Generated by All in One SEO Pro v5.0.0.1, this is an llms-full.txt file, used by LLMs to index the site. # Alliance Drawback Services | Your Duty Drawback Experts! Your Duty Drawback Experts! ## Posts ### [Section 232: Drawback Relief for Pharma Tariffs](https://alliancechb.com/section232-pharma-tariffs/) **Published:** May 20, 2026 **Author:** Anthony Nogueras **Excerpt:** When the President’s April 2, 2026 proclamation under Section 232 of the Trade Expansion Act of 1962 (19 U.S.C. § 1862) imposed a default 100% ad valorem duty on imports of patented pharmaceuticals and active pharmaceutical ingredients (APIs) listed in Annex I (see our cheat sheet) the industry response was predictable: spreadsheets, scenario models, and a lot of anxious calls to trade counsel. But buried in clause (10) of the proclamation is a single sentence that should be on every drug importer’s whiteboard: “Drawback shall be available with respect to the duties imposed pursuant to this proclamation.” **Content:** # A spoonful of duty drawback makes the pharmaceutical tariffs go down. When the President’s [April 2, 2026 proclamation](https://www.whitehouse.gov/presidential-actions/2026/04/adjusting-imports-of-pharmaceuticals-and-pharmaceutical-ingredients-into-the-united-states/) under Section 232 of the Trade Expansion Act of 1962 (19 U.S.C. § 1862) imposed a default 100% ad valorem duty on imports of patented pharmaceuticals and active pharmaceutical ingredients (APIs) listed in Annex I (see our [cheat sheet](/Alliance_Section232_Pharma_CheatSheet.pdf)) the industry response was predictable: spreadsheets, scenario models, and a lot of anxious calls to trade counsel. But buried in clause (10) of the proclamation is a single sentence that should be on every drug importer’s whiteboard: “Drawback shall be available with respect to the duties imposed pursuant to this proclamation.” For customs and trade compliance professionals, that one sentence is a sea change. It means the full recovery toolkit codified in 19 U.S.C. § 1313 is on the table for the new pharma duties, and given a ceiling rate of 100%, the recoverable amounts are nontrivial. ## A Departure From Section 232 Precedent Historically, duties imposed under Section 232 have not been drawback eligible. Prior Section 232 actions foreclosed drawback as a matter of policy, and CBP administered them accordingly, to the point that practitioners came to treat “Section 232” and “no drawback” as effectively synonymous. But there is no statutory bar to drawback on Section 232 duties. The exclusion was always a policy choice written into the proclamation, not a command of the Tariff Act, and the April 2, 2026 pharmaceutical proclamation made the opposite choice, in plain text. ## What “Drawback Is Available” Actually Means Clause (10) opens the door to the full menu under 19 U.S.C. § 1313: - **[Unused merchandise drawback (§ 1313(j))](/duty-drawback/unused-merchandise-drawback/).** 99% of the Section 232 duty refunded when imported pharmaceuticals or APIs are exported, or destroyed, in the same condition within five years of importation. Unused merchandise substitution drawback under § 1313(j)(2) is available where qualifying merchandise (same 8 or 10-digit HTS) is exported (everywhere, but CA, MX or CL). - **[Manufacturing drawback (§ 1313(a) and (b))](/duty-drawback/manufacturing-drawback/).** Critical for API importers whose ingredients are compounded or formulated into finished dosage forms in the U.S. and then exported. Substitution manufacturing drawback under § 1313(b) is particularly useful given the fungibility of many APIs at the 8-digit HTSUS level. Dual sourcing merchandise domestically? That counts too! - **[Rejected merchandise drawback (§ 1313(c))](/duty-drawback/rejected-merchandise-drawback/).** Relevant for product that fails QC, does not conform to specification, or is shipped without consent. Returns from foreign affiliates after recall or stability failure can qualify. At a 100% duty rate, every export-bound molecule is a 99% refund candidate. ## Next Steps: From Eligibility to Refund Eligibility is the starting line, not the finish. Standing up a compliant drawback program runs in months, not weeks, which is exactly why the work should begin before the first 100% entry clears. Alliance Drawback runs the process end to end: 1. **Quantify the opportunity.** Start with a [drawback assessment](https://alliancechb.com/duty-drawback/duty-drawback-assessment/) and tariff-impact forecast. Alliance models your import and export flows against the new Section 232 rates to size the recoverable duty, so you see the dollars at stake before committing resources. This step is free and there is zero obligation. 2. **Implement the program.** New drawback programs take roughly four to six months to clear CBP application approval. Alliance uses that window to test record retention, validate your data, and build best practices and SOPs tailored to your business. Where manufacturing drawback applies, and for chemicals and APIs a specific manufacturing ruling is often required, expect up to a year to obtain that ruling from CBP Headquarters in Washington (fingers crossed). Starting early lets these tracks run in parallel rather than in sequence. 3. **Start filing.** Once the program is live, claims go in and refunds follow, paid by ACH roughly 30 days from the claim date. Paired with accelerated payment, that working-capital benefit compounds with every filing. As an end-to-end drawback provider, Alliance carries each of these stages, from the first forecast through recurring refunds, so your team can stay focused on the business while the duty comes back. ## Bottom Line A 100% tariff is a sticker-shock number, but the proclamation deliberately preserved the industry’s principal relief valve. For any importer with an export footprint, branded molecules shipped to affiliates abroad, contract-manufactured doses sent to foreign markets, U.S.-formulated drugs distributed globally, drawback is the medicine that makes the 232 tariffs go down. It all starts with a [free assessment](https://alliancechb.com/duty-drawback/duty-drawback-assessment/). Let Alliance quantify your Section 232 drawback opportunity now, well ahead of the July 31 and September 29, 2026 effective dates, so the refunds are flowing the moment you are eligible to claim them. ![author avatar](https://alliancechb.com/wp-content/uploads/2026/01/illustrated_tony.png) Anthony Nogueras CEO Anthony Nogueras, LCB, is the founder of Alliance Drawback Services and one of the few duty drawback subject matter experts in the U.S., with nearly 40 years of experience spanning petrochemicals, electronics, beverages, and agriculture. [See Full Bio](https://alliancechb.com/about-alliance-drawback-services/) [ ](https://alliancechb.com/about-alliance-drawback-services/) U.S. Customs and Border Protection Section 301 Tariffs Section 232 Tariffs International Trade Compliance **Categories:** Duty Drawback News **Tags:** drawback eligible, duty drawback, pharma, pharmaceuticals, section 232 --- ### [New Section 301 "Forced Labor" Tariffs Are Drawback-Eligible: What Importers Should Know](https://alliancechb.com/section-301-forced-labor-tariffs-drawback/) **Published:** July 29, 2026 **Author:** Anthony Nogueras **Excerpt:** The new Section 301 forced-labor tariffs (10–12.5% on 60 economies, effective July 24, 2026) are recoverable through duty drawback. Here's what that means for your refunds. **Content:** On July 24, 2026, a new Section 301 action took effect, adding duties of **10% to 12.5%** on imports from **60 economies**, 59 countries and the European Union, that the U.S. Trade Representative found were not prohibiting or effectively enforcing bans on goods made with forced labor. CBP issued filing instructions in **CSMS #69326983**, with the applicable Chapter 99 headings (9903.05.20 through 9903.06.21) and the trade-remedy reporting sequence. For companies watching their duty spend, the headline is simple: because this is a **Section 301** measure, the additional duties are **eligible for duty drawback**, the same treatment as the existing Section 301 China tariffs, and unlike the Section 232 steel, aluminum, copper, and auto tariffs, which are recoverable only through manufacturing drawback, if at all. If you export, destroy, or return qualifying merchandise, that new 10–12.5% can come back to you at up to 99%. A few things worth knowing before you assume a refund: - **Not every entry carries the duty.** Goods that qualify under USMCA, CAFTA-DR textiles and apparel, articles already subject to Section 232, civil aircraft, and certain foodstuffs, fuels, minerals, and informational materials are exempt, so there is nothing to recover on those lines. - **It stacks.** On a dutiable line, this Section 301 duty sits on top of the ordinary Column 1 rate and other trade remedies, which increases the amount potentially recoverable through drawback. - **Eligibility is case by case.** Substitution and direct-identification rules still apply: 8-digit HTS matching, the 5-year window, and proof of export or destruction. The practical takeaway: a large share of importers who had little recoverable trade-remedy duty a month ago suddenly do. If your products are sourced from any of the covered economies and you have qualifying exports, it is worth reassessing your drawback opportunity now. **Alliance Drawback Services** is a licensed U.S. Customs broker with decades of drawback experience. We will size the opportunity, identify the optimal compliant pairings, file with CBP, and defend the claim end to end. [Request a free assessment →](https://alliancechb.com/duty-drawback/duty-drawback-assessment/) *This post is for general information and is not legal advice. Tariff programs are changing quickly in 2026; confirm current requirements with a licensed customs broker before acting.* ![author avatar](https://alliancechb.com/wp-content/uploads/2026/01/illustrated_tony.png) Anthony Nogueras CEO Anthony Nogueras, LCB, is the founder of Alliance Drawback Services and one of the few duty drawback subject matter experts in the U.S., with nearly 40 years of experience spanning petrochemicals, electronics, beverages, and agriculture. [See Full Bio](https://alliancechb.com/about-alliance-drawback-services/) [ ](https://alliancechb.com/about-alliance-drawback-services/) U.S. Customs and Border Protection Section 301 Tariffs Section 232 Tariffs International Trade Compliance **Categories:** Duty Drawback News --- ### [SCOTUS Overrules IEEPA Tariffs: What Importers Should Know](https://alliancechb.com/supreme-court-tariffs-overruled/) **Published:** February 20, 2026 **Author:** Anthony Nogueras **Excerpt:** Reciprocal tariffs from the Trump administration are now confirmed duty drawback eligible, creating a major opportunity to recover tariffs on imports tied to exports. **Content:** # On February 20, 2026, the U.S. Supreme Court overruled the tariffs imposed under the International Emergency Economic Powers Act, including the Reciprocal and Fentanyl programs implemented in early 2025. IEEPA-based tariffs will no longer apply. ## Tariff Refunds The immediate question is whether importers will receive refunds of duties previously paid. Formal direction from U.S. Customs and Border Protection will determine the process, including whether refunds will be automatic, whether protests are required, and how liquidated and unliquidated entries will be handled. Until CSMS guidance is issued, companies should review affected entries and confirm applicable deadlines. ## Administration Response: Section 122 In response to the ruling, the Administration has invoked Section 122 of the Tariff Act of 1930. Section 122 authorizes temporary tariffs of up to 15 percent for a period not to exceed 150 days to address balance of payments concerns. The Administration has implemented a global 10 percent tariff under this authority. Although temporary by statute, this action introduces a new layer of duty exposure. ## Is Section 122 Duty Drawback Eligible? A critical question for exporters is whether Section 122 duties will be drawback eligible. The drawback statute broadly permits recovery of duties imposed upon importation, and on its face Section 122 duties would appear to qualify. However, initial eligibility will depend on the Administration’s position. The forthcoming executive order will direct Customs on implementation, including how these duties are to be treated. Until that order is issued, companies should avoid assumptions and evaluate both eligible and non eligible scenarios. ## Practical Considerations - Review historical IEEPA entries and assess potential refund exposure - Monitor executive action and CBP implementation guidance - Evaluate the forward impact of the 10 percent Section 122 tariff - Model drawback positions conservatively until clarified The Supreme Court’s decision removes the IEEPA framework. The use of Section 122 signals that trade policy remains active and evolving. We will continue to provide updates as additional guidance is released. ![author avatar](https://alliancechb.com/wp-content/uploads/2026/01/illustrated_tony.png) Anthony Nogueras CEO Anthony Nogueras, LCB, is the founder of Alliance Drawback Services and one of the few duty drawback subject matter experts in the U.S., with nearly 40 years of experience spanning petrochemicals, electronics, beverages, and agriculture. [See Full Bio](https://alliancechb.com/about-alliance-drawback-services/) [ ](https://alliancechb.com/about-alliance-drawback-services/) U.S. Customs and Border Protection Section 301 Tariffs Section 232 Tariffs International Trade Compliance **Categories:** Duty Drawback News **Tags:** drawback eligible, duty drawback, reciprocal tariffs, section 122, supreme court, tariffs, trump tariffs --- ### [The "Other Other" Problem](https://alliancechb.com/the-other-other-problem/) **Published:** July 8, 2018 **Author:** Anthony Nogueras **Excerpt:** The main change in duty drawback under the 2016 TFTEA was redefining the substitution provision to expand eligibility and simplify claims. **Content:** # The main change in duty drawback under the 2015 TFTEA was redefining the substitution provision to expand eligibility and simplify claims. While this “game-changer” will increase drawback recovery dramatically, the devil, as the saying goes, is in the details. ## Some Background The substitution method allows a [**drawback claimant to match**](https://alliancechb.com/import-export-matching/ "Import Export Drawback Matching") “commercially interchangeable” or like merchandise within broad time parameters instead of directly tracing an export back to its exact import. The current law and regulatory structure primarily relies upon the part number and quality specifications to determine if an import and export meet the standard of commercial interchangeability. For example, an export Grade A Orange Juice made from domestic oranges could be substituted or matched with imported Brazilian duty-paid Grade A Orange Juice because they both meet the same basic quality standards and industry specifications. In the case of merchandise identified by a part number or model number (electronics and retail merchandise, for example), generally the imported item and exported item must share the same part-number identifier to be considered substitutable for drawback purposes. As an example, a company imports sunglasses from China into its U.S. distribution facility. The majority of these glasses are sold domestically, but a portion are exported to retail stores in the Caribbean. Under the existing substitution provision, sunglasses with a model number of RB123 could be matched with any import of an RB123 that occurred within three years previous to the export date. The new drawback law eliminates entirely the concept of commercial interchangeability and instead relies upon the Harmonized Tariff Schedule Number or HTS number. The imported and exported merchandise simply need to fall within the same HTS number at the 8th digit level of the classification number. Continuing with the sunglasses example, a pair of exported Ray Bans could be matched with a pair of imported Oakley’s, assuming they are both classified under the same HTS for sunglasses (HTS Number 9004.10.00). The one huge exception to the HTS substitution rule – if the classification begins with “other” at the 8th digit, then the [**drawback claimant**](https://alliancechb.com/duty-drawback/ "Duty Drawback") must match at the 10th digit. If the HTS also begins with “other” at the 10th digit then substitution drawback is not available, and the claimant must match imports and exports at the part-number level under the provisions of direct identification drawback. These “other” classifications are catch-all baskets for merchandise without a specific classification. For example, heading 9004 is for “spectacles, goggles and the like, corrective, protective, or other”. 9004.10.00 under this heading is for “Sunglasses”. 9004.90.00 encompasses all spectacles, goggles, and the like corrective protective, OTHER than sunglasses; consequently, a drawback claimant submitting drawback on protective goggles would need to match imports and exports according to part-number level and file drawback under the provisions of direct identification drawback, at least for the products that fall into the “other” baskets. This rule will require the vast majority of existing drawback claimants to file under both the provisions of substitution drawback and direct identification where many currently file only under substitution. Warning: The regulatory compliance requirements are substantially higher for direct identification drawback claims vs. substitution claims. Exactly how a company will decrement the same import designated under two different legal provisions remains to be seen, but at least one of the methods currently being floated by Customs would be detrimental to the Trade Community. We will learn more of the specifics once the proposed regulations are published for public comment in the Federal Register, hopefully by late summer. The “other” problem also partially thwarts the legislation’s stated intention to simplify drawback by elevating claims from the more detailed part-number level to the broader classification level. CBP favored this move because Customs Automated Commercial Environment (ACE) for processing import and exports (ACE) captures data at the tariff-number level and note commercial invoice line item detail. However, an initial review of Alliance’s drawback clients found that on average about 40 percent of a company’s classifications fall into the “other” category so much of the drawback world will still operate at the part-number level even after the new regime is fully implemented. Members of the Drawback Trade Community involved in the negotiation of TFTEA reluctantly agreed to the “other” provision to avoid controversy with members of Congress that insisted on this limitation. Such a controversy could have resulted in the removal of the drawback section from the final version of the bill so the decision was made to proceed because the vast majority of the legislation was favorable to the Trade, and the law could be amended at a later date to alter or eliminate the “other” rule. The legislation also included a provision that allows a claimant to file under the existing law during a one year transitionary period until Feb. 23, 2019, so claimants not benefiting from the new law’s HTS level substitution can at least delay some of the pain of the “other” problem. We suggest that companies [**conduct a detailed analysis**](https://alliancechb.com/duty-drawback/duty-drawback-assessment/ "Duty Drawback Assessment") to determine the impact of the legislation on one’s existing drawback program in order to proceed in the most advantageous manner. ![author avatar](https://alliancechb.com/wp-content/uploads/2026/01/illustrated_tony.png) Anthony Nogueras CEO Anthony Nogueras, LCB, is the founder of Alliance Drawback Services and one of the few duty drawback subject matter experts in the U.S., with nearly 40 years of experience spanning petrochemicals, electronics, beverages, and agriculture. [See Full Bio](https://alliancechb.com/about-alliance-drawback-services/) [ ](https://alliancechb.com/about-alliance-drawback-services/) U.S. Customs and Border Protection Section 301 Tariffs Section 232 Tariffs International Trade Compliance **Categories:** Duty Drawback News **Tags:** duty drawback, hts substitution, other other, regulations, restrictions --- ### [My Customs Broker Handles That](https://alliancechb.com/my-customs-broker-handles-that/) **Published:** July 8, 2018 **Author:** Anthony Nogueras **Excerpt:** Importers often rely heavily on their Customs brokers for guidance and management of import compliance and related trade processes. **Content:** # Importers often rely heavily on their Customs brokers for guidance and management of import compliance and related trade processes. Customs brokers are knowledgeable professionals licensed by U.S. Customs and Border Protection (“CBP”). They are “plugged in” to CBP’s computer systems, and get real-time updates on changes to regulations and practices. Brokers do a complicated job with precision and speed. But there’s a limit to how much importers should rely on them. ## Importer of Record Under U.S. Customs laws and regulations, the importer of record (the actual owner or purchaser of the imported goods) is responsible for all aspects of compliance, including the correctness of entry information and the payment of duties. See 19 U.S.C. 1484(a)(1). In fact, your customs broker is merely your representative before the agency. It works much the same way as your tax return. Your accountant may prepare the return, but if extra taxes are owed, it’s not your accountant who will be paying them. Under Customs law, the penalty statute (19 U.S.C. 1592) is generally used against importers for false statements, acts, or omissions that affect compliance. (There are separate statutes generally covering brokers’ conduct.) The importer also has specific recordkeeping responsibilities. Importers are required to keep customs records (entries, invoices, purchase orders, etc.) generally for five years. The penalties for not being able to produce these records are often greater than the penalties for negligence in making the entry. As the importer of record, your company is the principal on the surety bond that is used to secure the entry of goods and payment of duties. If the duties are not paid, or if CBP finds that additional duties are owed, the importer of record, not the broker, is the responsible party. The insurance company that underwrites the bond will go to great lengths to make sure that the responsible party pays its debt. ## Supervision of Brokers Because the importer is responsible for all aspects of compliance, it is incumbent on the importer to provide accurate information and answer any questions the broker has in service of preparing the entry. Given sparse or incomplete information, and given the time pressures facing all brokers, there is a natural tendency for brokers to do the best they can with the information available. This can result in imported goods being misclassified, merchandise value not being correctly declared, and customs violations occurring. Customs brokerage is a competitive business, with a big emphasis on keeping the importer / customer happy. Pressures like these, along with insufficient supervision and communication from the importer, can lead the broker to err on the side of duty savings. For example, we’ve seen situations where brokers appear to automatically claim **[NAFTA ](https://alliancechb.com/tftea-drawback-update/ "TFTEA Drawback Update")**preference on goods from Canada or Mexico, even if the importer didn’t tell them to. **[NAFTA ](https://alliancechb.com/tftea-changes/ "TFTEA Changes")**preference is not automatic; there are specific and complicated rules in play. Similarly, some brokers tend to use the duty free “U.S. Goods Returned” provision for merchandise returning from the U.S., even if the required documentation is not present. These “favors” some brokers do for their importers are anything but favors! Duty free claims such as these increase the likelihood of Customs scrutiny of an importer, and if they were made incorrectly, they will subject the importer to bills for increased duties, as well as civil penalties under the fraud statute. Moreover, it’s important to keep in mind that while most import transactions are paperless and are not subject to an in-depth review by CBP officials, during a [**Customs audit**](https://alliancechb.com/duty-drawback-faq/ "FAQ") (or even a routine post-entry inquiry), the same transactions will be reviewed with a heightened level of scrutiny, and reviewed for complete adherence to regulatory requirements. Simply put, it’s easy for the broker to err on the side of duty savings. But it’s equally easy for CBP to question such activities, and even easier for them to issue bills for additional duties and to assess penalties. Even if the broker is only trying to help you, they’re human and can make mistakes. It’s your responsibility as the importer to check their work. You can do this yourself, or hire someone to do it for you. Many brokerages have consulting operations that offer such services. It’s best, however, to have the work checked by someone other than the person who initially performed the work. (And as you might expect a law firm to point out, only when such consulting and internal audit work is performed by a law firm is it protected under attorney-client privilege.) Your customs broker is a valuable part of the team. But YOU must also be a part. ![author avatar](https://alliancechb.com/wp-content/uploads/2026/01/illustrated_tony.png) Anthony Nogueras CEO Anthony Nogueras, LCB, is the founder of Alliance Drawback Services and one of the few duty drawback subject matter experts in the U.S., with nearly 40 years of experience spanning