such exportation or destruction.

 

Rejected Merchandise Drawback provides for drawback upon the exportation or destruction under CBP supervision of imported merchandise which has been entered, or withdrawn from warehouse, for consumption, duty-paid, and which:

 

  • Does not conform to sample or specifications;
  • Has been shipped without the consent of the consignee; or
  • Has been determined to be defective as of the time of importation; or
  • Ultimately sold at retail by the importer or the person who received the merchandise from the importer, and for any reason returned to and accepted by the importer or the person who received the merchandise from the importer.

How Long Does it Take to Receive a Duty Drawback Refund?

The answer varies greatly. Once Duty Drawback privileges approvals are received, with Accelerated Payment Privilege, checks are typically issued 4 to 6 weeks after the drawback claim is filed. If no accelerated payment privileges are applied, then it can take one to two years or more to receive a duty drawback refund.

What is the Duty Drawback Accelerated Payment Privilege?

The Accelerated Payment privilege allows the claimant to receive duty drawback payment based on when the claim is filed. Without this privilege the claimant would need to wait until the entry has liquidated. That process can take one to two years or more. With this privilege, payment of claims may be paid as quickly as four to six weeks.

Want More Info? Contact Us Today!

How Much is the Duty Drawback Refund?

If imported merchandise is unused and exported, manufactured into another product and exported, or destroyed under Customs supervision, up to 99 percent of the duties, taxes and/or fees paid on the merchandise may be recovered.

How Much Do Duty Drawback Broker Services Cost?

Duty drawback broker service fees vary greatly depending on the types of drawback and the wide variation of circumstances.   For a specific quote, please Contact Us and we will provide you with an estimate of fees.

How Long Will Duty Drawback Program Approval Take?

A company new to duty drawbacks will need to apply to U.S. Customs for their Accelerated Payment Request and Waivers for both prior and future notice, as well as certain other privileges where applicable. The regulations state after receipt of the Duty Drawback Privileges package, U.S. will either approve or respond for further information within 90 days of receipt. So, under normal circumstances, after the applications are submitted, it can take from 3 to 6 months for approval.

Contact

Have questions? Click below to contact us anytime. Click here to send us an email. Or call us and speak directly with one of our experts (Monday through Friday, 8 a.m. to 5 p.m. ET). 

Schenker, Inc.
Trade Advisory & Risk Solutions
41 Pinelawn Road, Suite 110
Melville, NY 11747
Phone +1 (844) 724-8723 (in USA)
Phone +1 (516) 690-2171 (outside USA)
TradeSolutionsUS@dbschenker.com