Originally enacted in 1789 as part of the Original Tariff Act, duty drawback is the refund of 99% of the duties, taxes, fees and tariffs paid to Customs and Border Protection on merchandise imported into the United States that is subsequently exported or destroyed.
The drawback lifecycle, from duty paid at entry to refund received from CBP.
The company imports merchandise into the U.S. and pays duties, fees, and taxes to Customs and Border Protection.
Company exports goods in the same condition or as a component of a manufactured article that is exported.
Alliance validates all required data elements, tests supporting documentation, and uses our proprietary software APOLLO to optimize matching options.
Claimants using the Accelerated Payment Privilege can receive refunds within 30 days of claim submission.
A duty drawback program is the ongoing system a company puts in place to recover import duty year after year, not a single one-off claim. It combines the right CBP privileges, a clean flow of data and documentation, and licensed oversight so that every eligible export is turned into a refund. A well-run duty drawback program pays out predictably, survives an audit, and keeps recovering for as long as you import and export.
A duty drawback program begins with a review of your import and export history to confirm eligibility, identify the qualifying matches, and size the refund before any work begins. Our free assessment is the fastest way to see what your program is worth.
Start with a free assessmentThe privileges you hold with Customs decide how fast and how smoothly a program runs. Accelerated Payment returns refunds within 30 days, Waiver of Prior Notice removes export hold-ups, and a one-time filing of claims privilege streamlines every future claim. Alliance applies for and manages these on your behalf.
See how we manage your programA drawback program lives or dies on documentation. The program pulls 7501s, commercial invoices, and bills of lading directly from your brokers and forwarders, validates every record, and retains it audit-ready for the full five-year claim window. No email chasing and no manual filing.
Learn how documents are handledClaims are matched by Apollo for the highest compliant recovery, filed through ACE by a licensed U.S. Customs broker, and supported through compliance reviews and audits. You get the upside of the technology and the accountability of a licensed program manager.
Explore the full managed serviceThe statutory drawback filing provisions found in the Tariff Act of 1930 as Amended.
Unused Merchandise Drawback allows for the refund of import duty on merchandise exported product in essentially the same condition. This provision allows for an extensive list of incidental operations, such as testing, cleaning, and painting. Essentially any value-added process short of a manufacturer, as defined above, is allowable under unused merchandise. However, the merchandise cannot be used in the United States for its intended purpose prior to exportation.
Learn more about unused merchandise drawbackManufacturing drawback involves raw materials and component parts that are used to make a new and different article of commerce that is subsequently exported. The production process must result in a product with either a new name, character, or use.
Learn more about manufacturing drawbackAn industry specific drawback filing provision that allows for the refund of duties on the export of domestically produced petrochemicals in exchange (substituted) for chemicals imported into the United States, so long as they both fall within the same 8-digit HTSUS classification. Not all of the qualifying chemicals are derived from petroleum and we created a guide to help you identify if your imported chemicals meet the requirements.
Learn more about petrochemical drawbackRejected Merchandise Drawback involves imported materials that do not meet specifications at the time of importation or are shipped without the consent of the consignee. The duty paid imported merchandise can be either exported or destroyed under Customs supervision to qualify. This provision does allow for the use of the merchandise in the US. For example, imported shoes are sold at the retail and returned by the consumer due to a defect.
Learn more about rejected merchandiseThese are the two methods used to match exports back to duty-paid imports.
The Direct Identification method uses lot number and serial number tracking to match an exported product with its exact importation. In the absence of lot numbers and serial number tracing, a claimant can instead utilize one of the acceptable accounting methods as a way of complying with the requirements.
Learn more about direct identification drawbackThe Substitution method allows claimants to match “similar” merchandise within very broad time frames. The definition of “similar” products has evolved over the years with the amendment of the law. The most recent change to the law via the Trade Facilitation and Enforcement Act (TFTEA) defines like merchandise as products that fall within the same 8 digit Harmonized Tariff Schedule Number. The ability to use the substitution method applies to both manufacturing as well as unused, but the rules vary for each.
Learn more about substitution drawbackWhich import is designated against which export decides how much of a claim is actually recovered. Apollo evaluates every compliant combination at once rather than matching in sequence. Alliance runs the whole program as a fully managed duty drawback service, from data collection to filed claim.
Fees, taxes, and tariffs that are eligible for duty drawback. See the full breakdown in our tariff drawback cheat sheet.
Under Section 301 of the Trade Act of 1974, the US Trade Representative’s Office, under the direction of the Trump Administration, initiated an investigation to determine whether China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation are unreasonable, unjustifiable, or discriminatory and burden or restrict U.S. commerce. The resulting Section 301 action places a 25% punitive duty beginning September 2018. Section 301 tariff duty is eligible for refund with drawback.
Learn more about Section 301 refundsThe importation of certain goods, such as alcoholic beverages and tobacco products, are subject to Federal Excise Tax and eligible for duty drawback refund.
Learn more about excise tax refundsThe Merchandise Processing Fee (MPF) and Harbor Maintenance Fee (HMF) incurred upon importation into the United States are eligible for duty drawback refund.
Learn more about MPF & HMF refundsOther ways to maximize your duty drawback program.
The regulations (found in 19 CFR 190) allow for the transfer of drawback rights when the importer and exporter of record are not the same company. In the industry, this is referred to as Multiple Party or Third-Party Drawback.