petrochemicals, electronics, beverages, and agriculture. [See Full Bio](https://alliancechb.com/about-alliance-drawback-services/) [ ](https://alliancechb.com/about-alliance-drawback-services/) U.S. Customs and Border Protection Section 301 Tariffs Section 232 Tariffs International Trade Compliance **Categories:** Duty Drawback News **Tags:** customs broker, duty drawback, lcb, regulations, trade compliance --- ### [Drawback Community Court Case](https://alliancechb.com/drawback-community-court-case/) **Published:** December 6, 2018 **Author:** Anthony Nogueras **Excerpt:** The statute required a two-year period for Customs to update rules and systems, moving drawback filings from the legacy ACS to fully automated claims. **Content:** # The statute required a two-year period for Customs to update rules and systems, moving drawback filings from the legacy ACS to fully automated claims. Any proposed rulemaking requires a public comment period following formal publication in the Federal Register. Customs then considers any public comments submitted and eventually publishes the final version of the new regulatory structure. The Trade Community was rightly alarmed that CBP had not even published proposed regulations in the Federal Register as the deadline date of Feb. 24, 2018, approached. Mere weeks before the deadline, CBP issued “Interim Guidance for Filing” pending final rulemaking. The interim guidelines stated CBP would suspend both the payment and liquidation (final review and disposition of a Customs transaction) of drawback claims filed using the more liberal Harmonized Tariff Schedule substitution rules (the new drawback regime allows for the matching of import and exports that fall within the same 8 digit HTS) until that time when drawback regulations were finalized. Drawback claimants could continue to receive payment for claims filed under the more restrictive rules and time frames under the legacy “Core” drawback program during a one-year transition period mandated by the new law until Feb. 24, 2019. The trade community feared that left to its own devices, CBP would reach the end of the transition period without new rulemaking in place at which point the processing and payment of drawback claims would cease entirely, a likely scenario based on CBP historical performance of 3-5 years lag time for the finalization of new regulations. The various industry association drawback committees that consist of drawback filers and Customs brokers specializing in drawback matters decided that CBP’s actions were not only in bad faith but a violation of the **[TFTEA ](https://alliancechb.com/tftea-transition/ "TFTEA Transition")**drawback statute that required Customs to implement new rulemaking by Feb. 24, 2018. The [drawback trade](https://alliancechb.com/duty-drawback/duty-drawback-trading/) community decided to let the Court of International Trade decide the matter and initiated legal action in March 2018. ## Ruling In the matter of Tabocos de Wilson, Judge Restani of the Court of International Trade held that the CBP violated the intent of the **[TFTEA ](https://alliancechb.com/tftea-drawback-update/ "TFTEA Drawback Update")**statute by failing to implement the rulemaking necessary to process TFTEA drawback claims. The Court then needed to decide on a remedy for the CBP’s misguided actions. Judge Restani asked the Trade and CBP to offer possible solutions that would allow for the processing and payment of TFTEA drawback claims submitted on or after Feb. 24, 2018, the law’s official start date. CBP, under the pressure of the detrimental ruling by the Court, decided on its own volition to publish approximately 450 pages of entirely new drawback regulations, proposed as Section 190 of the Customs Regulations. This tome was published for public comment on August 1st in part to convince Judge Restani that the government had complied with the TFTEA requirements. Given that proposed regulations have no legal effect and are not enforceable, the Court was unconvinced. The attorney representing the various industry plaintiffs proposed the immediate issuance of a limited number of rules needed specifically to implement HTS level substitution. CBP argued that it needed more time to consider all public comments, adjust provisions accordingly, and allow for review by the governing federal agencies, before finalizing rulemaking. Despite losing its case on the merits, Customs, instead of seeking middle ground, asked the Court to allow them complete latitude in finalizing the proposed regulations. Predictably, Judge Restani was unmoved by the government’s argument and its clear intent to avoid any consequence for failing to meet the statutory requirements of the TFTEA. The judge issued his final decision Slip Opinion 18-138 on October 12. ## Decision Summary The decision favorable to the Trade included the following elements: Government to publish entire NPRM by Dec. 17, 2018, and make it effective on that date: Excise tax provisions to have delayed effective date; BUT — Government, in its discretion, may elect to delay publishing any regulations other than the ones plaintiff identified as essential to carry out Section 906(g) of TFTEA. The last element essentially severely restricted the government’s ability to appeal the decision on the basis that it was unreasonable to require a compressed time period to issue the final version — 450 pages of proposed rulemaking. CBP was required only to implement the rules needed to implement TFTEA substitution as proposed by the plaintiffs’ attorney. The government could delay or implement other parts of the proposed regulations at its own discretion. ## When Can You Expect Payment? CBP most recently advised the courts that it had submitted the final version of the proposed rulemaking to the various government agencies for final review and that it anticipated meeting the court’s imposed deadline of Dec. 17, 2018, a clear indication that it chose not to appeal the decision. The drawback community expects the payment of TFTEA drawback claims to commence on or about that date. ![author avatar](https://alliancechb.com/wp-content/uploads/2026/01/illustrated_tony.png) Anthony Nogueras CEO Anthony Nogueras, LCB, is the founder of Alliance Drawback Services and one of the few duty drawback subject matter experts in the U.S., with nearly 40 years of experience spanning petrochemicals, electronics, beverages, and agriculture. [See Full Bio](https://alliancechb.com/about-alliance-drawback-services/) [ ](https://alliancechb.com/about-alliance-drawback-services/) U.S. Customs and Border Protection Section 301 Tariffs Section 232 Tariffs International Trade Compliance **Categories:** Duty Drawback News **Tags:** court case, duty drawback, regulations, trade community --- ### [Section 301 Tariff Eligibility](https://alliancechb.com/section-301-tariff-eligibility/) **Published:** December 8, 2018 **Author:** Anthony Nogueras **Excerpt:** Under Section 301, the USTR under the Trump Administration investigated whether China’s policies on tech transfer and IP unfairly burden U.S. commerce. **Content:** # Under Section 301, the USTR under the Trump Administration investigated whether China’s policies on tech transfer and IP unfairly burden U.S. commerce. The resulting Section 301 action places a 25% punitive duty on approximately $50 billion of imported industrial goods from China. ## Section 301 Line Items [**The first list that covers 818 harmonized tariff lines**](https://alliancechb.com/duty-drawback/section-301-list-1/ "Section 301 List 1") became effective on July 6th, 2018. [**The second proposed list consists of 284 HTS lines**](https://alliancechb.com/duty-drawback/section-301-list-2/ "Section 301 List 2") and is currently in the public comment phase. **[The third list covers over 6,000 tariff lines that](https://alliancechb.com/duty-drawback/section-301-list-3/ "Section 301 List 3")**, if implemented fully, would place an additional 10% duty on approximately $200 billion on US imports from China. The imposition of the duty will be a significant burden and the first priority is to see if there are not ways to avoid the payment, such as to assign another tariff classification, one that is not subject to the duty, or to source from a country other than China. ## Are There Section 301 Solutions? If there is no way to avoid that additional Section 301 duty, then you may want to look at recouping the duties on re-exports. Unlike tariffs on Steel and Aluminum promulgated under the provisions of Section 232, the Administration declared the Section 301 [**duties drawback**](https://alliancechb.com/duty-drawback/duty-drawback-case-study/) eligible in its implementing rules. Companies claiming drawback must decide whether to submit claims on Section 301 duties under the provisions of the legacy drawback law referred by the Trade Community as the “core” drawback law or whether to file under the amended drawback law passed as part of the Trade Facilitation and Enforcement Act of 2016 known by its acronym as “**[TFTEA](https://alliancechb.com/tftea-transition/ "TFTEA Transition")**” drawback. ## “Core” Drawback Operationally, filing [drawback on duties](https://alliancechb.com/duty-drawback/duty-drawback-case-study/) levied under Section 301 is no different than filing drawback on the regular rate of duty. The same legal and regulatory structure applies. A company should first assess its drawback recovery potential on both Section 301 as well as regular duties. The first step in the assessment process is to establish a Customs ACE (Automated Commercial Environment) account in order to access automated import data and generate reporting. A “look up” function can then be used to assign a 25% rate of duty to the HTS numbers on list 1 and 2 and 10% for HTS numbers on proposed list 3 in order to estimate the increase in Customs duties due to Section 310 tariffs. Next, pull export data for the same time period (the Core drawback law allows for three years of retroactive export history while the “[**TFTEA**](https://alliancechb.com/tftea-drawback-update/ "TFTEA Drawback Update")” drawback. allows for 5 years from the date of importation) from your Enterprise Resources Planning software The last step in the process requires drawback specific software to run preliminary “test” drawback claims to ascertain total potential recovery for “internal” drawback based on a company’s own import and export activity. However, more potential recovery could exist beyond one’s own export activity by partnering with exporters of US origin merchandise who export product with the same HTS. ## TFTEA The latter scenario is accomplished through the use of a special purpose company referred to as a drawback trading company. This unique drawback strategy was legally vetted in the early 2000’s by the petrochemical industry that pushed its own drawback provision through Congress as part of the Customs Modernization Act. This [**“p” provision**](https://alliancechb.com/duty-drawback/petrochemical-drawback/ "Petrochemical Drawback") of section 1313 of the Tariff Act allows for HTS level matching of imports and exports for chemicals derived primarily from petroleum. Alliance maintains an exclusive relationship with a drawback trading company that uses data mining to identify potential export partners. ![author avatar](https://alliancechb.com/wp-content/uploads/2026/01/illustrated_tony.png) Anthony Nogueras CEO Anthony Nogueras, LCB, is the founder of Alliance Drawback Services and one of the few duty drawback subject matter experts in the U.S., with nearly 40 years of experience spanning petrochemicals, electronics, beverages, and agriculture. [See Full Bio](https://alliancechb.com/about-alliance-drawback-services/) [ ](https://alliancechb.com/about-alliance-drawback-services/) U.S. Customs and Border Protection Section 301 Tariffs Section 232 Tariffs International Trade Compliance **Categories:** Duty Drawback News **Tags:** china tariffs, drawback eligible, duty drawback, regulations, section 301 tariff, trump tariffs --- ### [Multiple Party Drawback](https://alliancechb.com/multiple-party-drawback/) **Published:** June 20, 2019 **Author:** Anthony Nogueras **Excerpt:** Drawback regulations in 19 CFR 190 allow transfer of drawback rights when the importer and exporter of record are different entities. **Content:** # The drawback regulations (found in 19 CFR 190) allow for the transfer of drawback rights when the importer and exporter of record are not the same entity. While either entity can submit the drawback claim to Customs (referred to as the drawback claimant), the drawback regulations grant the exporter the first right to submit the drawback claim to Customs and Border Protection (CBP). However, if the exporter did not import the merchandise directly and pay the duty to Customs, they must then secure the cooperation of the importer of record. Specifically, the importer can transfer the duty paid imports to the exporter with any record that provide necessary data elements for the exporter to prepare and submit a claim for drawback. Required fields and data elements include the Customs Entry Number, the date of importation, duty paid, HTS, number, among others. Historically, all this information was captured on a Customs Forms CF7552 that also served to formally transfer the drawback potential associated with a duty-paid import transaction to the exporter of record. Conversely, if the importer wants to retain the drawback rights and thus control the preparation and submission of the [**drawback claim**](https://alliancechb.com/duty-drawback/ "Duty Drawback"), the importer needs to secure a [**waiver of drawback rights**](https://alliancechb.com/duty-drawback/third-party-drawback/ "Third Party Drawback") from the exporter. Additionally, the importer should also establish a procedure that provides them with a copy of the export bill of lading and commercial invoice for each export transaction included in the drawback entry. ## Confidentiality of Proprietary Information The preparation of a drawback entry requires numerous import/export data elements and documents that contain proprietary information that the importer or exporter may not want to disclose directly to the other party. To protect the confidentiality of both parties, the drawback claimant may want to engage the services of a Customs broker that specializes in drawback matters. The broker can serve as a “firewall” between the importer and export to prevent the disclosure of sensitive information in addition to executing all of the administrative steps necessary to file drawback. The broker will routinely execute a non-disclosure agreement with both entities. Most of **[Alliance’s ](https://alliancechb.com/about-alliance-drawback-services/ "Alliance Drawback Services")**manufacturing drawback clients operate under the provisions of a general ruling. If a claimant’s manufacturing drawback scenario does not fall under the provisions of a general ruling, they must then submit a request for a specific ruling to Customs Headquarters Office of Regulations and Rulings. Historically, securing a specific ruling has been a painful process that could take a year or more. ## Sharing Drawback Recovery Typically, if the importer does not perform a manufacture process on the imported duty-paid merchandise prior to delivery to the exporter, the importer will transfer drawback rights to the exporter or record without a share of the recovery. The exporter then submits the claim to CBP. Why? Because the drawback regulations grant the exporter the first right to file for drawback and because the exporter as the buyer can assert its leverage over the importer. Further, the importer passes the duty along with any other costs in the final price. The importer receives its refund of duties when the exporter pays for product. The importer may receive compensation for direct out-of-pocket administrative costs. There are exceptions to the exporter dictating the terms of the drawback transaction and receiving the vast majority of the financial benefit. The importer may try to negotiate a larger share of the recovery based on the market conditions that reduce the leverage of the exporter. For example, if only a handful of suppliers exist, and/or the product is more of a commodity where the market determines the price more so than negotiations between the buyer and seller, then the importer may attempt to negotiate a more equal split of the drawback. ## Conduct and Initial Assessment Before negotiating any type of arrangement between the parties and proceeding with the gathering of required documents and data, one must first [**estimate both the potential drawback recovery**](https://alliancechb.com/duty-drawback/duty-drawback-assessment/ "Duty Drawback Assessment") and the administrative costs to ensure sufficient return on the investments of all the parties – the importer, the exporter, and the drawback specialist. The drawback specialist should conduct the initial assessment and summarize the findings. Note that the drawback regulations allow for a 5 years of retroactive drawback recovery which can result in a significant recovery windfall in the first year after the establishment of a drawback program. ## Records Required If the exporter retains rights as the drawback claimant, the importer would ideally provide the drawback broker with a copy of the import entry documents. Specifically, the Customs Form 7501, commercial invoice, and related packing list. Short of providing the documents, the importer could provide a summary of the required data elements in the form of an Excel spreadsheet, but CBP may require the actual import documents in the event of a CBP review or audit. The exporter must commit to maintain and provide the importer or drawback broker with a copy of the export bill of lading and commercial invoice which serves as proof of export for drawback purposes. ## Liability of the Parties The new drawback regime promulgated by the [**Trade Facilitation and Enforcement Act of 2016**](https://alliancechb.com/tftea-changes/ "TFTEA Changes") formally expanded the liability of the importer of record in multiple party drawback scenarios when the importer transfers the right to claim drawback to another party. The wording of the statute makes the import jointly and severally liable for the drawback transactions. Does this mean that the importer shares the same level liability as the drawback recipient even if they do not receive the drawback refunds? No, because in the event of denial of a drawback claim, CBP will always pursue the drawback claimant first. Since all drawback claims filed under accelerated payment privileges require the posting of a drawback bond to protect the revenue of the United States, the next party in line is the surety company that provided the Customs bond. The importer of record would be the party of last resort if both the drawback claimant and the surety were unable to return the disallowed drawback payment – a very unlikely scenario. ![author avatar](https://alliancechb.com/wp-content/uploads/2026/01/illustrated_tony.png) Anthony Nogueras CEO Anthony Nogueras, LCB, is the founder of Alliance Drawback Services and one of the few duty drawback subject matter experts in the U.S., with nearly 40 years of experience spanning petrochemicals, electronics, beverages, and agriculture. [See Full Bio](https://alliancechb.com/about-alliance-drawback-services/) [ ](https://alliancechb.com/about-alliance-drawback-services/) U.S. Customs and Border Protection Section 301 Tariffs Section 232 Tariffs International Trade Compliance **Categories:** Duty Drawback News **Tags:** duty drawback, multiple party drawback, regulations, third party drawback --- ### [TFTEA Transition](https://alliancechb.com/tftea-transition/) **Published:** January 2, 2020 **Author:** Anthony Nogueras **Excerpt:** Members of the AAEI and NCBFAA, Drawback Committees, Alliance included, met with CBP Drawback Officials in Virginia in late August to review outstanding issues with TFTEA drawback and ACE drawback filings. **Content:** # Members of the AAEI and NCBFAA, Drawback Committees, Alliance included, met with CBP Drawback Officials in Virginia in late August to review outstanding issues with TFTEA drawback and ACE drawback filings. The CBP contingent consisted of national-level Customs officials from the Office of Trade Commercial Operations as well as attorneys from Regulations and Rulings. Addressing the status of the modification of manufacturing drawback rulings required by Customs as part of the transition to the new regime was the first order of business, since *not one substitution manufacturing drawback claim has been paid by Customs since the full transition to TFTEA drawback on February 24th, 2018!* ## A Bit of Background The new **[drawback](https://alliancechb.com/duty-drawback/ "Duty Drawback")** regime moved the matching of imports and exports from the part number level to the HTS level. To file manufacturing drawback, a claimant secures a **[manufacturing drawback ruling](https://alliancechb.com/duty-drawback/manufacturing-drawback/ "Manufacturing Drawback")**. The drawback ruling essentially serves as an agreement between the drawback claimant and Customs and Border Protection that outlines the rules for matching import and exports in manufacturing drawback scenarios. Over the years, Customs has published industry-general rulings that any allow any claimant to apply under its provisions. In other words, these are templates. We essentially fill in the blanks and submit to the local Customs Drawback office for approval. Most of **[Alliance’s ](https://alliancechb.com/about-alliance-drawback-services/ "Alliance Drawback Services")**manufacturing drawback clients operate under the provisions of a general ruling. If a claimant’s manufacturing drawback scenario does not fall under the provisions of a general ruling, they must then submit a request for a specific ruling to Customs Headquarters Office of Regulations and Rulings. Historically, securing a specific ruling has been a painful process that could take a year or more. As part of the [**TFTEA** ](https://alliancechb.com/tftea-changes/ "TFTEA Changes")transition, Customs required that we submit a modification letter to add the HTS numbers to a claimants existing ruling. The entire trade community assumed this to mean that Customs would then allow a claimant to file HTS level substitution under the existing approved rulings. Many HTS level Manufacturing drawback claims were filed pending payment as we waited for Customs to approve the modifications. For nearly a year, Customs did not approve the modifications, citing a concern over HTS classifications and that it needed to give the field offices more direction on the matter. We expected Customs to announce a time schedule for approval of the modifications. Instead, they dropped the proverbial bomb on the trade community. **They announced that the modifications would not allow a claimant to file [HTS level substitution](https://alliancechb.com/duty-drawback/substitution-drawback/ "Substitution Drawback") under the existing rulings and that a claimant would then need to submit a request for a specific manufacturing ruling to Headquarters!** The trade community representatives at the meeting were shocked by this revelation. After much heated debate and discussion, we pushed Customs to draft a new general manufacturing drawback ruling, and to do so in short order, lest they be inundated with specific manufacturing drawback ruling requests. The bottom line for Alliance clients: Our only path forward to receive payment for drawback claims in relatively short order is to file under [**direct identification**](https://alliancechb.com/duty-drawback/direct-identification-drawback/ "Direct Identification Drawback") [**manufacturing** ](https://alliancechb.com/duty-drawback/manufacturing-drawback/ "Manufacturing Drawback")drawback at the part number level. For those that cannot file under this provision, expect significant delays in the payment of manufacturing claims while the trade community attempts to resolve this issue with Customs. All options for the Trade Community are on the table, including bringing the matter to Congress or taking formal legal action in the Court of International Trade (we took Customs to Court last year and won). ## Other Developments - Customs Applications for Accelerated Payment and Waiver of Prior: Customs is supposed to act on drawback privilege applications within 90 days of receipt. They have been taking 6 months or more since the transition to new regime. Customs assured the Trade during the meeting that they are “working through the backlog” and are committed to keeping the 90-day standard in the future. - [**Excise Tax Drawback**](https://alliancechb.com/duty-drawback/excise-tax-drawback/ "Excise Tax Drawback"): The second formal legal action to result from Customs arbitrary administrative policy positions involves CBP’s denial of excise tax drawback under the substitution provision of the drawback law. Currently, the case is pending before the Court of International Trade. We can only hope Customs goes 0-2 in its TFTEA [**drawback court cases**](https://alliancechb.com/drawback-community-court-case/ "Drawback Community Court Case"). If you recall, Customs lost in the CIT last year in their effort to deny payment of drawback claims until the new drawback regulations were finalized. On the positive front, CBP has created a mechanism in ACE to file expiring excise tax drawback pending the outcome of the Excise tax court case. - Proof of Export for Mexico: Mexico Customs, in efforts to streamline and automate the entry process, no longer requires a printed copy of the Pedimento. Importers now have the option of presenting a “DODA.” DODA, which is an acronym for Documento de Operacion para Despacho Aduanero (Customs Clearance Operation Document), is generated through the MX Customs portal or through the designated Customs broker web service and includes a QRC (Quick Response Code) linked to a URL which lists all the related Pedimentos. When this topic was raised, Customs indicated that they have access to the electronic data supporting the Pedimento, and as long as such can be properly linked to the drawback claimant’s documents (trucking bill of lading and commercial invoice) then a printed copy of the Pedimento is not absolutely required. ![author avatar](https://alliancechb.com/wp-content/uploads/2026/01/illustrated_tony.png) Anthony Nogueras CEO Anthony Nogueras, LCB, is the founder of Alliance Drawback Services and one of the few duty drawback subject matter experts in the U.S., with nearly 40 years of experience spanning petrochemicals, electronics, beverages, and agriculture. [See Full Bio](https://alliancechb.com/about-alliance-drawback-services/) [ ](https://alliancechb.com/about-alliance-drawback-services/) U.S. Customs and Border Protection Section 301 Tariffs Section 232 Tariffs International Trade Compliance **Categories:** Duty Drawback News **Tags:** cbp, customs and border protection, duty drawback, regulations, tftea, trade enforcement facilitation act --- ### [Titanium Industry Drawback](https://alliancechb.com/titanium-industry-drawback/) **Published:** January 3, 2020 **Author:** Anthony Nogueras **Excerpt:** Section 301 tariffs on imported titanium products from China may be eligible for refund through the duty drawback program. **Content:** # Section 301 Tariffs assessed on imported titanium products from China are eligible for refund via this program. Extensive changes to any legal, and by extension, regulatory structure result in a distinct set of “winners” and “losers” – in other words, certain industries or drawback claimants benefited more from the TFTEA changes than others. Without a doubt, the titanium industry falls into the TFTEA “winner” category. To understand why, an explanation of the new drawback regime is required. ## Matching Methods: Direct Identification vs Substitution The primary rule change that benefited most drawback claimants, and particularly the titanium industry, relates to the drawback concept of *substitution*. The substitution provision of the drawback regulations allows for the matching of exports to imports that are similar, but not identical. This method is available for products exported in the same condition or those that undergo a production process. The alternative to the substitution method requires directly matching an export to its corresponding import via lot number or serial number tracing (known as the *direct identification methodology*). In the titanium industry specifically, the heat number serves as a unique identifier that would allow traceability of the titanium from import to eventual exportation for those that need to file under this method. Whenever possible, drawback claimants should take advantage of the substitution method of matching as it allows for much more flexibility and less administrative effort in that a titanium claimant would not need to trace heat numbers through inventory. ## Old Substitution Rules vs the New Standards The new drawback law substantially liberalized the substitution rules to allow more flexibility when matching import and export activity for drawback purposes. Under the previous drawback rules, the imported and exported merchandise needed to share the same material code and/or product specifications. Under the new rules, the import and the export need only share the same tariff classification number at either the 8th or the 10th digit. Using **[imported and exported beer](https://alliancechb.com/duty-drawback/excise-tax-drawback/ "Excise Tax Drawback")** as an example, under the previous regime one would need to match on the basis of brand for brand – imported Molson from Canada matched with exported Molson. Under the new standard, a beer distributor could export Sam Adams to Europe and match against imported Molson because both beers fall under the same eight-digit harmonized tariff classification. ## Previous Titanium Drawback Substitution Rules Historically, a titanium drawback claimant would need to meet and match imports/exports according to chemical specification, essentially on a grade-for-grade basis. In the case of titanium alloy Ti 6AL-4V, both the imported and exported material would need to meet this same specification. In a substitution manufacturing drawback scenario, the raw material that entered a production process (Example – titanium billet used to produce bar stock) would need to meet the same chemical specification as the imported duty paid titanium. One could not export a bar produced from Ti 6AL-4V and use it to claim drawback against an imported ingot of commercially pure titanium because the two materials were not considered of the same kind and quality under the previous rules. ## Titanium New Drawback Rules HTS level substitution under the new drawback regulations is a game changer that will result in a potentially significant increase in refunds to the titanium industry. Let’s review some specific examples of classifications for titanium products in order to understand how the industry benefits from the liberalization of the substitution provisions: - **HTS 8108.20.00** listed below for unwrought titanium includes titanium sponge, powders and ingots. There is no distinction between physical form at the 8th digit, only at the 10th, which means that titanium powder is interchangeable, or substitutable, with ingot regardless of the chemical specification. Another example to make the point – an export of titanium alloy in ingot form can be matched against an import of commercially pure titanium sponge. The one caveat would be that the drawback claimant is only eligible for a drawback refund on the lesser of the two values (import vs. export) so, in the example cited, the 15% drawback refund of duty would be assessed upon the price of the lower grade/valued product. - **HTS 8108.90.30** includes articles made of titanium such as castings. All articles that fall under this HTS would be considered interchangeable regardless of chemical composition or grade. - **HTS 8108.90.60** provides a perfect example of the only other significant restriction on HTS level drawback substitution. The HTS 8108.90.60 begins with the description of “Other” which is a catch-all basket classification, in this case for “other” articles of titanium. For “Other” classifications at the 8th digit, the drawback claimant must drill down to the 10th digit. In this example, all articles falling under 8101.90.60 include blooms, sheet bars and slabs. A drawback claim for this classification can match import and export of these three forms, once again, without regard for the grade or chemical specification. ## First Step in the Process, Conduct an Assessment As the saying goes, a company must first determine if the “juice is worth the squeeze.” In other words, is there enough recovery potential on the table to justify establishing a drawback program? To answer this question, a company must analyze its import/export activity for the past five years in order to estimate the total potential refund, as the new regulations allow for a five-year lookback period! Get your **[drawback assessment](https://alliancechb.com/duty-drawback/duty-drawback-assessment/ "Duty Drawback Assessment")** now. [**Alliance** ](https://alliancechb.com/about-alliance-drawback-services/ "Alliance Drawback Services")will evaluate your drawback potential at no cost and without obligation. ![author avatar](https://alliancechb.com/wp-content/uploads/2026/01/illustrated_tony.png) Anthony Nogueras CEO Anthony Nogueras, LCB, is the founder of Alliance Drawback Services and one of the few duty drawback subject matter experts in the U.S., with nearly 40 years of experience spanning petrochemicals, electronics, beverages, and agriculture. [See Full Bio](https://alliancechb.com/about-alliance-drawback-services/) [ ](https://alliancechb.com/about-alliance-drawback-services/) U.S. Customs and Border Protection Section 301 Tariffs Section 232 Tariffs International Trade Compliance **Categories:** Duty Drawback News **Tags:** cbp, duty refund, regulations, titanium --- ### [TFTEA Changes](https://alliancechb.com/tftea-changes/) **Published:** March 31, 2020 **Author:** Anthony Nogueras **Excerpt:** The Trade Facilitation and Trade Enforcement Act of 2016 (known by its acronym TFTEA) dramatically changed the playing field for drawback claimants. **Content:** # The Trade Facilitation and Trade Enforcement Act of 2016 (known by its acronym TFTEA) dramatically changed the playing field for drawback claimants. The more significant changes include: - A substantial liberalization of the rules for [**matching** ](https://alliancechb.com/import-export-matching/ "Import Export Drawback Matching")imports and exports for drawback purposes under the [**Substitution** ](https://alliancechb.com/duty-drawback/substitution-drawback/ "Substitution Drawback")**[Drawback](https://alliancechb.com/duty-drawback/substitution-drawback/ "Substitution Drawback")** provision. Specifically, the new rules eliminated the need to match at the part number level and allows for broader matching at the 8th digit of the Harmonized Tariff Schedule number. Example: previously, an export of Oakley sunglasses that came in duty paid (2.5% from China) would need to match to an imported pair of the same exact model number. Under TFTEA, an export of Oakley sunglasses can match against an imported pair or Ray-ban frames since both share the same HTS for “sunglasses”. - Substitute domestic and duty-free products as well! Continuing with the sunglass example, let’s say a company buys Vogue frames from a domestic producer and/or imports from Mexico duty free under NAFTA provisions. The domestic Vogue glasses and the ones that entered the US duty-free from Mexico are subsequently exported. The exported Vogue glasses from Mexico and the ones produced in the US can also be matched against the imported duty-paid Oakley glasses. - How about the eligibility of Duty Drawback **[Section 301 Tariffs](https://alliancechb.com/section-301-tariff-refunds/ "Section 301 Tariff Refunds")** on China Imports? The short answer is “yes” drawback is available on **[Section 301 Tariffs](https://alliancechb.com/section-301-tariff-eligibility/ "Section 301 Tariff Eligibility")**, and the substitution provision also applies which means you can export goods not subject to Section 301 tariffs and still claim drawback against Section 301 imports as long as the import/export share the same 8-digit HTS. - The new rules allow for a **[full five years of retroactive refunds](https://alliancechb.com/duty-drawback-faq/ "Duty Drawback FAQ")**! The previous regime limited a new filer to three years of past export activity. This is a huge expansion of recovery on past import/export activity. - And for importers/exporters of [**various chemicals**](https://alliancechb.com/duty-drawback/petrochemical-drawback-qualifying-chemicals/ "Petrochemical Drawback Qualifying Chemicals"), don’t forget about the special chemical provision found under the **[“p” provision](https://alliancechb.com/duty-drawback/petrochemical-drawback/ "Petrochemical Drawback")** of the drawback law that allows for even more flexibility than some of the other drawback provisions. - The now more flexible Substitution provision allows for “[**drawback trading**](https://alliancechb.com/duty-drawback/duty-drawback-trading/ "Duty Drawback Trading")” which matches excess import/export activity from companies not currently doing business together through the use of a special purpose trading company Do you need help understanding how these new changes, or with anything drawback related? Alliance Drawback Services can help with our [**complimentary assessment**](https://alliancechb.com/duty-drawback/duty-drawback-assessment/ "Duty Drawback Assessment") or you can [**speak with a duty drawback expert**](https://alliancechb.com/contact-alliance-drawback/ "Contact Alliance Drawback Services") today. ![author avatar](https://alliancechb.com/wp-content/uploads/2026/01/illustrated_tony.png) Anthony Nogueras CEO Anthony Nogueras, LCB, is the founder of Alliance Drawback Services and one of the few duty drawback subject matter experts in the U.S., with nearly 40 years of experience spanning petrochemicals, electronics, beverages, and agriculture. [See Full Bio](https://alliancechb.com/about-alliance-drawback-services/) [ ](https://alliancechb.com/about-alliance-drawback-services/) U.S. Customs and Border Protection Section 301 Tariffs Section 232 Tariffs International Trade Compliance **Categories:** Duty Drawback News **Tags:** duty drawback, duty refund, regulations, tftea, trade facilitation and trade enforcement act --- ### [Drawback Import & Export Matching](https://alliancechb.com/import-export-matching/) **Published:** May 21, 2021 **Author:** Anthony Nogueras **Excerpt:** Is recoverable duty being left on the table? Drawback matching methods can drastically change the recovery landscape of a company's duty drawback program. **Content:** # Is recoverable duty being left on the table? Drawback matching methods can drastically change the recovery landscape of a company’s duty drawback program. It’s a common misconception that in order for a duty paid import to be [**drawback eligible**](https://alliancechb.com/duty-drawback/ "Duty Drawback"), the very same imported product must be exported. While that is true to an extent, there is a lesser known method that can be used to claim drawback where the original import is never exported. ## Fundamentals of Direct Identification in Drawback Programs [**Direct Identification**](https://alliancechb.com/duty-drawback/direct-identification-drawback/ "Direct Identification Drawback") matching uses lot or serial number tracing to match an exported product with its exact importation. In the absence of lot or serial number tracing, an acceptable inventory accounting method can be utilized to comply with CBP requirements. For example, your company imports duty paid sunglasses into the United States, packages them and then exports them to Canada. Let’s assume that the sunglasses enter inventory using lot numbers. These lot numbers can trace the sunglasses entering your inventory and then leaving inventory when they are exported to Canada. ## How an Export Not Imported Can Qualify for Drawback Let’s say your company imports duty paid sunglasses into the United States from China. The regular duty rate of sunglasses (HTS 9004.10.0000) is 2% Ad Valorem. We need to also apply an additional 25% China Tariff rate ([**Section 301**](https://alliancechb.com/section-301-tariff-refunds/ "Section 301 Tariff Refunds")) because the import originated in China. These imported sunglasses (let’s call them Model-A) are sold in the United States. End of drawback eligibility? Nope! ## How Imports Qualify for Drawback Using Substitution Your company also domestically produces Model-B sunglasses and imports Model-C sunglasses from Australia (duty free FTA origin) that are both exported from the United States. Since Model A, B and C all fall under the same HTS 9004.10.0000 for sunglasses, the HTS number can be used to match similar product or “**[substitute](https://alliancechb.com/duty-drawback/substitution-drawback/ "Substitution Drawback")**.” ![](https://alliancechb.com/wp-content/uploads/2021/05/sunglasses_substitution_example-1024x723-1.jpg) In the example above we can substitute 6 million pieces Model-B and 6 million pieces Model-C exported sunglasses to claim drawback on the 12 million pieces Model-A sunglasses that were imported duty paid from China, using HTS 9004.10.0000. This example assumes that all of the Model-B and Model-C exports took place after the Model-A imports. ## Two Caveats of Substitution Matching 1. The HTS number can not be classified as “Other” at the 8th digit as well as the 10th digit. The is commonly referred to as “[**Other Other**](https://alliancechb.com/the-other-other-problem/ "The “Other Other” Problem")” in the industry. 2. The export destination can not be to a USMCA (formerly **[NAFTA](https://alliancechb.com/tftea-changes/ "TFTEA Changes")**) country or US territory. This includes US exports to Canada, Mexico and Chile. If the export falls within either of these two scenarios then the Direct ID matching method must be used. This does not apply to the [**manufacturing** ](https://alliancechb.com/duty-drawback/manufacturing-drawback/ "Manufacturing Drawback")provision of duty drawback. Going back to our Model-A, B and C sunglasses example – let’s assume all of the Model-B sunglasses are exported to Mexico and all of the Model-C sunglasses are exported to Brazil. Only the Model-C exports would qualify to use the substitution matching method because Model-B is exported to Mexico (USMCA) and do not trace back in inventory, cutting your recoverable duty in half. ## Regular Analysis of Imports and Exports is Key for Drawback Drawback programs should be continuously assessed. Regulatory changes, company acquisitions and new products or logistics pipelines can all impact not only your drawback recovery, but regulatory compliance as well. [**Contact**](https://alliancechb.com/contact-alliance-drawback/ "Contact Alliance Drawback Services") [**Alliance**](https://alliancechb.com/ "Alliance Drawback Services"), the duty drawback experts for a [**complimentary assessment**](https://alliancechb.com/duty-drawback/duty-drawback-assessment/ "Duty Drawback Assessment") today! ![author avatar](https://alliancechb.com/wp-content/uploads/2026/01/illustrated_tony.png) Anthony Nogueras CEO Anthony Nogueras, LCB, is the founder of Alliance Drawback Services and one of the few duty drawback subject matter experts in the U.S., with nearly 40 years of experience spanning petrochemicals, electronics, beverages, and agriculture. [See Full Bio](https://alliancechb.com/about-alliance-drawback-services/) [ ](https://alliancechb.com/about-alliance-drawback-services/) U.S. Customs and Border Protection Section 301 Tariffs Section 232 Tariffs International Trade Compliance **Categories:** Duty Drawback News **Tags:** direct identification, duty drawback, duty refunds, hts-level substitution, import export, trade compliance --- ### [Section 301 Tariff Refunds](https://alliancechb.com/section-301-tariff-refunds/) **Published:** May 26, 2021 **Author:** Anthony Nogueras **Excerpt:** Since mid-2018, Section 301 tariffs have impacted U.S. companies, affecting roughly $500 billion in goods imported from China. **Content:** # Section 301 Tariff Duties have greatly impacted U.S. Companies since their inception by the Trump Administration in mid 2018, affecting an estimated $500 billion in imported goods from China into the United States. This exponential increase in duties has left many companies scrambling for solutions to mitigate these China tariff duties. Reevaluating classifications and product designs or finding alternate sourcing could be a possible solution, but are often very complex and come at the extensive cost of supply chain and operational resources. However, there is an immediate solution to mitigate these tariff duties. Section 301 [**duties are drawback**](https://alliancechb.com/duty-drawback/duty-drawback-case-study/) eligible. ## What does that mean? When a company claims drawback on duty-paid imports that are subsequently exported it allows them to collect 99% of the regular duty paid – in addition to Section 301 duties. Since duty drawback is retroactive, you can reach back and use duty-paid imports from 5 years ago in drawback claims – perfect for recouping previously paid Section 301 tariff duty. What makes duty drawback even more interesting is the use of substitution matching, which we cover extensively in recent [**duty drawback matching**](https://alliancechb.com/import-export-matching/ "Import Export Drawback Matching") article. ## Brief example… - Your company imports 100,000 KG of product from China and paid $500,000 in total duty - The 100,000 KG of product from China is sold domestically - You company also imports 300,000 KG of product with the same HTS from Australia and it was duty-free - The 300,000 KG of product from Australia is exported out of the United States - Since both products share the same HTS and let’s assume they qualify for substitution at the 8-digit HTS, you can use the Australia origin exports to claim drawback on the China origin duty-paid imports ## Looking towards the future. There have been numerous rounds of List exclusions implemented which has helped remove some HTS codes, but as of right now we do not see China Section 301 tariffs going anywhere anytime soon. Aside from strategizing long term supply chain solutions, you should have your Company’s duty drawback program viability thoroughly assessed. There are many unique recovery scenarios in duty drawback, so it is best to [**consult a duty drawback expert**](https://alliancechb.com/duty-drawback/duty-drawback-assessment/ "Duty Drawback Assessment"). ![author avatar](https://alliancechb.com/wp-content/uploads/2026/01/illustrated_tony.png) Anthony Nogueras CEO Anthony Nogueras, LCB, is the founder of Alliance Drawback Services and one of the few duty drawback subject matter experts in the U.S., with nearly 40 years of experience spanning petrochemicals, electronics, beverages, and agriculture. [See Full Bio](https://alliancechb.com/about-alliance-drawback-services/) [ ](https://alliancechb.com/about-alliance-drawback-services/) U.S. Customs and Border Protection Section 301 Tariffs Section 232 Tariffs International Trade Compliance **Categories:** Duty Drawback News **Tags:** china tariffs, duty drawback, duty refunds, section 301, tariff refund, trump tariffs --- ### [How Section 301 Exclusions Affect Drawback](https://alliancechb.com/section-301-exclusions-drawback/) **Published:** May 5, 2022 **Author:** Anthony Nogueras **Excerpt:** On March 23, 2022, the USTR reinstated Section 301 exclusions for certain products previously subject to China tariffs. **Content:** # On March 23, 2022, the USTR (United States Trade Representative) Office announced the reinstatement of Section 301 exclusions for certain categories of products previously subject to the punitive tariffs for goods originating in China. The reinstated [**Section 301**](https://alliancechb.com/section-301-tariff-refunds/ "Section 301 Tariff Refunds") exclusions cover certain types of machinery, motors, electrical equipment, chemicals, plastics, textiles, bicycles, motorcycles, and automotive parts, among other items. The exclusions will apply retroactively from October 12, 2021 and will extend through December 31, 2022. Many companies make use of a variety of tariff mitigation strategies to lessen the financial impact of the China tariffs; including participating in duty drawback recovery programs. The drawback provisions of the Tariff Act of 1930 allow for the refund of import duties, taxes, and fees on imported merchandise that is exported directly, or matched with similar qualifying exported product of the same HTS. ## How USTR Section 301 exclusions affect your duty drawback program. Drawback claimants that seek to take advantage of exclusions should implement measures to avoid requesting an exclusion while also filing drawback against the same import HTS line; thus precipitating the need to adjust drawback claim previously paid by Customs. [**Alliance Drawback Services**](https://alliancechb.com/ "Alliance Drawback Services") recommends the following to avoid overclaiming against the same import line. ## Imports in the exclusions period have NOT yet been claimed via drawback. Request a refund of the duties via the exclusion route through post entry adjustments and protests. Provide your Alliance Drawback Analyst with a list of entry numbers, HTS line, and material codes to be refunded. Alliance will remove these lines from your import database to prevent inclusion in future drawback claims. ## Exclusion-period import drawback needs further HTS review. Provide your Alliance Drawback Analyst with a list of material codes that qualify for exclusion so your Analyst can identify potential conflicts with drawback claims of the same item. Since some “[**substitution**](https://alliancechb.com/duty-drawback/substitution-drawback/ "Substitution Drawback")” drawback programs file at the HTS level only and not the material code level, identifying and adjusting the applicable imports/material codes could present challenges. Depending on numerous variables, the Customs broker requesting the exclusion may need to breakout the material code on a different HTS line, and Alliance would need to amend the drawback claim accordingly. Consider the recovery level, administrative costs, and compliance exposure before making a final decision to seek and exclusion over filing drawback. ## Exclusion-period imports claimed under Direct ID drawback [**Direct Identification**](https://alliancechb.com/duty-drawback/direct-identification-drawback/ "Direct Identification Drawback") drawback requires material code level filing which can make the adjustments less daunting. Provide your Drawback Analyst with a list of material codes that qualify for exclusion. Alliance will return a list of entry details for those imports designated in past drawback claims. Remove these entry lines from the exclusion request. For import transactions with available balances (only partially claimed via drawback), a decision whether to seek an exclusion on the balance or leave the remainder in the import pool for possible future claiming is driven by several variables, and as such should be determined by an analytical process that maximizes the cost savings to the client. ## The bottom line of of Section 301 exclusions and drawback claims. Both drawback and exclusions can coexist, but closely coordinate with your drawback specialist and make data driven decisions to maximize the benefit while always considering regulatory compliance exposure. ![author avatar](https://alliancechb.com/wp-content/uploads/2026/01/illustrated_tony.png) Anthony