Specifically, the third-party importer (Company A) can transfer the duty paid imports to the exporter (Company B) with any record that provides the necessary data elements for the exporter to prepare and submit a claim for duty refund. Conversely, if the third-party importer wants to retain the claimant rights, and thus control the preparation and submission of the claim, the importer needs to secure a waiver of drawback rights from the exporter.
Learn more about third party drawbackDuty Drawback Trading uses potential trading partners, identified by a third-party trading provider, to facilitate the exchange of goods between two unaffiliated companies with excess imports and exports to claim duty refunds using drawback. Specifically, imports and exports of the same HTSUS code.
It solves a common mismatch. A company can be sitting on years of duty paid imports with no qualifying exports to match against, while another company exports the same commodity without having paid duty. Neither can file a claim alone.
Learn more about drawback tradingTariff rulings and CBP guidance, explained by licensed drawback specialists.
Duty drawback means recovering import duty you have already paid, once the goods or goods of the same kind leave the country. It is a refund administered by U.S. Customs and Border Protection, not an exemption, so the duty is paid at import and claimed back afterwards.
In customs terms a drawback is a refund of duties, taxes and fees collected on importation, returned when the merchandise is exported or destroyed. In the United States it is governed by 19 U.S.C. 1313 and administered by CBP.
The statutory maximum is 99 percent of the duties, taxes and fees paid on the imported merchandise. Merchandise processing fees and harbor maintenance fees are recoverable alongside the duty itself.
Merchandise must be exported or destroyed within five years of the date of importation, and the claim must be filed inside that same five-year window.
The statutory provisions are Unused Merchandise Drawback under 19 USC 1313(j)(1) and 1313(j)(2), Manufacturing Drawback under 19 USC 1313(a) and 1313(b), Petrochemical Drawback under 19 USC 1313(p), and Rejected Merchandise Drawback under 19 USC 1313(c).
Two methods are used. Direct Identification uses lot and serial number tracking, or an acceptable accounting method, to match an export to its exact importation. Substitution allows claimants to match similar merchandise falling within the same 8 digit Harmonized Tariff Schedule number.
Claimants using the Accelerated Payment Privilege can receive refunds within 30 days of claim submission.
The main types of duty drawback are unused merchandise drawback under 19 U.S.C. 1313(j)(1) and 1313(j)(2), manufacturing drawback under 1313(a) and 1313(b), petrochemical drawback under 1313(p), and rejected merchandise drawback under 1313(c). Exports are matched to duty-paid imports by direct identification or by substitution within the same 8-digit HTS.
CBP drawback is duty drawback administered by U.S. Customs and Border Protection. It refunds up to 99 percent of the duties, taxes and fees paid at import once the goods, or goods of the same kind, are exported or destroyed, under 19 U.S.C. 1313.
A duty drawback program is the ongoing system a company uses to recover up to 99 percent of the import duties, taxes and fees it pays, year after year, once the goods or goods of the same kind are exported or destroyed. It combines CBP privileges such as Accelerated Payment, a validated data and document pipeline, and licensed broker oversight, so eligible exports are turned into refunds on a repeatable basis rather than as a single claim.
Setting up a duty drawback program involves four steps: assess your import and export history to confirm eligibility and size the refund; secure CBP privileges such as Accelerated Payment and Waiver of Prior Notice; build a validated pipeline for the required documents including 7501s, invoices and bills of lading; and file, optimize and defend claims through ACE with a licensed U.S. Customs broker. A licensed provider can apply for the privileges and run the program on your behalf.
A duty drawback company recovers the import duties, taxes and fees a business has paid, once the goods or goods of the same kind are exported or destroyed. A full-service duty drawback company runs the entire program end to end: it confirms eligibility, secures CBP privileges, collects and validates the supporting documents, prepares and files claims through ACE, and defends them under audit. At Alliance every step is handled in-house by licensed U.S. Customs brokers, and claims are matched by the Apollo platform for the highest lawful recovery.
Choose a dedicated drawback specialist rather than a general customs broker that offers drawback as a side service, because specialists recover more and their claims hold up better under audit. Confirm the work is owned by a licensed U.S. Customs broker, that the company manages the full program end to end including CBP audit defense, and that it optimizes how imports and exports are matched to maximize the lawful refund. Alliance is a full-service duty drawback specialist that has filed claims since 2001, with billions of dollars in claims filed and up to 99 percent of eligible duties recovered.
Duty drawback companies fall into two camps: general customs brokers that offer drawback as one service among many, and dedicated specialists that do nothing else. The difference shows up in how much duty you recover and how well a claim holds up under audit. Alliance is a full-service duty drawback specialist, with every step managed end to end by licensed U.S. Customs brokers.
A general customs broker files entries, classifies goods, and handles drawback on the side. A specialist works drawback every day, across every provision and industry, and knows where recoverable duty hides. Alliance has filed duty drawback claims since 2001 and does nothing else.
Meet the specialistsA full-service duty drawback company owns the whole program: eligibility analysis, data aggregation and validation, document collection, claim preparation and filing through ACE, CBP audit defense, and ongoing compliance. Nothing is handed back to your team half finished.
See the managed serviceRecovery depends on how imports and exports are matched. Apollo weighs every compliant import-to-export combination and solves for the highest lawful refund, instead of matching in sequence and stranding duty under the lesser-of value rule. That is duty other providers leave behind.
How Apollo optimizes recoveryEvery Alliance claim is owned by a licensed U.S. Customs broker and built to survive an audit. Decades of filing, billions of dollars in claims, and up to 99% of eligible duties, taxes, and fees recovered.
Start with a free assessment