Nogueras CEO Anthony Nogueras, LCB, is the founder of Alliance Drawback Services and one of the few duty drawback subject matter experts in the U.S., with nearly 40 years of experience spanning petrochemicals, electronics, beverages, and agriculture. [See Full Bio](https://alliancechb.com/about-alliance-drawback-services/) [ ](https://alliancechb.com/about-alliance-drawback-services/) U.S. Customs and Border Protection Section 301 Tariffs Section 232 Tariffs International Trade Compliance **Categories:** Duty Drawback News **Tags:** duty drawback, exclusions, section 301, tariffs, trump tariffs --- ### [Pouring Profits: New Whiskies Classification](https://alliancechb.com/pouring-profits-the-spirits-industrys-golden-opportunity-with-new-whiskey-classification/) **Published:** December 11, 2023 **Author:** Anthony Nogueras **Excerpt:** A proposed change to the tariff classification of whiskies would expand use of 19 USC 1313(j)(2) unused merchandise substitution drawback and create major excise tax savings for U.S. producers and importers if enacted. **Content:** # In the ever-evolving landscape of United States trade policy, a proposed shift in the tariff classification of “Whiskies” will allow for substantial excise tax savings by expanding the spirits industry’s ability to utilize a tax mitigation provision found in 19 USC 1313(j)(2) – better known as Unused Merchandise Substitution Drawback. This policy shift, if approved by Congress and signed into law, unlocks millions in additional tax savings benefits for U.S. whiskey producers and importers. ## Duty Drawback: A Catalyst for Growth Duty drawback, an excise tax and tariff mitigation strategy utilized by many alcohol beverage companies, facilitates the recovery of excise tax paid at the time of importation on alcohol sold in the United States when matched (substituted) to similar alcohol that is subsequently exported. The new proposed whiskey classification essentially establishes a “whiskey for whiskey” substitution standard which will allow a global spirits company that imports whiskey into the U.S. to secure a refund of excise tax assuming it also exports qualifying whiskey. ## 19 USC 1313(j)(2): Unused Merchandise Substitution The modern duty drawback regime, originally enacted in 1789 as an export incentive program, allows imported duty or excise tax paid merchandise to be matched to exports at either the 8-digit or 10-digit HTS under the legal provisions of 19 USC 1313(j)(2). Additionally, the origin of the exports does not matter – meaning a claimant can utilize domestically produced merchandise that is exported and match these transactions against imported merchandise. As example, any exported domestically produced rye whiskey could be matched with an imported Japanese whiskey, assuming the federal excise tax is paid to Customs and Border Protection at the time of importation instead of being deferred and paid to TTB. ## Whiskies Classification Barrier Currently, when considering excise tax paid on imported whiskies, many (if not all) fall under the qualifying 8-digit classification 2208.30.30, “Irish and Scotch.” Looking at the export side of the equation, U.S. exported whiskies are classified as 2208.30.60, “Other”. This expands into “Bourbon”, “Rye”, or “Other” at the 10-digit suffixes. Consequently, current drawback opportunities for whiskies limits the matching opportunities to “Irish and Scotch” imports for exports of the same – not a common scenario as most imported “Irish and Scotch” whiskey is consumed in the U.S. and not re-exported. ## Expanding Drawback Horizons At the heart of this legislative proposal lies a golden opportunity for the spirits industry: an expansion of duty drawback benefits by aligning all whiskey classification to a single 8-digit classification. Producers stand to gain significantly by making all brown whiskeys interchangeable for drawback purposes. ![](https://alliancechb.com/wp-content/uploads/2023/12/WHISKEY_CLASSIFICATION-1024x321-1.png) ## Millions in Additional Recovery Opportunities The crux of the matter lies in the downstream effect on drawback opportunities. With a more defined and specific classification, whiskey producers will unlock millions in additional recovery opportunities. Another example of the more flexible matching criteria – companies importing whiskey from Ireland will be able to match (substitute) against domestically produced Kentucky bourbon that is exported. ## Industry Enthusiasm and Forward-Looking Perspectives The spirits industry should view the proposed legislation with enthusiasm. Distillers and industry associations are actively engaging with policymakers to ensure that the new classification aligns seamlessly with the operational realities of the whiskey production process, maximizing the benefits for all stakeholders. ## Conclusion: A Win-Win for the Spirits Industry In conclusion, the proposed whiskey classification, coupled with the expansion of duty drawback benefits, marks a watershed moment for the spirits industry. The potential to unlock millions in additional recovery opportunities not only fortifies the financial resilience of producers, but also positions the industry for sustained growth and global competitiveness. As legislative discussions progress, the spirits industry eagerly anticipates the realization of this win-win scenario that promises to reshape the dynamics of the international spirits market by making US based whiskey suppliers more competitive, and by incentivizing global beverage companies to move manufacturing operations to the US to generate more drawback qualifying export sales. For further guidance on navigating the evolving landscape of duty drawback, we encourage you to reach out to Alliance Drawback Services. ![author avatar](https://alliancechb.com/wp-content/uploads/2026/01/illustrated_tony.png) Anthony Nogueras CEO Anthony Nogueras, LCB, is the founder of Alliance Drawback Services and one of the few duty drawback subject matter experts in the U.S., with nearly 40 years of experience spanning petrochemicals, electronics, beverages, and agriculture. [See Full Bio](https://alliancechb.com/about-alliance-drawback-services/) [ ](https://alliancechb.com/about-alliance-drawback-services/) U.S. Customs and Border Protection Section 301 Tariffs Section 232 Tariffs International Trade Compliance **Categories:** Duty Drawback News **Tags:** alliance drawback services, drawback education, duty drawback, excise tax, excise tax refund, federal excise tax, HTS 2208.30, whiskey, whiskies --- ### [Reciprocal Tariffs are Drawback Eligible](https://alliancechb.com/reciprocal-tariffs-are-drawback-eligible/) **Published:** April 10, 2025 **Author:** Anthony Nogueras **Excerpt:** Reciprocal tariffs from the Trump administration are now confirmed duty drawback eligible, creating a major opportunity to recover tariffs on imports tied to exports. **Content:** # In a significant development for U.S. importers and exporters, the newly announced reciprocal tariffs from the Trump administration have been confirmed as duty drawback eligible. This presents a major opportunity for companies to recover tariffs paid on imported goods when those goods, or similar articles, are subsequently exported or destroyed. ## What Are Reciprocal Tariffs? Reciprocal tariffs are part of the administration’s push to level the playing field in global trade. The policy imposes matching duties on imported goods from countries that levy higher tariffs on U.S. exports. While this move is designed to incentivize fairer trade agreements, it also increases the cost of certain imported goods in the short term. ## Drawback Eligibility: A Relief for Affected Businesses The good news? These new reciprocal tariffs are eligible for [duty drawback](https://alliancechb.com/duty-drawback/ "Tariff Duty Drawback") under 19 U.S.C. §1313. That means companies can file for refunds of the tariffs paid, provided they meet the program requirements. It’s also important to note that any regular rates of duty, [Section 301](https://alliancechb.com/section-301-tariff-refunds/ "Section 301 Tariffs") tariffs, [MPF, and HMF](https://alliancechb.com/duty-drawback/mpf-hmf-drawback-refunds/ "MPF HMF Drawback") are all drawback eligible. ## How Duty Drawback Works Duty drawback allows importers to reclaim up to 99% of duties, taxes, and fees paid on goods that are later exported, destroyed, or used to produce exported articles. There are several types of drawback programs, but for reciprocal tariffs, the most relevant categories include: - [Unused Merchandise Direct Identification 1313(j)(1)](https://alliancechb.com/duty-drawback/unused-merchandise-drawback/ "Unused Direct Identification") - [Unused Merchandise Substitution 1313(j)(2)](https://alliancechb.com/duty-drawback/unused-merchandise-drawback/ "Unused Substitution") - [Manufacturing Direct Identification 1313(a)](https://alliancechb.com/duty-drawback/manufacturing-drawback/) - [Manufacturing Substitution 1313(b)](https://alliancechb.com/duty-drawback/manufacturing-drawback/ "Manufacturing Substitution") - [Petrochemical Drawback 1313(p)](https://alliancechb.com/duty-drawback/petrochemical-drawback/ "Petrochemical Drawback") ## Key Steps to Take Now If your business has been affected by these new tariffs, here’s how you can leverage the drawback opportunity: 1. **Conduct a Tariff Impact Analysis** Identify which of your imported products are subject to reciprocal tariffs. 2. **Get a Complimentary Drawback Assessment** Alliance will conduct a [complimentary duty drawback assessment](https://alliancechb.com/duty-drawback/duty-drawback-assessment/ "Duty Drawback Assessment") help identify historical duty drawback opportunity, up to 5 years from the date of importation, and strategize your future program. 3. **Partner with a Proven Drawback Specialist** With complex data, documentation and compliance requirements, Alliance will ensure your claims are maximized, submitted and compliantly supported with Customs and Border Protection. ## Act Quickly Time is money, especially with tariffs. The typical upstart time for a new duty drawback program, pending application approval with Customs and Border Protection, is 4-6 months. The sooner you establish a compliant drawback program, the sooner you can start recovering cash flow. ![author avatar](https://alliancechb.com/wp-content/uploads/2026/01/illustrated_tony.png) Anthony Nogueras CEO Anthony Nogueras, LCB, is the founder of Alliance Drawback Services and one of the few duty drawback subject matter experts in the U.S., with nearly 40 years of experience spanning petrochemicals, electronics, beverages, and agriculture. [See Full Bio](https://alliancechb.com/about-alliance-drawback-services/) [ ](https://alliancechb.com/about-alliance-drawback-services/) U.S. Customs and Border Protection Section 301 Tariffs Section 232 Tariffs International Trade Compliance **Categories:** Duty Drawback News **Tags:** drawback eligible, duty drawback, reciprocal tariffs, tariffs, trump tariffs --- ## Pages ### [Home](https://alliancechb.com/) **Published:** August 3, 2026 **Author:** Anthony Nogueras --- ### [RSVP](https://alliancechb.com/rsvp/) **Published:** August 14, 2026 **Author:** Alliance Drawback Services **Content:** Loading your invitation… '+esc(msg)+' '; } function errFor(status){ if(status===403) return "This invitation link isn't valid. It may have been mistyped or expired. Please open the most recent email from your Alliance host, or reply to it and we'll send a fresh link."; if(status===404) return "We couldn't find this event. Please open the personal link from your invitation email."; if(status===429) return "Too many attempts right now. Please wait about a minute and try again."; if(status===400) return "This link is missing its invitation code. Please open the personal link from your email rather than typing the address in."; return "Something went wrong loading your invitation. Please try again, or reply to your invitation email and we'll help."; } if(!ev||!t){ errBox(errFor(400)); return; } fetch(API+'?ev='+encodeURIComponent(ev)+'&t='+encodeURIComponent(t)) .then(function(r){ return r.json().then(function(j){return{status:r.status,body:j};},function(){return{status:r.status,body:{}};}); }) .then(function(res){ if(res.status!==200){ errBox(errFor(res.status)); return; } render(res.body.event, res.body.attendee); }) .catch(function(){ errBox("We couldn't reach the server. Please check your connection and try again."); }); function render(e,a){ var name=(a.first\_name||'').trim(); var timeStr=(e.start\_time||e.end\_time)?(fmtTime(e.start\_time)+(e.end\_time?' – '+fmtTime(e.end\_time):'')):''; var h=' '; h+=' ![Alliance Drawback Services]('+esc(LOGO)+') '; h+=' '; h+=' You\'re invited to '; h+=' # '+esc(e.private\_event\_name)+' '; if(name) h+=' Hi **'+esc(name)+'**, we\\'d be glad to have you join us. '; h+=' --- '; if(e.venue_name||e.venue_address||e.venue_city){ var cityline=[e.venue_city,e.venue_state].filter(Boolean).join(', '); if(e.venue_zip) cityline=(cityline?cityline+' ':'')+e.venue_zip; h+=' '+ic('pin')+' '; if(e.venue_name) h+=' '+esc(e.venue_name)+' '; if(e.venue\_address) h+=' '+esc(e.venue_address)+' '; if(cityline) h+=' '+esc(cityline)+' '; h+=' '; } if(e.event\_date||timeStr){ h+=' '+ic('cal')+' '+esc(fmtDateLong(e.event\_date))+''; if(timeStr) h+=''+esc(timeStr)+''; h+=' '; } if(e.description) h+=' '+esc(e.description)+' '; if(e.rsvp\_deadline) h+=' '+ic('clock')+'Kindly reply by '+esc(fmtDateShort(e.rsvp\_deadline))+' '; h+=' --- '; h+=' Will you join us? '; if(a.accepted){ var pn=Math.max(0,Math.min(10,a.guest\_count||0)); h+=' '+ic('check')+'You previously RSVP\\'d Yes'+(pn>0?' with '+pn+' guest'+(pn>1?'s':''):'')+' — update below. '; } h+=' '; h+=''+ic('check')+'Yes, I\\'ll be there'; h+='Can\\'t make it'; h+=' '; h+=' '; h+=' Bringing additional guests? (up to 10) '; h+=' −'+(Math.max(0,Math.min(10,a.guest\_count||0)))+'+ '; h+=' '; h+='Send RSVP'; h+=' '; h+=' '; root.innerHTML=h; wireLogo(); var choice=root.querySelector('.ads-choice'); var guests=root.querySelector('.ads-guests'); var gcEl=root.querySelector('.ads-gc'); var dec=root.querySelector('.dec'), inc=root.querySelector('.inc'); var going=!!a.accepted; var count=Math.max(0,Math.min(10,a.guest\_count||0)); function syncStep(){ gcEl.textContent=count; dec.disabled=(count=10); } syncStep(); root.querySelector('.ads-yes').onclick=function(){ going=true; choice.setAttribute('data-choice','yes'); guests.style.display='block'; }; root.querySelector('.ads-no').onclick=function(){ going=false; choice.setAttribute('data-choice','no'); guests.style.display='none'; }; dec.onclick=function(){ if(count>0){count--;syncStep();} }; inc.onclick=function(){ if(countPlease choose Yes or No first.'; return; } var btn=this; btn.disabled=true; btn.textContent='Sending…'; var payload={ev:ev,t:t,response:going?'yes':'no',guest\_count:going?count:0}; fetch(API,{method:'POST',headers:{'Content-Type':'application/json'},body:JSON.stringify(payload)}) .then(function(r){ return r.json().then(function(j){return{status:r.status,body:j};},function(){return{status:r.status,body:{}};}); }) .then(function(res){ if(res.status!==200){ root.querySelector('.ads-msg').innerHTML=''+esc((res.body&&res.body.message)||"We couldn't save your reply. Please try again.")+''; btn.disabled=false; btn.textContent='Send RSVP'; return; } confirmView(e,a,going,count); }) .catch(function(){ root.querySelector('.ads-msg').innerHTML='Network error. Please try again.'; btn.disabled=false; btn.textContent='Send RSVP'; }); }; } function icsUrl(e){ var m=String(e.event\_date||'').match(/^(\\d{4})-(\\d{2})-(\\d{2})/); if(!m) return ''; var dt=m\[1\]+m\[2\]+m\[3\]; var st=((e.start\_time||'18:00').replace(':','').slice(0,4))+'00'; var et=((e.end\_time||e.start\_time||'21:00').replace(':','').slice(0,4))+'00'; var loc=\[e.venue\_name,e.venue\_address,e.venue\_city,e.venue\_state,e.venue\_zip\].filter(Boolean).join(', '); function ie(s){ return String(s||'').replace(/\\\\/g,'\\\\\\\\').replace(/;/g,'\\\\;').replace(/,/g,'\\\\,').replace(/\\n/g,'\\\\n'); } var lines=\['BEGIN:VCALENDAR','VERSION:2.0','PRODID:-//Alliance Drawback Services//RSVP//EN','BEGIN:VEVENT','UID:'+ev+'-'+Date.now()+'@alliancechb.com','DTSTART:'+dt+'T'+st,'DTEND:'+dt+'T'+et,'SUMMARY:'+ie(e.private\_event\_name),'LOCATION:'+ie(loc),'DESCRIPTION:'+ie(e.description||''),'END:VEVENT','END:VCALENDAR'\]; try{ return URL.createObjectURL(new Blob(\[lines.join('\\r\\n')\],{type:'text/calendar'})); }catch(x){ return ''; } } function confirmView(e,a,going,count){ var name=(a.first\_name||'').trim(); var venue=e.venue\_name||\[e.venue\_city,e.venue\_state\].filter(Boolean).join(', '); var when=fmtDateLong(e.event\_date); var h=' '; h+=' ![Alliance Drawback Services]('+esc(LOGO)+') '; h+=' '; if(going){ h+=' '; h+=' ## You\\'re confirmed'+(name?', '+esc(name):'')+'. '; var lead=(count>0?'You + '+count+' guest'+(count>1?'s':'')+' — we look forward to seeing you':'We look forward to seeing you'); h+=' '+lead+(venue?' at **'+esc(venue)+'**':'')+(when?' on '+esc(when)+'':'')+'. '; var u=icsUrl(e); if(u) h+=' ['+ic('cal')+'Add to calendar]('+u+') '; } else { h+=' '; h+=' ## Thanks for letting us know'+(name?', '+esc(name):'')+'. '; h+=' We\\'re sorry to miss you this time, and we\\'ll be in touch about the next one. '; } // v283.6: prominent "Change my RSVP" button — the previous gray-text line // was too easy to miss. Renders as a secondary pill next to Add to calendar // and re-runs render(e,a) to reopen the response form pre-populated. h+=' Change my RSVP '; h+=' Or bookmark this page — the link stays live so you can update your reply anytime. '; h+=' '; root.innerHTML=h; wireLogo(); // Rewire Change button to reopen the original response form. e + a are // captured in this function's closure so render() gets fresh state. var chg=root.querySelector('.ads-change'); if(chg) chg.onclick=function(){ render(e,a); }; } })(); --- ### [Foreign Trade Zones vs Drawback](https://alliancechb.com/foreign-trade-zones/) **Published:** August 7, 2026 **Author:** Alliance Drawback Services --- ### [Harmonized Tariff Schedule](https://alliancechb.com/harmonized-tariff-schedule/) **Published:** August 6, 2026 **Author:** Alliance Drawback Services --- ### [What Is a Customs Broker](https://alliancechb.com/what-is-a-customs-broker/) **Published:** August 6, 2026 **Author:** Alliance Drawback Services --- ### [Drawback Documentation](https://alliancechb.com/duty-drawback/drawback-documentation-guide/) **Published:** August 5, 2026 **Author:** Alliance Drawback Services --- ### [Drawback Reporting](https://alliancechb.com/duty-drawback/drawback-reporting-guide/) **Published:** August 5, 2026 **Author:** Alliance Drawback Services --- ### [ACE Portal Setup](https://alliancechb.com/duty-drawback/ace-portal-setup/) **Published:** August 5, 2026 **Author:** Alliance Drawback Services --- ### [IEEPA Tariffs](https://alliancechb.com/duty-drawback/ieepa-tariffs/) **Published:** August 5, 2026 **Author:** Alliance Drawback Services --- ### [Duty Drawback Business Strategy](https://alliancechb.com/duty-drawback/drawback-business-strategy/) **Published:** August 4, 2026 **Author:** Alliance Drawback Services --- ### [IEEPA Refund Calculator](https://alliancechb.com/ieepa-refund-calculator/) **Published:** April 9, 2026 **Author:** Alliance Drawback Services **Content:** ## Recover YourIEEPA Tariff Refunds How the Process Works Step 1 ### Run your ACE ES-003 Report Log into ACE and pull your Entry Summary Details (ES-003) report. Export it as an Excel file. This contains all HTS codes and duty amounts needed to identify your IEEPA tariffs. [Log into ACE Secure Data Portal](https://ace.cbp.dhs.gov) [CBP ES-003 Report Instructions](https://alliancechb.com/ES003_Guide.pdf) [Don’t have an ACE account?](https://alliancechb.com/ACE_Setup_Guide.pdf) [Need more help?](https://alliancechb.com/contact) Step 2 ### Estimate Your Refund Upload your ES-003 below and we'll instantly calculate your estimated IEEPA refund for free. Your file stays in your browser and is never shared unless you choose Alliance to manage the refund process. Step 3 ### Alliance Submits Your Refunds Our licensed customs brokers can manage the entire CAPE submission process for a success-based fee of 2% of your IEEPA refund (calculated before interest), subject to a $10,000 minimum and a $100,000 cap. We handle everything: from data collection and validation through submission, refund tracking, and direct advocacy with CBP. --- ## Free Refund Estimation Confidentiality Notice: Your file is processed privately entirely in your own browser. 📊 Drop your ES-003 Excel file here, or click to browse Large files (over 50MB) will take a few moments to process. File format: .xlsx, .xls, or .csv Calculate My Refund Start Over Scanning entry lines for IEEPA codes… **Estimate only.** IEEPA calculator refund uses Line Tariff Duty Amount where present. Does not account for liquidation status, PSC eligibility, protest deadlines, drawback claimed or interest. Section 301, Section 232, and Section 122 remain in effect and are not refundable through CAPE. Let Us Manage the Refund Process Send your information for a free review and estimate. A few quick questions before we review your entries These factors affect how your refund is processed through CAPE. Answer as best you can — our brokers will follow up if needed. Have you filed any **protests** on IEEPA entries?A formal challenge filed with CBP within 180 days of liquidation.YesNoNot sure Have you filed **reconciliation** on any IEEPA entries?Used to correct entry values after the fact, often for FTA or value claims.YesNoNot sure Have you claimed **drawback** on any IEEPA entries?A duty refund for goods re-exported or destroyed after import.YesNoNot sure Have any **PSCs** already been filed on these entries?Duplicate PSC filings can cause CBP processing issues.YesNoNot sure --- Our team will reach out within 1-2 business days to discuss your refund options and next steps. Your name \* Company Email address \* Send to Alliance Confidentiality Notice: Your information is only used for refund review and will not be shared with third parties. **✓ Received — thank you!** Your estimated refund of has been sent to our team at info@alliancechb.com. A broker will be in touch within 1-2 business day. \[wpforms id=”3713″\] --- ### [Petroleum and Oil and Gas Drawback](https://alliancechb.com/duty-drawback/petroleum-drawback/) **Published:** August 3, 2026 **Author:** Alliance Drawback Services --- ### [Electronics Drawback](https://alliancechb.com/duty-drawback/electronics-drawback/) **Published:** August 3, 2026 **Author:** Alliance Drawback Services --- ### [Aerospace and Defense Drawback](https://alliancechb.com/duty-drawback/aerospace-defense-drawback/) **Published:** August 3, 2026 **Author:** Alliance Drawback Services --- ### [Chemicals Drawback](https://alliancechb.com/duty-drawback/chemicals-drawback/) **Published:** August 3, 2026 **Author:** Alliance Drawback Services --- ### [Automotive Drawback](https://alliancechb.com/duty-drawback/automotive-drawback/) **Published:** August 3, 2026 **Author:** Alliance Drawback Services --- ### [Wine and Spirits Drawback](https://alliancechb.com/duty-drawback/wine-spirits-drawback/) **Published:** August 3, 2026 **Author:** Alliance Drawback Services --- ### [Pharmaceutical Drawback](https://alliancechb.com/duty-drawback/pharmaceutical-drawback/) **Published:** August 3, 2026 **Author:** Alliance Drawback Services --- ### [How to File a Duty Drawback Claim](https://alliancechb.com/duty-drawback/how-to-file-duty-drawback/) **Published:** August 3, 2026 **Author:** Alliance Drawback Services --- ### [Duty Drawback Calculator](https://alliancechb.com/duty-drawback/duty-drawback-calculator/) **Published:** August 3, 2026 **Author:** Alliance Drawback Services --- ### [Duty Drawback News](https://alliancechb.com/duty-drawback-news/) **Published:** August 23, 2022 **Author:** Alliance Drawback Services **Content:** - Duty Drawback News Education Regulatory Updates Trade Compliance by Alliance Drawback Services - Duty Drawback News Education Regulatory Updates Trade Compliance by Alliance Drawback Services - Duty Drawback News Education Regulatory Updates Trade Compliance by Alliance Drawback Services - Duty Drawback News Education Regulatory Updates Trade Compliance by Alliance Drawback Services - Duty Drawback News Education Regulatory Updates Trade Compliance by Alliance Drawback Services - Duty Drawback News Education Regulatory Updates Trade Compliance by Alliance Drawback Services - Duty Drawback News Education Regulatory Updates Trade Compliance by Alliance Drawback Services - Duty Drawback News Education Regulatory Updates Trade Compliance by Alliance Drawback Services [ ![Reciprocal Tariffs are Drawback Eligible](https://alliancechb.com/wp-content/uploads/2022/08/cement-street-financial-downtown-shanghai-travel.jpg) ](https://alliancechb.com/reciprocal-tariffs-are-drawback-eligible/)- [Duty Drawback News](https://alliancechb.com/category/duty-drawback-news/) [](https://alliancechb.com/reciprocal-tariffs-are-drawback-eligible/) ## Reciprocal Tariffs are Drawback Eligible Completely formulate integrated methods Globally maintain multifunctional products before ubiquitous applications. 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Don’t take our word for it. We’ll prove it with a free assessment. ## Our Process ## Discover your true refund potential for new and existing programs. ### Step 1 ## Execute NDA Since Alliance will access your trade data and you’ll review proprietary reporting, we begin with a mutual NDA. This protects both parties, ensures confidentiality from day one, and establishes a secure foundation for the assessment. ### Step 2 ## Gather Reporting Data You’ll provide ACE and AES read-only access so our team can retrieve the necessary Customs reporting. If ACE isn’t set up, our experts will guide you through it. We may also request ERP sales data, broker entry reports, sample BOMs, or export documentation. ### Step 3 ## Data Validation Often overlooked by inexperienced providers, this step is critical. Our team validates datasets, identifies gaps, and ensures alignment with CBP requirements. Proper validation prevents faulty assumptions and avoids compliance issues later. ### Step 4 ## The Assessment Using [Apollo](/duty-drawback/duty-drawback-software/), our experts analyze import and export correlations, apply multidimensional matching, review any existing drawback program, and quantify the opportunity. Findings are delivered in a clear report with clear recommendations and next steps. [ Start Your Assessment ](#assess) ## You’re only as good as your provider Most companies never realize how much their provider is missing. Drawback is complex, and weak execution hides gaps that cost real money. Alliance exposes what others overlook and strengthens even the most established programs. ## Let’s start the assessment ### Request a drawback assessment Tell us about your business so we can gauge your recovery potential. All fields are used to prepare a productive intro call — nothing is shared externally. #### Contact Name \* Phone \* Work email \* Company \* #### Business Industry \* Select your industryAlcohol & BevAutomotiveChemicalsConsumer GoodsElectronics & TechFood & AgIndustrial GoodsPharmaOther How did you hear about us? \* Select an optionWebSocialConferenceReferralOutreachOther Briefly describe your business \* #### Program & Trade Profile These questions help us prep your intro call. Rough estimates are fine. Do you currently have a drawback program? \* Select an answerYesNoNot sure Do you manufacture goods in the US? \* Select an answerYesNoNot sure Approximately how much duty have you paid over the last 5 years? \* Select a rangeUnder $500K$500K – $1M$1M – $5M$5M – $25M$25M – $100MOver $100MNot sure What % of your sales are exports? \* Select a rangeUnder 10%10% – 25%25% – 50%50% – 75%Over 75%Not sure What % of those exports are to Canada or Mexico? \* Select a rangeNoneUnder 25%25% – 50%50% – 75%Over 75%Not sure **Send me the ACE/AES data prep guide.** Free PDF explaining how to pull the import/export data we’ll use for your assessment. No obligation. Request my assessment By submitting, you agree we can contact you about your assessment request. Your information is kept confidential and never shared with third parties. ✓ #### Request received We’ll follow up within one business day. In the meantime, here’s what to expect. ##### Next steps 1. **30-minute intro call.** Book a time that works for you (link below). 2. **Mutual NDA.** After the intro call, we’ll send a mutual NDA via DocuSign. 3. **Read-only CBP data access.** You’ll grant read-only access to ACE and AES-202 so we can pull your import + export history. We’ll provide guides. 4. **Assessment delivery.** We run the analysis and deliver a detailed recovery estimate PDF, typically within 2-3 weeks. [Book your 30-minute intro call →](https://outlook.office.com/book/AllianceDrawbackMeeting@alliancechb.com/s/Fui3l-SXwEi1YxPNmr3IFw2?ismsaljsauthenabled) A confirmation with these details was also sent to your email. --- ### [Contact Us](https://alliancechb.com/contact-alliance-drawback/) **Published:** October 7, 2022 **Author:** Alliance Drawback Services **Content:** #### Let’s Talk About Duty Drawback Contact Alliance Drawback Services. Give us a call or complete the form, and a duty drawback expert will be in touch with you soon. #### Phone: (727) 290-6476 #### Email: info@alliancechb.com #### Address: Alliance Drawback Services 147 2nd Ave. S. Ste 207 St. Petersburg, FL 33701 ### Contact us Tell us a bit about your company and how we can help. A team member will reach out within one business day. Name \* Work email \* Company \* Phone \* Message \* Send message By submitting, you agree we can contact you about your inquiry. We don’t share your info with third parties. ✓ #### Message received Thanks — a team member will follow up within one business day. A confirmation was sent to your email. --- ### [Ops IEEPA Calculator](https://alliancechb.com/ops-calculator/) **Published:** April 16, 2026 **Author:** Alliance Drawback Services **Content:** # Client IEEPA Refund Estimator Alliance — IEEPA Internal Analyst Tool ![Alliance CHB](https://alliancechb.com/wp-content/uploads/2026/04/LOGO_10X10_HIGHRES_LIGHT-scaled.png)## Internal Analyst Tool IEEPA Refund Calculator & Report Generator Access ToolIncorrect password. Please try again. ![Alliance CHB](https://alliancechb.com/wp-content/uploads/2026/04/LOGO_10X10_HIGHRES_LIGHT-scaled.png) Internal Analyst Tool Sign out ## IEEPA Refund Analysis Upload an ES-003 export to generate a full IOR-level refund report Client Name Analyst Name 📊Drop ES-003 Excel file here, or click to browse Accepts .xlsx, .xls, or .csv Generate Report Start Over Analyzing entries... IEEPA Refund Analysis Download PDF Report '; // IOR sections var iorHTML=''; var iorList=Object.values(iorMap).sort(function(a,b){return b.totRef-a.totRef;}); iorList.forEach(function(ior,idx){ var entryList=Object.values(ior.entries).sort(function(a,b){return b.totRef-a.totRef;}); var iorNR=ior.tot301+ior.tot232+ior.tot122+ior.totFRES+ior.totRUS+ior.totS201+ior.totReg; var iorFee=calcFee(ior.totRef); var entriesHTML=''; entryList.forEach(function(en,ei){ var linesHTML=''; if(en.lines.length>0){ var agg={}; en.lines.forEach(function(l){ if(!agg[l.hts])agg[l.hts]={hts:l.hts,type:l.type,ref:0,count:0}; agg[l.hts].ref+=l.ref;agg[l.hts].count++; }); var aggRows=Object.values(agg).sort(function(a,b){return b.ref-a.ref;}); linesHTML='HTS Breakdown '+ ''+ 'HTS CodeProgramLinesEst. Refund'+ aggRows.map(function(r){ return ''+r.hts+''+ ''+(r.type==='fentanyl'?'Fentanyl':'Reciprocal')+''+ ''+r.count+''+ ''+(r.ref>0?fmt(r.ref):'—')+''; }).join('')+ ' '; } entriesHTML+= ''+ ''+en.num+''+ ''+en.lines.length+''+ ''+(en.totRef>0?fmt(en.totRef):'—')+''+ ''+(en.totNR>0?fmt(en.totNR):'—')+''+ ''+(en.lines.length>0?'▼ HTS detail':'')+''+ ''+linesHTML+' '+ ''; }); iorHTML+= ''+ ''+ ''+ ''+ior.ior+' '+ ''+ior.lines.size+' IEEPA entry lines · '+Object.keys(ior.entries).length+' entries '+ ' '+ ''+ ''+fmt(ior.totRef)+' '+ '▼'+ ' '+ ' '+ ''+ ''+ 'IEEPA Refund '+fmt(ior.totRef)+' '+ 'Fentanyl Tariffs '+fmt(ior.totFen)+' '+ 'Reciprocal Tariffs '+fmt(ior.totRec)+' '+ 'Entry Lines '+ior.lines.size+' '+ 'Entries '+Object.keys(ior.entries).length+' '+ 'Non-Refundable '+fmt(iorNR)+' '+ ' '+ ''+ ''+ 'Entry NumberIEEPA LinesEst. RefundNon-RefundableDetail'+ entriesHTML+ ''+ ' '+ ' '+ ' '; }); document.getElementById('ior-sections').innerHTML=iorHTML; document.getElementById('results').style.display='block'; document.getElementById('results').scrollIntoView({behavior:'smooth',block:'start'}); } function metric(label,value,cls,sub,hi){ return ''+label+' '+value+' '+sub+' '; } function toggleIOR(bodyId,chevId){ var b=document.getElementById(bodyId); var c=document.getElementById(chevId); b.classList.toggle('open'); c.classList.toggle('open'); } function toggleLines(id,el){ var d=document.getElementById(id); d.classList.toggle('open'); el.textContent=d.classList.contains('open')?'▲ HTS detail':'▼ HTS detail'; } function printReport(){ var btn=document.querySelector('.btn-pdf'); btn.textContent='Generating PDF...'; btn.disabled=true; var script=document.createElement('script'); script.src='https://cdnjs.cloudflare.com/ajax/libs/jspdf/2.5.1/jspdf.umd.min.js'; script.onload=function(){ var script2=document.createElement('script'); script2.src='https://cdnjs.cloudflare.com/ajax/libs/jspdf-autotable/3.5.28/jspdf.plugin.autotable.min.js'; script2.onload=function(){ generatePDF(); btn.innerHTML=' Download PDF Report'; btn.disabled=false; }; document.head.appendChild(script2); }; document.head.appendChild(script); } function generatePDF(){ var {jsPDF}=window.jspdf; var doc=new jsPDF({orientation:'portrait',unit:'mm',format:'letter'}); var clientName=document.getElementById('client-name').value.trim()||'Unnamed Client'; var analystName=document.getElementById('analyst-name').value.trim()||''; var dateStr=new Date().toLocaleDateString('en-US',{year:'numeric',month:'long',day:'numeric'}); var NAVY=[12,28,87]; var TEAL=[26,95,122]; var RED=[255,25,34]; var WHITE=[255,255,255]; var LGRAY=[245,247,252]; var MGRAY=[228,231,236]; var GREEN=[22,163,74]; var DGRAY=[56,65,81]; var pageW=215.9; var pageH=279.4; var margin=15; var contentW=pageW-margin*2; var y=margin; // ── HEADER BAR ── doc.setFillColor(...NAVY); doc.rect(0,0,pageW,18,'F'); // Logo via image var logoUrl='https://alliancechb.com/wp-content/uploads/2026/04/LOGO_10X10_HIGHRES_DARK-scaled.png'; var img=new Image(); img.crossOrigin='anonymous'; img.onload=function(){ try{ var canvas=document.createElement('canvas'); var size=Math.min(img.width,img.height); canvas.width=size;canvas.height=size; canvas.getContext('2d').drawImage(img,0,0,size,size); var dataUrl=canvas.toDataURL('image/png'); doc.addImage(dataUrl,'PNG',margin,1,16,16); }catch(e){} finishPDF(); }; img.onerror=function(){finishPDF();}; img.src=logoUrl; function finishPDF(){ // Right side of header doc.setFont('helvetica','bold'); doc.setFontSize(9); doc.setTextColor(...WHITE); doc.text('IEEPA REFUND ANALYSIS REPORT',pageW-margin,9,{align:'right'}); doc.setFont('helvetica','normal'); doc.setFontSize(7.5); doc.setTextColor(180,195,220); doc.text('CONFIDENTIAL — INTERNAL USE ONLY',pageW-margin,14,{align:'right'}); y=26; // ── CLIENT INFO ── doc.setFont('helvetica','bold'); doc.setFontSize(14); doc.setTextColor(...NAVY); doc.text(clientName,margin,y); y+=6; doc.setFont('helvetica','normal'); doc.setFontSize(8.5); doc.setTextColor(100,110,140); doc.text('Generated '+dateStr+(analystName?' · Analyst: '+analystName:''),margin,y); y+=3; // ── DIVIDER ── doc.setDrawColor(...MGRAY); doc.setLineWidth(0.3); doc.line(margin,y+2,pageW-margin,y+2); y+=8; // ── SUMMARY METRICS ── doc.setFont('helvetica','bold'); doc.setFontSize(8); doc.setTextColor(...NAVY); doc.text('SUMMARY',margin,y); y+=4; var metrics=[ {label:'Estimated IEEPA Refund',value:document.querySelector('.metric.green .metric-value').textContent,color:GREEN}, {label:'Unique Entries',value:document.querySelector('.metric-value.b').textContent,color:NAVY}, {label:'Unique Entry Lines',value:document.querySelectorAll('.metric-value.n')[0].textContent,color:NAVY}, {label:'Unique Importers',value:document.querySelectorAll('.metric-value.n')[1].textContent,color:NAVY} ]; var mW=(contentW-9)/4; metrics.forEach(function(m,i){ var mx=margin+i*(mW+3); doc.setFillColor(...LGRAY); doc.roundedRect(mx,y,mW,16,2,2,'F'); doc.setFont('helvetica','normal'); doc.setFontSize(6.5); doc.setTextColor(100,110,140); doc.text(m.label.toUpperCase(),mx+3,y+5); doc.setFont('helvetica','bold'); doc.setFontSize(12); doc.setTextColor(...m.color); doc.text(m.value,mx+3,y+13); }); y+=22; // ── FEE NOTE ── doc.setFillColor(255,248,225); doc.roundedRect(margin,y,contentW,12,2,2,'F'); doc.setFont('helvetica','bold'); doc.setFontSize(7.5); doc.setTextColor(62,39,35); doc.text('Phase 1 Pricing: 1% of recovered amount — Min $10,000 · Max $100,000',margin+3,y+5); doc.setFont('helvetica','normal'); doc.setFontSize(7); doc.setTextColor(100,80,60); doc.text('Phase 1 covers unliquidated entries and entries within the 90-day reliquidation period. Subsequent CAPE phases will be priced separately as released by CBP.',margin+3,y+10,{maxWidth:contentW-6}); y+=18; // ── IOR TABLE ── doc.setFont('helvetica','bold'); doc.setFontSize(8); doc.setTextColor(...NAVY); doc.text('IMPORTER OF RECORD BREAKDOWN',margin,y); y+=4; // Build table rows from DOM - IEEPA entries only, no NR column var iorRows=[]; document.querySelectorAll('.ior-section').forEach(function(sec){ var ein=sec.querySelector('.ior-title').textContent.trim(); var meta=sec.querySelector('.ior-meta').textContent.trim(); var refund=sec.querySelector('.ior-refund').textContent.trim(); var lines=meta.match(/(\d[\d,]*)\s+IEEPA entry lines/); var entries=meta.match(/(\d[\d,]*)\s+entries/); iorRows.push([ein,entries?entries[1]:'—',lines?lines[1]:'—',refund]); }); doc.autoTable({ startY:y, head:[['EIN / IOR','IEEPA Entries','IEEPA Lines','Est. 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For each claim, Apollo evaluates a vast number of possible import-export matching combinations within regulatory constraints. It then determines the optimal compliant recovery strategy using advanced mathematical optimization techniques. ## 01. Advanced Optimization Advanced mathematical optimization techniques to identify the best compliant outcome. ## 02. Cloud-Scale Processing Cloud-based computing to analyze large volumes of data efficiently. ## 03. Configurable Controls Configurable controls aligned to each client’s operational structure. ## 04. Auditable Architecture Secure, centralized data architecture that supports auditability and traceability. https://youtu.be/Wq-dbeGmKOw **The process is deterministic and transparent.** Every result is tied to documented logic and defined rules. ## Built with World-Class Engineering Rigor Apollo is built by engineers and data scientists trained at leading institutions such as MIT, Georgia Tech, and Cornell, with experience building large-scale software and AI systems at companies such as Amazon, Meta, Microsoft, and Capital One. That background matters. It means the system is architected with the same principles used in high-scale financial, logistics, and technology environments. Security, scalability, computational efficiency, and reliability are foundational design considerations, not afterthoughts. > Apollo reflects both domain depth in drawback and technical depth in modern data systems. ## Security and Data Protection **Client trust is foundational.** Apollo operates within a secure cloud environment designed to maintain strict data isolation and confidentiality. Client data: - **Is not** used to train public AI models - **Is not** shared externally - **Is not** combined across accounts - **Remains** within a protected infrastructure environment The system includes audit trails and snapshot capabilities to support compliance review, validation, and documentation when required. *Your data remains your data.* ## What Apollo Delivers ## 01 Faster claim evaluation ## 02 Structured and repeatable optimization ## 03 Greater visibility into claim strategy ## 04 Clear and defensible results *Apollo brings together decades of client-specific drawback expertise and modern engineering discipline to deliver precision, scalability, and confidence.* ## See Apollo in action. We will walk through how Apollo fits your workflow and regulatory environment. [ Request a Demo ](/duty-drawback/duty-drawback-assessment/) --- ### [Privacy Policy](https://alliancechb.com/privacy/) **Published:** December 12, 2025 **Author:** Alliance Drawback Services **Content:** # Your privacy matters. Alliance Drawback Services (“Alliance CHB,” “we,” “our,” or “us”) respects your privacy and is committed to protecting the personal information you share with us. This Privacy Policy explains how we collect, use, disclose, and safeguard your information when you visit our website ## Information We Collect ## We may collect the following types of information: - **Personal Information:** Name, email address, phone number, company name, job title, and any details you provide through contact forms or inquiries. - **Automatically Collected Information**: IP address, browser type, device information, referring URLs, and browsing activity collected through cookies and analytics tools. - **Business Information**: Data related to your company’s import/export operations, if voluntarily provided for service inquiries or engagement. ## How We Use Your Information ## We use collected information to: - Respond to inquiries or service requests. - Provide customs brokerage, duty drawback, and related trade compliance services. - Improve our website, services, and user experience. - Send updates, newsletters, or relevant regulatory information (only if you’ve opted in). - Maintain legal and regulatory compliance obligations. ## Sharing and Disclosure ## We do not sell, trade, or rent users’ personal information. We may share limited information with: - Trusted partners or service providers who assist in operating our website or business. - Legal authorities when required by law or regulation. - Business partners only with your explicit consent. All partners are required to maintain confidentiality and use information solely for the purpose of providing contracted services. ## Cookies and Tracking Our website uses cookies and analytics (such as Google Analytics) to enhance performance and understand user interactions. You can control or disable cookies through your browser settings. ## Data Security We implement appropriate technical and organizational measures to protect your information from unauthorized access, disclosure, or misuse. However, no data transmission over the internet is 100% secure, and we cannot guarantee absolute security. ## Data Retention We retain your information only as long as necessary to fulfill the purposes outlined in this policy or as required by law. ## Links to Other Websites Our Site may link to third-party sites. We are not responsible for the privacy practices or content of those external sites. --- ### [About Us](https://alliancechb.com/about-alliance-drawback-services/) **Published:** October 12, 2022 **Author:** Alliance Drawback Services **Content:** ## We are your Drawback Experts. ## Headquartered in St. Petersburg, Florida & founded in 2001 by CEO Anthony Nogueras, LCB, Alliance is recognized by clients, attorneys, and brokers for its success managing complex duty drawback programs. We’ve recovered billions in refunds by strategically expanding recovery opportunities, fostering strong client collaboration, and contributing to the broader trade community through meaningful industry engagement, education, and thought leadership. ![](https://alliancechb.com/wp-content/uploads/2025/12/alliance_office_bg-2.png) ## Meet the Team ![](https://alliancechb.com/wp-content/uploads/2026/01/illustrated_tony.png) ### Anthony Nogueras, LCB Chief Executive Officer Alliance founder and licensed Customs broker with 30+ years of drawback expertise spanning petrochemical, electronics, beer & wine, and agriculture. A trusted regulatory advisor, TSN Drawback Working Group member, and frequent speaker and contributor across leading trade compliance forums. ![](https://alliancechb.com/wp-content/uploads/2026/01/illustrated_nicole.png) ### Nicole Kartchner, LCB VP of Operations Plays a key leadership role overseeing all aspects of Operations, managing and optimizing core functions, representing clients before Customs, and ensuring seamless program implementation within established timelines and targets. ![](https://alliancechb.com/wp-content/uploads/2026/01/illustrated_michelle.png) ### Michelle Burke, LCB Director of Operations Leads and manages the Operations team, provides guidance for Business Analysts to ensure efficient data validation, and develops internal proprietary data techniques and reporting. ![](https://alliancechb.com/wp-content/uploads/2026/01/illustrated_kyle.png) ### Kyle VanDeGriek, LCB Manager of Drawback Services Ensures efficient and effective operations by managing team members, implementing drawback best practices, and developing operational procedures tailored to each client account. ![](https://alliancechb.com/wp-content/uploads/2026/01/illustrated_jedd.png) ### Jedd Lancaster Director of Business Development Identifies new business opportunities and builds strategic partnerships with key decision-makers. Ensures consistent brand messaging and positioning across all marketing channels, including digital platforms, print media, and trade shows. ## Operational Support You don’t just work with one person at Alliance. Our partners are assigned a dedicated drawback team to alleviate the administrative efforts and nuanced complexities associated with compliantly managing a drawback program. ## Business Analysts #### Turning data into opportunity. Uses data-driven insights to validate data, maximize recovery, ensure compliance, and reduce common drawback issues such as discrepancies, reconciliation, export value checks, PSCs, protests, and prior disclosures. ## Drawback Analysts #### Your program champion. Each client is assigned a dedicated Drawback Analyst who manages the daily administration of their program and coordinates action items with key stakeholders to support the claim filing process. ## Document Specialists #### Ensuring the details defend you. Gathers, validates, and maintains document support from brokers, freight forwarders, customers, and vendors on our client’s behalf using various secure file transfer methods or proprietary robotics process automation. ## Data Processors #### Bridging the gap in trade data. Expertise in data processing to efficiently organize and record information for drawback provisions, including gathering 7501 entry forms, commercial invoices, and part or material-level details when line item data is missing. --- ### [Drawback Trading](https://alliancechb.com/duty-drawback/duty-drawback-trading/) **Published:** December 15, 2025 **Author:** Alliance Drawback Services **Content:** # Drawback tradingexplained. Applicable only under 19 U.S.C. §1313(p), drawback trading uses a third-party trading company to align unaffiliated companies with excess imports and exports, enabling duty refunds by matching imports and exports under the same 8-digit HTSUS classification. ## Here’s an Example of Drawback Trading ## The trading company creates a commercial bridge between the importer and exporter. ![](https://alliancechb.com/wp-content/uploads/2025/12/3-1.png) ### Identify Trade The trading company identifies two unaffiliated entities, a net importer and a net exporter, of a 1313(p) qualifying classification. ![](https://alliancechb.com/wp-content/uploads/2025/12/drawbacktrading_step2.png) ### Trade Agreement After the trade volumes are quantified, and MOU is executed between all three entities (trading company, importer and exporter). ![](https://alliancechb.com/wp-content/uploads/2025/12/drawbacktrading_step1.png) ### Execute Trade Going forward, the trading company acts as a firewall, and becomes both the importer and exporter of record on shipments. ![](https://alliancechb.com/wp-content/uploads/2025/12/4-1.png) ### Drawback Refund Duty-paid imports are matched to qualifying exports, and recoveries are distributed between all three entities after the drawback claims are filed. #### “19 CFR Part 190 – Modernized Drawback”” ## Can You Trade Other Merchandise? Drawback trading is not explicitly prohibited under 19 U.S.C. §1313(j)(2). However, unlike §1313(p), there is no CBP ruling or regulatory precedent that affirms trading under (j)(2). In addition, (j)(2) imposes strict possession and claimant requirements that are more difficult to satisfy in a trading structure. As a result, attempting drawback trading outside of §1313(p) carries a significantly higher degree of regulatory compliance risk. ## Drawback Trading Explained ## Watch and learn more about Drawback Trading. https://youtu.be/mkogoOMopss ## The Legal Language of Drawback Trading ### Toray Ruling **DRA-4-01 RR:CR:DR 230305RDC** Erik D. Smithweiss, Esq. Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP 399 Park Avenue 25th Floor New York, NY 10022-4877 RE: 19 USC § 1313(p); HRL [224420](https://www.customsmobile.com/rulings/docview?doc_id=224420&highlight=224420) (April 11, 1997); use of designated merchandise. Dear Mr. Smithweiss: This is in response to your letter dated January 5, 2004, with which you request, on behalf of your client, Toray International, Inc., (TI), and Toray Marketing & Sales America, Inc., (Tomac), a binding ruling per 19 C.F.R. § 177.2 regarding the applicability of 19 U.S.C. § 1313(p) to the facts described below. ### FACTS: TI, a Japanese company, is an exporter of [**finished petroleum derivatives**](https://alliancechb.com/duty-drawback/petrochemical-drawback-qualifying-chemicals/ "Petrochemical Drawback Qualifying Chemicals"). TI intends to enter into an arrangement with DL Trading, (DL), “for purposes of maximizing potential drawback recoveries on TI’s products imported into the United States.” DL was formed solely to maximize drawback and buys finished petroleum derivatives for import to and export from the United States. The proposed transaction at issue is as follows. TI will sell finished petroleum derivatives to DL for import into the United States. The terms of sale will be “cost, insurance, freight (CIF) to Mitsui-Soko Warehouse in Atlanta, Georgia.” DL will import the derivatives from Japan into the United States and make entry. DL will be the importer of record in all cases and then will sell the imported derivatives to Tomac under the terms “FOB Mitsui-Soko Warehouse, Atlanta, Georgia.” Tomac is an American company and is an affiliate of TI. DL will sell the merchandise to Tomac “at a price that will cover DL’s costs for the goods and customs clearance related charges, plus 50 % of DL’s actual duty payments.” The reason for this pricing structure is stated to be that DL intends to claim drawback upon exportation of finished petroleum derivatives of the “same kind and quality” as those DL bought from TI. The requestor states, “for purposes of this ruling request, it is \[to be\] assumed that the exporter of the ‘exported article’ satisfies the requirements of 19 U.S.C. § 1313(p)(2), and that DL will be a qualified ‘drawback claimant’ under 19 U.S.C. § 1313(p)(3)(C).” Finally, it is stated that the imported petroleum derivatives that DL will purchase from TI “‘will be qualified articles’ as defined in 19 C.F.R. § 191.172(a).” The requestor poses the question, will the fact that DL was formed exclusively to maximize drawback benefits; or the fact that DL buys from and sells to related entities, i.e., TI and Tomac; or the fact that DL sells the qualified articles in the U.S. below cost because profit is expected to be made upon payment of the drawback claim, preclude DL from claiming drawback per § 1313(p)? ### ISSUE: Can DL Trading claim drawback per 19 U.S.C. § 1313(p) under the circumstances described on the petroleum derivatives it purchases from TI? ### LAW AND ANALYSIS: TI and DL intend to enter into an arrangement “for purposes of maximizing potential drawback recoveries on TI’s products imported into the United States.” DL was formed solely to maximize drawback and buys finished petroleum derivatives for import to and export from the United States. DL intends to claim drawback per 19 U.S.C. § 1313(p) upon exportation of finished petroleum derivatives of the “same kind and quality” as those DL bought from TI. In HRL [228946](https://www.customsmobile.com/rulings/docview?doc_id=228946&highlight=228946) (October 3, 2000,) we said that when a drawback applicant had satisfied the statutory conditions set forth, duty shall be refunded as drawback, in accordance with the unambiguous language of the statute. In that case, CBP considered whether the importation of duty-free pharmaceuticals, which were then returned immediately to the supplier for export in order to claim drawback on previously imported commercially interchangeable merchandise, would support a claim for drawback per 19 U.S.C. § 1313(j)(2). Because we found the language of 19 U.S.C. § 1313(j)(2) “unambiguous,” we held in HRL [228946](https://www.customsmobile.com/rulings/docview?doc_id=228946&highlight=228946) that, “Congress has stated unambiguously that substitution permits a prior dutiable import to be designated against a subsequent duty-free import, so long as that foreign merchandise had been entered for consumption, and “that is the end of the matter.” Timex V.I. v. United States, 157 F.3d 879, 882 (Fed. Cir. 1998)). 19 U.S.C. § 1313(p) provides for [drawback of the duties](https://alliancechb.com/duty-drawback/duty-drawback-case-study/) paid on certain petroleum derivatives. Under § 1313(p)(1), generally, notwithstanding any other provision in § 1313, if: (A) an article \[referred to in § 1313(p) as the “exported article”\] of the same kind and quality \[as specifically defined in section 1313(p)\] as a qualified article is exported; (B) the requirements set forth in section 1313(p)(2) are met; and (C) a drawback claim is filed regarding the exported article, drawback may be paid in accordance with the provisions of § 1313(p)(4) (19 U.S.C. § 1313(p)(1)). The “notwithstanding” clause was included in order to make the requirement in 19 U.S.C. §§ 1313(a) and (b), that the export article made by the petroleum refiner be the article that is actually exported, and the § 1313(j) requirement that the export article be commercially interchangeable with the imported article, inapplicable to claims under § 1313(p). . Section 1313(p)(4) limits the amount of drawback payable under this section: The amount of drawback payable under this subsection shall not exceed the amount of drawback that would be attributable to the article– (A) manufactured or produced under subsection (a) or (b) by the manufacturer or producer described in clause (i) or (ii) of paragraph (2)(A), or (B) imported under clause (iii) or (iv) of paragraph (2)(A) had the claim [qualified for drawback](https://alliancechb.com/duty-drawback/petrochemical-drawback-qualifying-chemicals/) under subsection (j). (19 U.S.C. § 1313(p)(4)). Thus, in order for DL to claim drawback (per 1313(p)), the exported article must be of the “same kind and quality” per 1313(p)(3)(B) as the “qualified article” (per 1313(p)(3)(A)), and the requirements set forth in § 1313(p)(2) must be met; and a drawback claim must be filed. “For purposes of this ruling request, it is \[to be\] assumed that DL will be a qualified ‘drawback claimant’ under 19 U.S.C. § 1313(p)(3)(C),” which provides: The term “drawback claimant” means the exporter of the exported article or the refiner, producer, or importer of either the qualified article or the exported article. Any person eligible to file a drawback claim under this subparagraph may designate another person to file such claim. Under 19 C.F.R. § 191.175(a), the “drawback claimant under 19 U.S.C. § 1313(p) must be the exporter of the exported article, or the refiner, producer, or importer of that article.” The regulations provide that any of these persons eligible to claim drawback may designate another person to file the drawback claim. Further, 19 C.F.R. § 191.82 provides that the exporter may waive the right to claim drawback and assign such right to the manufacturer, producer, importer or intermediate party. It is stated that the imported petroleum derivatives that DL will purchase from TI and enter into the U.S., will be “qualified articles” as defined in 19 C.F.R. § 191.172(a). 19 C.F.R. § 191.172(a) states: “Qualified article” means an article described in headings 2707, 2708, 2710 through 2715, 2901, 2902, 2909.19.14, or 3901 through 3914 of the Harmonized Tariff Schedule of the United States (HTSUS). In the case of an article described in headings 3901 through 3914, the definition covers the article in its primary forms as provided in Note 6 to chapter 39 of the HTSUS. Per § 1313(p)(3)(A), inter alia, The term “qualified article” means an article– (i) described in– (I) headings 2707, 2708, 2709.00, 2710, 2711, 2712, 2713, 2714, 2715, 2901, and 2902, and subheadings 2903.21.00, 2909.19.14, 2917.36, 2917.39.04, 2917.39.15, 2926.10.00, **3811.21.00**, and 3811.90.00 of the Harmonized Tariff Schedule of the United States, . . . . Nothing more is stated about the “qualified articles” that DL will purchase from TI import into the U.S. After DL has entered the qualified articles this merchandise will then be sold to Tomac. Tomac is an affiliate of TI. DL will sell the merchandise to Tomac “at a price that will cover DL’s costs for the goods and customs clearance related charges, plus 50 % of DL’s actual duty payments.” The reason for this pricing structure is stated to be that DL intends to claim drawback upon exportation of finished petroleum derivatives of the “same kind and quality” as those DL bought from TI. The payment of drawback per § 1313(p) to DL is also contingent on the exported article meeting the definition of “same kind and quality “as the qualified article contained in § 1313(p)(3)(B): An article, including an imported, manufactured, substituted, or exported article, is of the same kind and quality as the qualified article for which it is substituted under this subsection if it is a product that is commercially interchangeable with or referred to under the same eight-digit classification of the Harmonized Tariff Schedule of the United States as the qualified article. If an article is referred to under the same eight-digit classification of the Harmonized Tariff Schedule of the United States as the qualified article on January 1, 2000, then whether or not the article has been reclassified under another eight-digit classification after January 1, 2000, the article shall be deemed to be an article that is referred to under the same eight-digit classification of such Schedule as the qualified article for purposes of the preceding sentence. Nothing further is stated about the exported articles that will be the basis of DL’s claim for drawback. In addition, it is unknown who will export the “same kind and quality” finished petroleum derivatives. “For purposes of this ruling request, it is \[to be\] assumed that the exporter of the ‘exported article’ satisfies the requirements of 19 U.S.C. § 1313(p)(2). The requirements in § 1313(p)(2), compliance with which is a condition precedent to drawback under § 1313(p), are that the exporter must have: (1) manufactured a qualified article; or (2) purchased/exchanged the same from the manufacturer; or (3) imported a qualified article; or (4) purchased/exchanged a qualified article from the importer, all “in a quantity equal to or greater than the quantity of the exported article; and the exportation occurs within 180 days after the date of entry of an imported qualified article or during the manufacturing period or within 180 days after the close of such period. As in HRL [228946](https://www.customsmobile.com/rulings/docview?doc_id=228946&highlight=228946), the language of § 1313(p) is unambiguous. Section 1313(p)(1) sets out the requirements briefly; the exported article and the qualified article must be of the same kind and quality, the requirements in 1313(p)(2) must be met and a drawback claim must be filed. If these requirements are met, “drawback shall be allowed . . . .” Thus, though under the facts described, the business relationships and transactions are expressly set up for the purpose of maximizing the drawback available under § 1313(p), provided that the all the statutory requirements in 19 U.S.C. §1313(p), including the filing a drawback claim and the applicable regulations, 19 C.F.R. Part 191, Subpart Q, are satisfied, DL would not be precluded from obtaining drawback. ### HOLDING: DL Trading can claim drawback per 19 U.S.C. § 1313(p) under the circumstances described on the petroleum derivatives it purchases from TI provided that all the statutory requirements are met and the applicable regulations are satisfied. Sincerely, Myles B. Harmon, Director Commercial Rulings Division #### “United States Court of Appeals for the Federal Court” [ Learn More at Customs Rulings ](https://www.customsmobile.com/rulings/docview?doc_id=230305&highlight=3811.21.00%2A) --- ### [Third Party Drawback](https://alliancechb.com/duty-drawback/third-party-drawback/) **Published:** December 15, 2025 **Author:** Alliance Drawback Services **Content:** # Third partydrawback explained. Third party drawback allows import rights to be transferred, or export rights to be waived, when a commercial relationship exists but the importer and exporter of record are different entities. ## Here’s an Example of Third Party Drawback ## Incoterms matter in duty drawback for imported duty-paid merchandise and exports. #### “19 CFR Part 190 – Modernized Drawback”” ![](https://alliancechb.com/wp-content/uploads/2025/12/thirdparty_importer.png) ### Domestic Vendor #### Provision: All A company in the United States import duty-paid merchandise and then sells it domestically to a customer. The customer then exports the merchandise. With the customer’s participation, export rights can be waived to the supplier and matched against duty-paid imports. ![](https://alliancechb.com/wp-content/uploads/2025/12/thirdparty_exporter.png) ### Domestic Customer #### Provision: All A company in the United States purchases domestic merchandise from a supplier who has previously imported duty-paid. With the supplier’s participation, import rights can be transferred to the customer and matched against their qualifying exports. ## Third Party Drawback Explained ## Watch and learn more about Third Party Drawback. https://youtu.be/mkogoOMopss ## The Regulatory Language of Third Party Drawback ### § 190.10 Transfer of merchandise. **(a) Ability to transfer merchandise.** (1) A party may transfer drawback eligible merchandise or articles to another party, provided that the transferring party: (i) Imports and pays duties, taxes, and/or fees on such imported merchandise; (ii) Receives such imported merchandise; (iii) In the case of 19 U.S.C. 1313(j)(2), receives such imported merchandise, substituted merchandise, or any combination of such imported and substituted merchandise; or (iv) Receives an article manufactured or produced under 19 U.S.C. 1313(a) and/or (b). (2) The transferring party must maintain records that: (i) Document the transfer of that merchandise or article; (ii) Identify such merchandise or article as being that to which a potential right to drawback exists; and (iii) Assign such right to the transferee (see § 190.82). **(b) Required records.** The records that support the transfer must include the following information: (1) The party to whom the merchandise or articles are delivered; (2) Date of physical delivery; (3) Import entry number and entry line item number; (4) Quantity delivered and, for substitution claims, total quantity attributable to the relevant import entry line item number; (5) Total duties, taxes, and fees paid on, or attributable to, the delivered merchandise, and, for substitution claims, total duties, taxes, and fees paid on, or attributable to, the relevant import entry line item number; (6) Date of importation; (7) Port where import entry filed; (8) Person from whom received; (9) Description of the merchandise delivered; (10) The 10-digit HTSUS classification for the designated imported merchandise (such HTSUS number must be from the entry summary line item and other entry documentation for the merchandise); and (11) If the merchandise transferred is substituted for the designated imported merchandise under 19 U.S.C. 1313(j)(2), the 10-digit HTSUS classification of the substituted merchandise (as if it had been imported). **(c) Line item designation for partial transfers of merchandise.** Regardless of any agreement between the transferor and the transferee, the method used for the first filed claim relating to merchandise reported on that entry summary line item will be the exclusive basis for the calculation of refunds (either using per unit averaging or not) for any subsequent claims for any other merchandise reported on that same entry summary line item. See § 190.51(a)(3). **(d) Retention period.** The records listed in paragraph (b) of this section must be retained by the issuing party for 3 years from the date of liquidation of the related claim or longer period if required by law (see 19 U.S.C. 1508(c)(3)). **(e) Submission to CBP.** If the records required under paragraph (b) of this section or additional records requested by CBP are not provided by the claimant upon request by CBP, the part of the drawback claim dependent on those records will be denied. **(f) Warehouse transfer and withdrawals.** The person in whose name merchandise is withdrawn from a bonded warehouse will be considered the importer for drawback purposes. No records are required to document prior transfers of merchandise while in a bonded warehouse. #### “19 CFR Part 190 – Modernized Drawback” [ Learn More at Cornell Law ](https://www.ecfr.gov/current/title-19/chapter-I/part-190) --- ### [MPF & HMF Drawback](https://alliancechb.com/duty-drawback/mpf-hmf-drawback-refunds/) **Published:** December 10, 2025 **Author:** Alliance Drawback Services **Content:** # MPF & HMFdrawback explained. Imported duty-paid merchandise subject to merchandise processing fees (MPF) and harbor maintenance fees (HMF) are eligible for duty drawback. #### “19 CFR Part 190 – Modernized Drawback”” ### Merchandise Processing Fee (MPF) Explained The MPF for formal entries is an ad valorem fee of 0.3464 percent. The maximum amount of the fee shall not exceed $538.40 and shall not be less than $27.75. The fee is based on the value of the merchandise being imported, not including duty, freight, and insurance charges. MPF for informal entries (i.e. goods imported via mail etc.) is a set fee and ranges from $2.22, 6.66 or $9.99 per shipment. The merchandise processing fee or MPF is [**duty drawback** ](https://alliancechb.com/duty-drawback/ "Duty Drawback")eligible. ### Harbor Maintenance Fee (HMF) Explained If the mode of transportation is via ship a Harbor Maintenance Fee (HMF) is collected by Customs and Border Protection. HMF is .125 percent of the value of the commercial cargo shipped through identified ports. HMF is not collected on cargo imported or transported via air or mailed. However, goods that are shipped are subject to both MPF and HMF. The harbor maintenance fee or HMF is [**duty drawback**](https://alliancechb.com/duty-drawback/ "Duty Drawback") eligible. ## MPF & HMF Drawback Explained ## Watch and learn more about MPF & HMF Drawback. https://youtu.be/mkogoOMopss ## The Regulatory Language of MPF & HMF Fees ### 19 CFR § 24.23 **§ 24.23 Fees for processing merchandise.** This section sets forth the terms and conditions for when the fees for processing merchandise are required. The specific merchandise processing fee amounts and corresponding limitations that appear in this section are not the actual fees or limitations, but represent the base year amounts that are subject to adjustment each fiscal year in accordance with the Fixing America’s Surface Transportation Act (FAST Act) using Fiscal Year 2014 as the base year for comparison. (See appendix B to part 24 for a table setting forth the fees and limitations subject to adjustment along with the corresponding statutory authority, the regulatory citation, the name of the fee or limitation, and the Fiscal Year 2014 base amount which reflects the statutory amounts that were adjusted by the American Jobs Creation Act of 2004 (Pub. L. 108-357).) The methodology for adjusting the fees and limitations to reflect the percentage, if any, of the increase in the average of the Consumer Price Index – All Urban Consumers, U.S. All items, 1982-84 (CPI-U) for the preceding 12-month period (June through May) compared to the Consumer Price Index for fiscal year 2014 is set forth in § 24.22(k) of this part. CBP will determine annually whether an adjustment to the fees and limitations is necessary and a notice specifying the amount of the fees and limitations will be published in the Federal Register annually for each fiscal year at least 60 days prior to the effective date of the new fees and limitations. The fees and the limitations will also be maintained for the public’s convenience on the CBP Web site at www.cbp.gov. (a) Definitions. The following definitions apply for the purposes of this section: (1) Centralized hub facility. A centralized hub facility is a separate, unique, single purpose facility normally operating outside of CBP operating hours approved by the port director for entry filing, examination, and release of express consignment shipments, as provided for in part 128 of this chapter on July 30, 1990. (2) Entered or released. Merchandise is entered or released if the merchandise is: (i) Released under a special permit for immediate delivery under 19 U.S.C. 1448(b); (ii) Entered or released from CBP custody under 19 U.S.C. 1484(a)(1)(A); or (iii) Withdrawn from warehouse for consumption. (3) Express consignment carrier facility. An express consignment carrier facility is a separate or shared specialized facility approved by the port director solely for the examination and release of express consignment shipments, as provided for in part 128 of this chapter on July 30, 1990. (4) Manual entry or release. Any reference to a manual formal or informal entry or release must not include: (i) Any formal or informal entry or release filed by an importer or broker who is operational for cargo release through the Automated Broker Interface (ABI) of the CBP Automated Commercial System (ACS) or any other CBP-authorized electronic data interchange system at any port within the United States; (ii) Any formal or informal entry or release filed at a port where cargo selectivity is not fully implemented if filed by an importer or broker who is operational for ABI entry summary; or (iii) Any informal entry or any Line Release filed at a part where cargo selectivity is fully implemented if filed by an importer or broker who is operational for ABI entry summary. (5) Small airport or other facility. A small airport or other facility is any airport or other facility which has been designated as a user fee facility under 19 U.S.C. 58b and at which more than 25,000 informal entries were processed during the preceding fiscal year. (6) Inbound Express Mail service or Inbound EMS. Inbound Express Mail service or Inbound EMS means the service described in the mail classification schedule referred to in section 3631 of title 39, United States Code and 39 CFR 3040.104. (b) Fees – (1) Formal entry or release – (i) Ad valorem fee – (A) General. Except as provided in paragraph (c) of this section, merchandise that is formally entered or released is subject to the payment to CBP of an ad valorem fee of 0.3464 percent. The 0.3464 ad valorem fee is due and payable to CBP by the importer of record of the merchandise at the time of presentation of the entry summary and is based on the value of the merchandise as determined under 19 U.S.C. 1401a. In the case of an express consignment carrier facility or centralized hub facility, each shipment covered by an individual air waybill or bill of lading that is formally entered and valued at $2,500 or less is subject to a $1.00 per individual air waybill or bill of lading fee, as adjusted in accordance with the terms of § 24.22(k) of this part, and, if applicable, to the 0.3464 percent ad valorem fee in accordance with paragraph (b)(4) of this section. (B) Maximum and minimum fees. Subject to the provisions of paragraphs (b)(1)(ii) and (d) of this section relating to the surcharge and to aggregation of the ad valorem fee respectively, the ad valorem fee charged under paragraph (b)(1)(i)(A) of this section must not exceed $538.40, as adjusted in accordance with the terms of § 24.22(k) of this part, and must not be less than $27.75, as adjusted in accordance with the terms of § 24.22(k) of this part. (ii) Surcharge for manual entry or release. In the case of any formal manual entry or release of merchandise, a surcharge of $3, as adjusted in accordance with the terms of § 24.22(k) of this part, will be assessed and will be in addition to any ad valorem fee charged under paragraphs (b)(1)(i)(A) and (B) of this section. (2) Informal entry or release. Except in the case of merchandise covered by paragraph (b)(3) or paragraph (b)(4) of this section, and except as otherwise provided in paragraph (c) of this section, merchandise that is informally entered or released is subject to the payment to CBP of a fee of: (i) $2.22, as adjusted in accordance with the terms of § 24.22(k) of this part, if the entry or release is automated and not prepared by CBP personnel; (ii) $6.66, as adjusted in accordance with the terms of § 24.22(k) of this part, if the entry or release is manual and not prepared by CBP personnel; or (iii) $9.99, as adjusted in accordance with the terms of § 24.22(k) of this part, if the entry or release, whether automated or manual, is prepared by CBP personnel. (3) Small airport or other facility. With respect to the processing of letters, documents, records, shipments, merchandise, or any other item that is valued at $2,500 or less, or any higher amount prescribed for purposes of informal entry in § 143.21 of this chapter, a small airport or other facility must pay to CBP an amount equal to the reimbursement (including overtime) which the facility is required to make during the fiscal year under § 24.17. (4) Express consignment carrier and centralized hub facilities – (i) General. Each carrier or operator using an express consignment carrier facility or a centralized hub facility must pay to CBP a fee in the amount of $1.00, as adjusted in accordance with the terms of paragraph (k) of § 24.22 of this chapter, per individual air waybill or individual bill of lading for the processing of airway bills for shipments arriving in the United States. In addition, if merchandise is formally entered and valued at $2,500 or less, the importer of record must pay to CBP the ad valorem fee specified in paragraph (b)(1) of this section, if applicable. An individual air waybill or individual bill of lading is the individual document issued by the carrier or operator for transporting and/or tracking an individual item, letter, package, envelope, record, document, or shipment. An individual air waybill is not a consolidation of several air waybills, and is not a master bill or other consolidated document. An individual air waybill or bill of lading is a bill representing an individual shipment that has its own unique bill number and tracking number, where the shipment is assigned to a single ultimate consignee, and no lower bill unit exists. Payment must be made to CBP on a quarterly basis and must cover the individual fees for all subject transactions that occurred during a calendar quarter. (ii) Maximum and minimum fees. Subject to the provisions of paragraph (b)(1)(i)(A) and (b)(4) of this section relating to the express consignment carrier facility or centralized hub facility fee, the fee per individual air waybill or bill of lading charged under paragraph (b)(1)(i)(A) of this section must not exceed $1, as adjusted in accordance with the terms of § 24.22(k) of this part, and must not be less than $0.35, as adjusted by § 24.22(k) of this part. (iii) Quarterly payments. The following additional requirements and conditions apply to each quarterly payment made under this section: (A) The quarterly payment must conform to the requirements of § 24.1 of this part, must be submitted electronically via Fedwire or pay.gov, or mailed to Customs and Border Protection, Revenue Division/Attention: Reimbursables, 6650 Telecom Drive, Suite 100, Indianapolis, Indiana 46278, and must be received by CBP no later than the last day of the month that follows the close of the calendar quarter to which the payment relates. (B) The following information must be included with the quarterly payment: (1) The identity of the calendar quarter to which the payment relates; (2) The identity of the facility for which the payment is made and the port code that applies to that location and, if the payment covers multiple facilities, the identity of each facility and its port code and the portion of the payment that pertains to each port code; and (3) The total number of individual air waybills and individual bills of lading covered by the payment, and a breakdown of that total for each facility covered by the payment according to the number covered by formal entry procedures, the number covered by informal entry procedures specified in §§ 128.24(e) and 143.23(j) of this chapter, and the number covered by other informal entry procedures. (C) Overpayments or underpayments may be accounted for by an explanation in, and adjustment of, the next due quarterly payment to CBP. In the case of an overpayment or underpayment that is not accounted for by an adjustment of the next due quarterly payment to CBP, the following procedures apply: (1) In the case of an overpayment, the carrier or operator may request a refund by writing to Customs and Border Protection, Revenue Division/Attention: Reimbursables, 6650 Telecom Drive, Suite 100, Indianapolis, Indiana 46278. The refund request must specify the grounds for the refund and must be received by CBP within one year of the date the fee for which the refund is sought was paid to CBP; and (2) In the case of an underpayment, interest will accrue on the amount not paid from the date payment was initially due to the date that payment to CBP is made. (D) The underpayment or failure of a carrier or operator using an express consignment carrier facility or a centralized hub facility to pay all applicable fees owed to CBP pursuant to paragraph (b)(4) of this section may result in the assessment of penalties under 19 U.S.C. 1592, liquidated damages, and any other action authorized by law. (c) Exemptions and limitations. (1) The ad valorem fee, surcharge, and specific fees provided for under paragraphs (b)(1) and (b)(2) of this section will not apply to: (i) Except as provided in paragraph (c)(2) of this section, articles provided for in chapter 98, Harmonized Tariff Schedule of the United States (HTSUS; 19 U.S.C. 1202); (ii) Products of insular possessions of the U.S. (General Note 3(a)(iv), HTSUS); (iii) Products of beneficiary countries under the Caribbean Basin Economic Recovery Act (General Note 7, HTSUS); (iv) Products of least-developed beneficiary developing countries (General Note 4(b)(i), HTSUS); and (v) Merchandise described in General Note 19, HTSUS, merchandise released under 19 U.S.C. 1321, and merchandise imported by mail, other than Inbound EMS items that are formally entered on or after September 3, 2020. (2) In the case of any article provided for in subheading 9802.00.60 or 9802.00.80, HTSUS: (i) The surcharge and specific fees provided for under paragraphs (b)(1)(ii) and (b)(2) of this section will remain applicable; and (ii) The ad valorem fee provided for under paragraph (b)(1)(i) of this section will be assessed only on that portion of the cost or value of the article upon which duty is assessed under subheadings 9802.00.60 and 9802.00.80. (3) The ad valorem, surcharge, and specific fees provided for under paragraphs (b)(1) and (b)(2) of this section will not apply to goods originating in Canada or Mexico within the meaning of General Note 12, HTSUS (see also 19 U.S.C. 3332), where such goods qualify to be marked, respectively, as goods of Canada or Mexico pursuant to Annex 311 of the North American Free Trade Agreement and without regard to whether the goods are marked. For qualifying goods originating in Mexico, the exemption applies to goods entered or released (as defined in this section) after June 29, 1999. Where originating goods as described above are entered or released with other goods that are not originating goods, the ad valorem, surcharge, and specific fees will apply only to those goods which are not originating goods. (4) In the case of agricultural products of the U.S. that are processed and packed in a foreign trade zone, the ad valorem fee provided for under paragraph (b)(1)(i) of this section will be applied only to the value of any material used to make the container for such merchandise, but only if that merchandise is subject to entry and the container is of a kind normally used for packing such merchandise. (5) The ad valorem fee, surcharge, and specific fees provided for under paragraphs (b)(1) and (b)(2) of this section will not apply to products of Israel that are entered, or withdrawn from warehouse for consumption, on or after September 16, 1998 (the effective date of a determination published in the Federal Register on September 1, 1998, under section 112 of the Customs and Trade Act of 1990). (6) The ad valorem fee, surcharge, and specific fees provided under paragraphs (b)(1) and (b)(2)(i) of this section will not apply to goods that qualify as originating goods under § 202 of the United States-Singapore Free Trade Agreement Implementation Act (see also General Note 25, HTSUS) that are entered, or withdrawn from warehouse for consumption, on or after January 1, 2004. (7) The ad valorem fee, surcharge, and specific fees provided under paragraphs (b)(1) and (b)(2)(i) of this section will not apply to goods that qualify as originating goods under § 202 of the United States-Chile Free Trade Agreement Implementation Act (see also General Note 26, HTSUS) that are entered, or withdrawn from warehouse for consumption, on or after January 1, 2004. (8) The ad valorem fee, surcharge, and specific fees provided under paragraphs (b)(1) and (b)(2)(i) of this section will not apply to goods that qualify as originating goods under § 203 of the United States-Australia Free Trade Agreement Implementation Act (see also General Note 28, HTSUS) that are entered, or withdrawn from warehouse for consumption, on or after January 1, 2005. (9) The ad valorem fee, surcharge, and specific fees provided under paragraphs (b)(1) and (b)(2)(i) of this section will not apply to goods that qualify as originating goods under § 202 of the United States-Bahrain Free Trade Agreement Implementation Act (see also General Note 30, HTSUS) that are entered, or withdrawn from warehouse for consumption, on or after August 1, 2006. (10) The ad valorem fee, surcharge, and specific fees provided under paragraphs (b)(1) and (b)(2)(i) of this section will not apply to goods that qualify as originating goods under section 203 of the Dominican Republic-Central America-United States Free Trade Agreement Implementation Act (see also General Note 29, HTSUS) that are entered, or withdrawn from warehouse for consumption, on or after March 1, 2006. (11) The ad valorem fee, surcharge, and specific fees provided under paragraphs (b)(1) and (b)(2)(i) of this section will not apply to goods that qualify as originating goods under § 202 of the United States – Oman Free Trade Agreement Implementation Act (see also General Note 31, HTSUS) that are entered, or withdrawn from warehouse for consumption, on or after January 1, 2009. (12) The ad valorem fee, surcharge, and specific fees provided under paragraphs (b)(1) and (b)(2)(i) of this section will not apply to goods that qualify as originating goods under § 203 of the United States-Peru Trade Promotion Agreement Implementation Act (see also General Note 32, HTSUS) that are entered, or withdrawn from warehouse for consumption, on or after February 1, 2009. (13) The ad valorem fee, surcharge, and specific fees provided under paragraphs (b)(1) and (b)(2)(i) of this section will not apply to goods that qualify as originating goods under § 203 of the United States-Korea Free Trade Agreement (see also General Note 33, HTSUS) that are entered, or withdrawn from warehouse for consumption, on or after March 15, 2012. (14) The ad valorem fee, surcharge, and specific fees provided under paragraphs (b)(1) and (b)(2)(i) of this section will not apply to goods that qualify as originating goods under section 203 of the United States-Colombia Trade Promotion Agreement Implementation Act (see also General Note 34, HTSUS that are entered, or withdrawn from warehouse for consumption, on or after May 15, 2012. (15) The ad valorem fee, surcharge, and specific fees provided under paragraphs (b)(1) and (b)(2)(i) of this section will not apply to goods that qualify as originating goods under section 203 of the United States-Panama Trade Promotion Agreement Implementation Act (see also General Note 35, HTSUS) that are entered, or withdrawn from warehouse for consumption, on or after October 29, 2012. (d) Aggregation of ad valorem fee. (1) Notwithstanding any other provision of this section, in the case of entries of merchandise made under any temporary monthly entry program established by CBP before July 1, 1989, for the purpose of testing entry processing improvements, the ad valorem fee charged under paragraph (b)(1)(i) of this section for each day’s importations at an individual port will be the lesser of the following, provided that those importations involve the same importer and exporter: (i) $400; or (ii) The amount determined by applying the ad valorem rate under paragraph (b)(1)(i)(A) of this section to the total value of such daily importations. (2) The fees as determined under paragraph (d)(1) of this section must be paid to CBP at the time of presentation of the monthly entry summary. Interest will accrue on the fees paid monthly in accordance with section 6621 of the Internal Revenue Code of 1986. (e) Treatment of fees as customs duty – (1) Administration and enforcement. Unless otherwise specifically provided in this chapter, all administrative and enforcement provisions under the customs laws and regulations, other than those laws and regulations relating to drawback, will apply with respect to any fee provided for under this section, and with respect to any person liable for the payment of such fee, as if such fee is a customs duty. For purposes of this paragraph, any penalty assessable in relation to an amount of customs duty, whether or not any such duty is in fact due and payable, will be assessed in the same manner with respect to any fee required to be paid under this section. (2) Jurisdiction. For purposes of determining the jurisdiction of any court or agency of the United States, any fee provided for under this section will be treated as if such fee is a customs duty. ### 19 CFR § 24.24 **§ 24.24 Harbor maintenance fee.** (a) Fee. Commercial cargo loaded on or unloaded from a commercial vessel is subject to a port use fee of 0.125 percent (.00125) of its value if the loading or unloading occurs at a port within the definition of this section, unless exempt under paragraph (c) of this section or one of the special rules in paragraph (d) of this section is applicable. (b) Definitions. For the purpose of this section: (1) Port means any channel or harbor (or component thereof) in the customs territory of the United States which is not an inland waterway and is open to public navigation and at which Federal funds have been used since 1977 for construction, maintenance or operation. It does not include channels or harbors deauthorized by Federal law before 1985. A complete list of the ports subject to the harbor maintenance fee is set forth [here](https://www.ecfr.gov/current/title-19/chapter-I/part-24 "ECFR Title 19 Chapter 1 Part 24"): (2) Commercial cargo means, unless exempted by paragraphs (c) (1) and (2) of this section, merchandise transported on a commercial vessel and passengers transported for compensation or hire. Whenever the term “cargo” is used, it means merchandise, but not passengers. (3) Commercial vessel means, unless exempted by paragraph (c)(3) of this section, any vessel used in transporting commercial cargo by water for compensation or hire, or in transporting commercial cargo by water in the business of the owner, lessee or operator of the vessel. (4) Ferry means any vessel which arrives in the U.S. on a regular schedule during its operating season at intervals of at least once each business day. (5) Humanitarian assistance is considered to be assistance which is required for the survival of the affected population in cases of, or in preparation for, emergencies of all kinds. Such relief assistance would include, but is not limited to: food items, shelter, clothing, basic home utensil kits, and small electric generators. (6) Development assistance is considered to be assistance similar to that provided for pursuant to chapter 1 of part 1 of the 1961 Foreign Assistance Act, as amended, 22 U.S.C. 2151-1(b). Such development assistance would include, but is not limited to, aid to promote: Agricultural productivity, reduction of infant mortality, reduction of rates of unemployment and underemployment, and an increase in literacy. (7) Non-profit means an organization or cooperative exempt from income taxation pursuant to 26 U.S.C. 501(c)(3). (c) Exemptions. The following are not subject to the fee: (1) Bunker fuel, ship’s stores, sea stores and vessel equipment. (2) Fish or other aquatic animal life, caught and not previously landed on shore. (3) Ferries engaged primarily in the transport of passengers and their vehicles between points within the U.S. or between the U.S. and contiguous countries. (4) Certain loadings and unloadings of cargo in Alaska, Hawaii, or the possessions of the U.S. as defined in this paragraph. (i) Descriptions of exempt loadings/unloadings: (A) Cargo loaded on a vessel in a port in the U.S. mainland for transportation to Alaska, Hawaii, or any possession of the U.S. for ultimate use or consumption in Alaska, Hawaii, or any possession of the U.S. (B) Cargo loaded on a vessel in Alaska, Hawaii, or any possession of the U.S. for transportation to the U.S. mainland for ultimate use or consumption in the U.S. mainland. (C) Cargo described in paragraph (c)(4)(i)(A) of this section unloaded in Alaska, Hawaii, or any possession of the U.S. (D) Cargo described in paragraph (c)(4)(i)(B) of this section unloaded in the U.S. mainland. (E) Cargo loaded on a vessel in Alaska, Hawaii, or a possession of the U.S. and unloaded in the state or possession in which loaded. (ii) For purposes of paragraph (c)(4) of this section: (A) Cargo does not include crude oil with respect to Alaska. (B) U.S. mainland means the continental U.S. excluding Alaska. (C) Possessions of the U.S. means Puerto Rico, Guam, American Samoa, U.S. Virgin Islands, the Northern Mariana Islands and the Pacific Trust Territories. (5) Commercial vessels, if any fuel used to move the cargo is subject to the Inland Waterway Fuel Tax (See section 4042, Internal Revenue Code of 1954, as amended by Pub. L. 95-502 and Pub. L. 99-662). (6) Cargo entering the U.S. in bond for transportation and direct exportation to a foreign country, unless, with respect to cargo exported to Canada or Mexico; (i) The Secretary of the Treasury determines that Canada or Mexico has imposed a substantially equivalent port use fee on commercial vessels or commercial cargo using ports of their countries; or (ii) A study made pursuant to the Water Resources Development Act of 1986 (Pub. L. 99-662) finds that the fee is not likely to cause significant economic loss to a U.S. port or diversion of a significant amount of cargo to a port in a contiguous country. (7) Cargo or vessels of the U.S. or any agency or instrumentality of the U.S. (8) Cargo owned or financed by nonprofit organizations or cooperatives which is certified by the CBP as intended for use in humanitarian or development assistance overseas, including contiguous countries. (i) The donated cargo is required to be certified as intended for use in humanitarian or development assistance overseas by CBP. Subsequent to payment of the fee, a refund request may be made by electronically submitting to CBP the Harbor Maintenance Fee Amended Quarterly Summary Report (CBP Form 350), as well as the Harbor Maintenance Fee Quarterly Summary Report (CBP Form 349) for the quarter covering the payment to which the refund request relates, using the Automated Clearinghouse (ACH) via an Internet account established by the payer and located at http://www.pay.gov. In the alternative, the requisite forms may be mailed to the Office of Administration, Revenue Division, Customs and Border Protection, using the current address posted at Forms.CBP.gov. Upon request by CBP, the party requesting the refund must also submit to CBP, via mail, any supporting documentation deemed necessary by CBP to certify that the entity donating the cargo is a nonprofit organization or cooperative and that the cargo was intended for humanitarian or development assistance overseas (including contiguous countries). A description of the cargo listed in the shipping documents and a brief summary of the intended use of the goods, if such use in not reflected in the documents, are acceptable evidence for certification purposes. Approved HMF refund payments will be made via ACH to those payers who are enrolled in the ACH refund program; all others will receive HMF refund payments via mail. (ii) Each nonprofit organization or cooperative claiming the exemption under this subpart must maintain documentation pertaining to the exemption for a period of 5 years. The documentation must be made available for inspection by CBP in accordance with the provisions of §§ 162.1a through 162.1i of this chapter. (d) Special rules – (1) Intraport. The fee is not to be assessed on the mere movement of commercial cargo within a port. (2) Same vessel, same cargo. If a fee is assessed when cargo is loaded on a vessel, the unloading of the same cargo from that vessel is not subject to the fee. If a fee is assessed when cargo is unloaded from a vessel, the reloading of the same cargo on that vessel is not subject to the fee. (3) De minimis for individual shipments. The fee will not be assessed on loadings or unloadings of cargo in which: (i) For imported cargo: The shipment would be entitled to be entered under informal entry procedures as provided for in § 143.21 of this chapter. (ii) For domestic cargo: The value of the shipment does not exceed $1,000. (4) De minimis for quarterly payments. Quarterly payment is not required if the total value of all shipments for which a fee was assessed for the quarter does not exceed $10,000. (e) Collections, supplemental payments, and refunds – (1) Domestic vessel movements – (i) Time and place of liability. Subject to the exemptions and special rules of this section, when cargo is loaded on a commercial vessel at a port within the definition of this section to be transported between ports in the U.S. or is unloaded from a commercial vessel at a port within the definition of this section after having been transported between ports in the U.S., the shipper (the person or corporation who pays the freight) of that cargo is liable for the payment of the port use fee at the time of unloading. The fee will be imposed only once on a movement pursuant to paragraph (d)(2) of this section. The fee is to be based upon the value of the cargo as determined by standard commercial documentation where such documentation is available. Otherwise, the value is to be determined under 19 U.S.C. 1401a as if it were imported merchandise. The Vessel Operation Report (Army Corps of Engineers Form 3925) is to be completed and submitted to the Army Corps of Engineers in accordance with the procedures set forth in 33 CFR Ch. II, part 207. The shipper’s name, either the internal revenue service or social security number of the shipper and the tax exemption code (as it appears in the Vessel Operation Report instructions) claimed for the shipment are to be included on the Vessel Operation Report. (ii) Fee payment. The shipper whose name appears on the Vessel Operation Report must pay all accumulated fees for which he is liable on a quarterly basis in accordance with paragraph (f) of this section by submitting to CBP a Harbor Maintenance Fee Quarterly Summary Report, CBP Form 349. The CBP Form 349 must either be submitted electronically to CBP using the Automated Clearinghouse (ACH) via an Internet account established by the payer and located at http://www.pay.gov or, alternatively, mailed with a single check or money order payable to U.S. Customs and Border Protection to the Office of Administration, Revenue Division, Customs and Border Protection, using the current address posted at Forms.CBP.gov. (2) Import vessel movements – (i) Time and place of liability. Subject to the exemptions and special rules of this section, when imported cargo is unloaded from a commercial vessel at a port within the definition of this section, and destined for either consumption, warehousing, or foreign trade zone admission, the importer of that cargo, or in the case of foreign trade zones, the person or corporation responsible for bringing merchandise into the zone, is liable for the payment of the port use fee at the time of unloading. The fee is based on the CBP appraised value of the shipment pursuant to 19 U.S.C. 1401a, the same basis as that used for duty payment. The fee will be collected on all formal entries, including warehouse entries and temporary importation under bond entries, and admissions into foreign trade zones. (ii) Fee payment. The port use fee on unloading of imported cargo must be paid in accordance with the normal CBP collection procedures set forth in §§ 24.1 and 141.1 of this chapter, except as provided for merchandise admitted into foreign trade zones in paragraph (e)(2)(iii) of this section. The CBP Entry Summary Form (CBP Form 7501, or its electronic equivalent), is to be completed with the amount of the fee shown and identified on the form. The fee must be paid by the importer by adding it to any normal duty, tax or fee payable at the time of formal entry processing. If no other duty, tax, or fee is imposed on the shipment, and the fee exceeds $3, a check or money order for the amount of the fee must be attached to the CBP entry forms submitted. (iii) Foreign Trade Zones. In cases where imported cargo is unloaded from a commercial vessel at a port within the definition of this section and admitted into a foreign trade zone, the applicant for admission (the person or corporation responsible for bringing merchandise into the zone) who becomes liable for the fee at the time of unloading pursuant to paragraph (e)(3)(i) of this section, must pay all fees for which he is liable on a quarterly basis in accordance with paragraph (f) of this section by submitting to CBP a Harbor Maintenance Fee Quarterly Summary Report, CBP Form 349. The CBP Form 349 must either be submitted electronically to CBP using the Automated Clearinghouse (ACH) via an Internet account established by the payer and located at http://www.pay.gov or, alternatively, mailed with a single check or money order payable to U.S. Customs and Border Protection to the Office of Administration, Revenue Division, Customs and Border Protection, using the current address posted at Forms.CBP.gov. Fees must be paid for all shipments unloaded and admitted to the zone, or in the case of direct deliveries under §§ 146.39 and 146.40 of this chapter, unloaded and received in the zone under the bond of the foreign trade zone operator. (3) Passengers – (i) Time and place of liability. Subject to the exemptions and special rules of this section, when a passenger boards or disembarks a commercial vessel at a port within the definition of this section, the operator of that vessel is liable for the payment of the port use fee. The fee is to be based upon the value of the actual charge for transportation paid by the passenger or on the prevailing charge for comparable service if no actual charge is paid. The vessel operator on each cruise is liable only once for the port use fee for each passenger. (ii) Fee payment. The operator of the passenger-carrying vessel must pay the accumulated fees for which he is liable on a quarterly basis in accordance with paragraph (f) of this section by submitting to CBP a Harbor Maintenance Fee Quarterly Summary Report, CBP Form 349. The CBP Form 349 must either be submitted electronically to CBP using the Automated Clearinghouse (ACH) via an Internet account established by the payer and located at http://www.pay.gov or, alternatively, mailed with a single check or money order payable to U.S. Customs and Border Protection to the Office of Administration, Revenue Division, Customs and Border Protection, using the current address posted at Forms.CBP.gov. (4) Refunds and supplemental payments – (i) General. To make supplemental payments or seek refunds of harbor maintenance fees paid relative to the unloading of imported cargo, the procedures applicable to supplemental payments or refunds of ordinary duties must be followed. To seek refunds of quarterly-paid harbor maintenance fees pertaining to export movements, the procedures set forth in paragraph (e)(4)(iv) of this section must be followed. To make supplemental payments on any quarterly-paid harbor maintenance fee or [seek refunds](https://alliancechb.com/duty-drawback/duty-drawback-assessment/ "Duty Drawback Assessment") of quarterly-paid harbor maintenance fees pertaining to other than export movements, the procedures set forth in paragraph (e)(4)(iii) must be followed. (ii) Time limit for refund requests. A refund request must be received by CBP within one year of the date the fee for which the refund is sought was paid to CBP or, in the case of fees paid relative to imported merchandise admitted into a foreign trade zone and subsequently withdrawn from the zone under 19 U.S.C. 1309, within one year of the date of withdrawal from the zone. (iii) For fees paid on other than export movements. If a supplemental payment is made for any quarterly-paid harbor maintenance fee or a refund is requested relative to quarterly fee payments previously made regarding the loading or unloading of domestic cargo, the unloading of cargo destined for admission into a foreign trade zone, or the boarding or disembarking of passengers, the refund request or supplemental payment must be accompanied by a Harbor Maintenance Fee Amended Quarterly Summary Report, CBP Form 350, along with a copy of the Harbor Maintenance Fee Quarterly Summary Report, CBP Form 349, for the quarter(s) covering the payment to which the refund request or supplemental payment relates. A request for a refund must specify the grounds for the refund. Supplemental payments and HMF refund requests, accompanied by the requisite CBP Forms 350 and 349 and, if applicable, supporting documentation, must be submitted electronically to CBP using the Automated Clearinghouse (ACH) via an Internet account established by the payer and located at http://www.pay.gov or, alternatively, mailed to the Office of Administration, Revenue Division, Customs and Border Protection, using the current address posted at Forms.CBP.gov. If a supplemental payment is mailed, a single check or money order payable to U.S. Customs and Border Protection must be attached to each CBP Form 350. Approved HMF refund payments will be made via ACH to those payers who are enrolled in the ACH refund program; all others will receive HMF refund payments via mail. (iv) For fees paid on export movements. CBP will process refund requests relative to fee payments previously made regarding the loading of cargo for export as follows: (A) Refund request. For export fee payments made prior to July 1, 1990, the exporter (the name that appears on the SED or equivalent documentation authorized under 15 CFR 30.39(b)) or its agent must submit a letter of request for a refund specifying the grounds for the refund and identifying the specific payments made. The letter must be accompanied by the proof of payment set forth in paragraph (e)(4)(iv)(C) of this section. For export fee payments made on or after July 1, 1990, supporting documentation is not required with the refund request. For these payments, the request must specify the grounds for the refund, identify the quarters for which a refund is sought, and contain the following additional information: the exporter’s name, address, and employer identification number (EIN); the name and EIN of any freight forwarder or other agent that made export fee payments on the exporter’s behalf; and a name, telephone number, and facsimile number of a contact person. Refund requests must either be submitted electronically to CBP using the Automated Clearinghouse (ACH) via an Internet account established by the payer and located at http://www.pay.gov or, alternatively, mailed to the Office of Administration, Revenue Division, Customs and Border Protection, using the current address posted at Forms.CBP.gov. Approved HMF refund payments will be made using the ACH to those payers who are enrolled in the ACH refund program; all others will receive HMF refund payments via mail. (B) Refund procedure – (1) Processing order; power of attorney. Generally, a properly filed refund request will be processed in the chronological order of its receipt. A refund request filed on behalf of an exporter by an agent other than a freight forwarder must be supported by a power of attorney or letter signed by the exporter authorizing the representation. A refund request filed by an agent other than a freight forwarder that lacks a power of attorney or authorization letter will not be processed unless one or the other is submitted. A refund request filed by a freight forwarder does not require a power of attorney or authorization letter to be processed; however, if CBP has not received a power of attorney or authorization letter for an exporter covered in a freight forwarder’s refund request and that exporter has filed a separate refund request on its own behalf, that freight forwarder’s entire refund request will be removed from the chronological processing order and processed after the processing of all exporter refund requests is completed. (2) HMT Payment Report and Report/Certification. In processing a request for a refund, CBP will conduct a search of its records (CBP electronic database and paper document sources) and produce for issuance to the exporter (or its agent, as appropriate) a “Harbor Mantenance Tax Payment Report” (HMT Payment Report) that lists all payments reflected in those records for the entire period the fee was in effect. CBP will also produce for issuance to the exporter a “Harbor Maintenance Tax Refund Report and Certification” (Report/Certification) that lists all payments supported by paper documentation, either retained by CBP (relative to payments made on and after July 1, 1990) or submitted by the exporter with its refund request (relative to payments made at any time the fee was in effect). Where a refund request was filed on the exporter’s behalf by an agent other than a freight forwarder, a power of attorney or authorization letter must be filed with CBP before CBP will issue these reports. The Report/Certification sets forth the total amount of the refund that CBP believes it owes the exporter for the payments listed in that report (minus any previous refunds). Pre-July 1, 1990, payments listed in the HMT Payment Report for which paper documentation has not been provided by the exporter will not be listed in the Report/Certification. The exporter has 120 days from the date the HMT Payment Report and the Report/Certification are issued (the 120-day period) to sign and return to CBP the Report/Certification in order to receive the refund set forth in that report and/or to submit to CBP a request for a Revised Report/Certification. Where the exporter chooses to receive the refund set forth in the Report/Certification, the exporter must sign and return the report to CBP. CBP will issue the refund upon receipt of the signed report. (3) Revised Report/Certification. A request for a Revised Report/Certification must be accompanied by documentation to support any payments not listed in the Report/Certification or corrections to listed payments. See paragraph (e)(4)(iv)(C) of this section regarding acceptable documentation. If an exporter (or its agent, as appropriate) both signs and returns to CBP a Report/Certification and requests a Revised Report/Certification, CBP will not, when reviewing the request for a Revised Report/Certification, approve for refund any corrections to the payments that were listed in the signed Report/Certification; CBP will, however, in that circumstance, consider approving any additional payments that were not listed in the signed Report/Certification. If an exporter does not sign and return to CBP a Report/Certification, but requests a Revised Report/Certification, CBP will consider approving for refund corrections to the payments listed in the Report/Certification and additional payments. Where the exporter requests a Revised Report/Certification, CBP will review the documentation submitted with the request, make a determination, and, within 60 days of the request’s receipt, issue a Revised Report/Certification that lists all payments approved for refund and the total amount of the refund owed. In order to receive the refund set forth in a Revised Report/Certification, the exporter must sign and return it to CBP. CBP will issue the refund upon its receipt of the signed report. An exporter, within the 120-day period, may submit additional requests for a Revised Report/Certification, with appropriate documentation, to cover any payments not approved for refund in a Revised Report/Certification previously issued by CBP. (4) Protest. For purposes of filing a protest under 19 U.S.C. 1514 (and 19 CFR part 174), unless issuance of a Revised Report/Certification is pending, any payments not approved for refund in a Report/Certification or a Revised Report/Certification issued by CBP within the 120-day period will be considered denied as of the date the period expires; a protest covering such payments must be filed within 180 days of that date. For any payments not approved for refund in a Revised Report/Certification issued after expiration of the 120-day period, a protest may be filed within 180 days of that report’s issuance. (5) Significance of signed Report/Certification and Revised Report/Certification. A Report/Certification or Revised Report/Certification must be signed by an officer of the company duly authorized to bind the company or by an agent (such as a broker or freight forwarder) representing the exporter in seeking a refund under this section. A Report/Certification or Revised Report/Certification signed by the exporter or its agent and received by CBP constitutes the exporter’s agreement that the amount of the refund set forth in the report is accurate and CBP’s payment of that refund amount is in full accord and satisfaction of all payments approved for refund in the report. The signed Report/Certification or Revised Report/Certification also represents the exporter’s release, waiver, and abandonment of all claims, excluding claims for interest, against the Government, its officers, agents, and assigns for costs, attorney fees, expenses, compensatory damages, and exemplary damages arising out of the payments approved for refund in the report. When an agent, including a freight forwarder, signs a Report/Certification or Revised Report/ Certification on behalf of an exporter(s), the agent certifies that it is acting on the exporter’s behalf and will use due diligence to forward the refund to the exporter, and, in the event the agent does not forward the refund to the exporter, will notify CBP and return the refund to CBP within one year of its receipt of the refund. Upon receipt of the signed Report/Certification or Revised Report/Certification, CBP releases, waives, and abandons all claims other than fraud against the exporter, its officers, agents, or employees arising out of all payments approved for refund in the report. (C) Documentation. For payments made prior to July 1, 1990, supporting documentation is required to obtain a refund and must be submitted in accordance with paragraphs (e)(4)(iv)(A) and/or (B)(3) of this section. For payments made on and after July 1, 1990, supporting documentation is not required to obtain a refund, unless the exporter seeks to prove corrections of payments listed in the Report/Certification (if the exporter did not sign and return it to CBP) and/or additional payments not listed in a Report/Certification, in accordance with paragraph (e)(4)(iv)(B)(3) of this section. The supporting documentation that CBP will accept as establishing entitlement to a refund, whether submitted with a refund request or a request for a Revised Report/Certification, is whichever of the following documents CBP accepted with the payment at the time it was made: a copy of the Export Vessel Movement Summary Sheet; where an Automated Summary Monthly Shipper’s Export Declaration was filed, a copy of a letter containing the exporter’s identification, its employer identification number (EIN), the Census Bureau reporting symbol, and, the quarter for which the payment was made; or a copy of a Harbor Maintenance Fee Quarterly Summary Report, CBP Form 349, for the quarter covering the refund requested. CBP also will consider other documentation offered as proof of payment of the fee, such as cancelled checks and/or affidavits from exporters attesting to the fact that all quarterly harbor maintenance tax payments made by the exporter were made exclusively for exports, and will accept that other documentation as establishing entitlement for a refund only if it clearly proves the payments were made for export harbor maintenance fees in the amounts sought to be refunded and were made by the party requesting the refund or the party on whose behalf the refund was requested. (f) Quarterly payments. All quarterly payments required by this section must be received no later than 31 days after the close of the quarter being paid. Quarterly periods end on the last day of March, June, September, and December. (g) Maintenance of records. Each importer, applicant for admission of cargo into a foreign trade zone, shipper and cruise vessel operator affected by this section must maintain all such documentation necessary for CBP to verify the accuracy of fee computations and to otherwise determine compliance under the law. Such documentation must be maintained for a period of 5 years from the date of fee calculation. The affected parties must advise the Director, Revenue Division, U.S. Customs and Border Protection, at the current address posted at Forms.CBP.gov, of the name, address, email and telephone number of a responsible officer who is able to verify any records required to be maintained under this paragraph. The Director, Revenue Division, must be promptly notified of any changes in the identifying information submitted. The records must be maintained and made available for inspection, copying, reproduction or other official use by CBP in accordance with the provisions of part 163 of this chapter. (h) Penalties/liquidated damages for failure to pay harbor maintenance fee and file summary sheet – (1) Amount of penalty or damages. Any party (including the importer, or shipper) who fails to pay the harbor maintenance fee and file the summary sheet at the time specified by regulation will incur a penalty equal to the amount of liquidated damages assessable for late filing of an entry summary pursuant to the provisions of § 142.15 of this chapter. An importer will be liable for payment of liquidated damages under the basic importation and entry bond, for failure to pay the harbor maintenance fee, as provided in such bond. (2) Application for relief. The party must follow the procedures set forth in part 171 of this chapter in filing an application for relief. Any application to cancel liquidated damages incurred must be made in accordance with part 172 of this chapter. (3) Mitigation. Any penalty assessed under this provision will be mitigated in a manner consistent with guidelines relating to cancellation of claims for liquidated damages for late filing of entry summaries. Any liquidated damages assessed under this provision will be mitigated in a manner consistent with guidelines published by the authority of the Commissioner of CBP for cancellation of claims for untimely payment of estimated duties, taxes and charges. (i) Privacy Act notice. Whenever an identification number is requested on the summary sheets provided for in paragraph (e) of this section, the disclosure of the social security number is mandatory when an internal revenue service number is not disclosed. Identification numbers are solicited under the authority of Executive Order 9397 and Pub. L. 99-662. The identification number provides unique identification of the party liable for the payment of the harbor maintenance fee. The number will be used to compare the information on the summary sheets with information submitted to the government on other forms required in the course of shipping or importing merchandise, which contain the identification number, e.g., Vessel Operation Report, to verify that the information submitted is accurate and current. Failure to disclose an identification number may cause a penalty pursuant to paragraph (h) of this section. The above information is set forth pursuant to the Privacy Act of 1974 (Pub. L. 93-579). #### “19 CFR Part 190 – Modernized Drawback” [ Learn More at Cornell Law ](https://www.law.cornell.edu/cfr/text/19/part-190) #### “19 CFR Part 190 – Modernized Drawback”” --- ### [Excise Tax Drawback](https://alliancechb.com/duty-drawback/excise-tax-drawback/) **Published:** December 10, 2025 **Author:** Alliance Drawback Services **Content:** # Excise taxdrawback explained. The importation of certain goods, such as spirits, alcoholic beverages and tobacco products, are subject to Federal Excise Tax and eligible for duty drawback refund upon exportation. ## Are Excise Taxes Eligible for Drawback? #### **Yes.** Federal excise taxes paid on beer, wine, spirits, tobacco products, and other qualifying goods are eligible for refund through duty drawback when those goods are subsequently exported or destroyed. It is also important to note that certain alcoholic beverages share the same HTSUS classification. For example, Gin is classified under HTSUS 2208.50.00. If a company imports gin into the United States and sells it domestically, it may use other Gin exports, regardless of their origin, to claim a drawback refund on the excise taxes paid. This is accomplished through HTS-level substitution, since both the imports and exports fall under the same 8-digit HTSUS number. ## Here’s an Example of Excise Tax Drawback ## Excise Tax paid Gin being imported is substituted against domestic Gin that is exported. ![](https://alliancechb.com/wp-content/uploads/2025/12/1-3.png) ### Import A company imports Gin into the United States under HTSUS 2208.50.00 and pays Federal Excise Tax to Customs and Border Protection. ![](https://alliancechb.com/wp-content/uploads/2025/12/fet_domestic_sale.png) ### Domestic Sale The company then sells the imported FET-paid Gin domestically in the United States. ![](https://alliancechb.com/wp-content/uploads/2025/12/fet_domestic_export.png) ### Domestic Export However, the company also domestically produces another Gin brand and exports from the United States under HTSUS 2208.50.00. ![](https://alliancechb.com/wp-content/uploads/2025/12/4-1.png) ### Drawback Refund The imported Gin becomes drawback eligible when the domestically produced, exported Gin is matched at the HTSUS level. ## Excise Tax Drawback Explained ## Watch and learn more about Excise Tax Drawback. https://youtu.be/mkogoOMopss ## The Legal Language of Excise Tax Drawback ### THE NATIONAL ASSOCIATION OF MANUFACTURERS, THE BEER INSTITUTE, Plaintiffs-Appellees v. DEPARTMENT OF THE TREASURY, UNITED STATES CUSTOMS AND BORDER PROTECTION, JANET YELLEN, IN HER OFFICIAL CAPACITY AS SECRETARY OF THE TREASURY, TROY MILLER, IN HIS OFFICIAL CAPACITY AS SENIOR OFFICIAL PERFORMING THE DUTIES OF THE COMMISSIONER FOR U.S. CUSTOMS AND BORDER PROTECTION, Defendants-Appellants 2020-1734 Appeal from the United States Court of International Trade in No. 1:19-cv-00053-JAR, Senior Judge Jane A. Restani. Decided: August 23, 2021 PETER D. KEISLER, Sidley Austin LLP, Washington, DC, argued for all plaintiffs-appellees. Plaintiff-appellee National Association of Manufacturers also represented by BARBARA GUY BROUSSARD, TOBIAS SAMUEL LOSS-EATON, VIRGINIA ANNE SEITZ; CATHERINE EMILY STETSON, Hogan Lovells US LLP, Washington, DC. JAMES EDWARD TYSSE, Akin Gump Strauss Hauer & Feld LLP, for plaintiff-appellee The Beer Institute. Also represented by LARS-ERIK ARTHUR HJELM, LIDE E. PATERNO, DEVIN S. SIKES. AUGUST FLENTJE, Appellate Staff, Civil Division, United States Department of Justice, Washington, DC, argued for all defendants-appellants. Also represented by CLAUDIA BURKE, JEFFREY B. CLARK, JEANNE DAVIDSON, JUSTIN REINHART MILLER, ALEXANDER J. VANDERWEIDE, Commercial Litigation Branch, Civil Division, United States Department of Justice, New York, NY; DANIEL J. PAISLEY, United States Department of the Treasury, Washington, DC. ALEXANDRA KHREBTUKOVA, Office of the Assistant Chief Counsel, Bureau of Customs and Border Protection, United States Department of Homeland Security, New York, NY, for defendant-appellant United States Customs and Border Protection JOHN MICHAEL PETERSON, Neville Peterson LLP, New York, NY, for amicus curiae Customs Advisory Services, Inc. Also represented by PATRICK KLEIN, RICHARD F. O’NEILL. Before LOURIE, PROST∗, and REYNA, Circuit Judges. REYNA, Circuit Judge. ∗ Circuit Judge Sharon Prost vacated the position of Chief Judge on May 21, 2021. This case involves the interaction of federal excise taxes and duty drawbacks for wine in the United States. The United States Government appeals from a judgment by the United States Court of International Trade holding that a set of regulations, collectively described herein as the Rule, promulgated in 2018 by the Department of Treasury and the United States Customs and Border Protection, are invalid as an unlawful interpretation of 19 U.S.C. § 1313(v). The question presented on appeal is whether the Court of International Trade erred when it invalidated the Rule interpreting 19 U.S.C. § 1313(v) finding that the statute was unambiguous at step one of Chevron. We conclude that the Court of International Trade did not err in finding that the Rule, which redefines “drawback” to include excise tax liability on exports that have neither been “paid or determined,” is contrary to the clear intent of Congress as expressed in the language and structure of the statute. Accordingly, we affirm the judgment of the Court of International Trade. ### BACKGROUND This appeal concerns a set of regulations, promulgated in 2018 by the Department of the Treasury (“Treasury”) and the United States Customs and Border Protection (“CBP” or “Customs”), described herein as the Rule.1 The Rule is an interpretation of 19 U.S.C. § 1313(v), which states in relevant part: 1 The Rule comprises the following regulations: 19 C.F.R. §§ 190.171(c)(3), 190.22(a)(1)(ii)(C), 190.32(b)(3), 191.171(d), 191.32(b)(4), the final sentence of 19 C.F.R. § 191.22(a), and the final sentence in the definition of “drawback” and “drawback claim” in 19 C.F.R. § 190.2. Merchandise that is exported or destroyed to satisfy any claim for drawback shall not be the basis of any other claim for drawback . . . . 19 U.S.C. § 1313(v). Generally, imported goods are subject to a variety of payments, such as tariffs, duties, fees, and certain taxes, such as an excise tax. A “drawback” is a customs transaction involving the refund of any payments that were made upon the importation of a good. Drawbacks are designed to incentivize exports from the United States and allow U.S. exporters to compete more fairly with overseas competitors. The most common form of drawback occurs when duties that are paid when a good is imported are refunded when the same good is exported. Another common form of drawback, known as a “substitution drawback,” involves the refund of duties, taxes, or fees that were paid upon importation and refunded when similar goods, normally merchandise classified under the same subheading of the Harmonized Tariff Schedule of the United States (“USHTS”), are exported. See 19 U.S.C. § 1313(j)(2), 19 C.F.R. § 191.22(a). The statute most relevant to substitution drawbacks is 19 U.S.C. § 1313(j)(2), which states in relevant part: \[W\]ith respect to imported merchandise on which was paid any duty, tax, or fee imposed under Federal law upon entry or importation \[…\] that \[…\] notwithstanding any other provision of law, upon the exportation or destruction of such other merchandise an amount calculated pursuant to regulations prescribed by the Secretary of the Treasury under subsection (l) shall be refunded as drawback. 19 U.S.C. § 1313(j)(2). Since 2008, substitution drawback has been allowed for wine where the imported wine and exported wine are of the same color and the price variation between the imported wine and the exported wine does not exceed fifty percent. See Food, Conservation, and Energy Act of 2008, Pub. L. No. 110-234, § 15421, 122 Stat. 923, 1547 (May 22, 2008) (codified as amended at19 U.S.C. § 1313(j)(2)). Since this change, companies that both import and export wine or transfer its right to drawback have been claiming drawbacks for taxes, fees, and duties paid on the imported wine based on their exports of similar wine, i.e., substituted wine. As an example, if a company imported 100 bottles of red wine and then exported 100 bottles of similarly priced red wine, that company could claim drawback for nearly all charges assessed on the imported wine. J.A. 4. The substitution in the example can also result in a near total refund of both tariffs and excise taxes2 paid on the imported wine. This can occur in situations where the substituted exported wine was either not subject to any excise tax by virtue of being exported from a bonded facility3, or had received a complete refund of any previously paid excise taxes. This results in a “double drawback.” J.A. 4. As a response to this practice, the Government promulgated the Rule to prevent “double recovery” of excise tax. J.A. 18–19. 2 An excise tax is imposed on certain domestically consumed goods, regardless of origin, such as wine, beer, spirits, tobacco, and petroleum products. J.A. 2. Drawbacks of excise taxes may occur in multiple ways. 3 An imported good is subject to tariffs, fees, and taxes upon “entry” in the United States. A good is deemed not to enter the United States if upon importation it is placed in a customs bonded warehouse. If the good is taken from a bonded warehouse and sold or consumed in the United States, the good has entered the United States and may be subject to tariffs and fees. But if the good is exported from a warehouse, no import duties are paid. The Rule makes two fundamental changes to the drawback regime. First, it includes within the definition of “drawback” and “drawback claim” a “refund or remission of other excise taxes pursuant to other provisions of law.” 19 C.F.R. § 190.2. Under this definition, the export of merchandise even without payment of an excise tax counts as a claim for drawback. See J.A. 5. Second, the Rule limits drawbacks to the amount of taxes paid and not previously refunded. See 19 C.F.R. §§ 190.171(c)(3), 190.22(a)(1)(ii)(C), 190.32(b)(3), 191.171(d), 191.22(a), and 191.32(b)(4). This second change prevents a domestically produced exported good, which would have been subject to the excise tax if made available for domestic use (sold or consumed), from qualifying for a claim for substitution drawback under the language of 19 U.S.C. § 1313(j)(2). J.A. 5. The National Association of Manufacturers (“NAM”) along with Intervenor, The Beer Institute,4 brought suit against the Treasury and CBP arguing that the Rule is contrary to law, arbitrary and capricious, and impermissibly retroactive. J.A. 5. NAM raised three primary arguments: (1) the language of the statute dealing with substitution drawbacks, § 1313(j)(2), forecloses the agencies’ interpretation of § 1313(v) because § 1313(j)(2) states that under certain conditions, the drawback shall be refunded “notwithstanding any other provision of law”; (2) the Rule’s interpretation of § 1313(v) conflicts with § 1313(l)(2), which provides for the calculation of substitution drawback; (3) the Rule includes a prohibition not contemplated in § 1313(v), namely the prohibition of a substitution drawback for excise taxes paid on imported goods where the 4 The Beer Institute submitted a brief concerning the retroactive application of the Rule. Because this court invalidates the Rule, those arguments are moot. substitute exported goods were exempt from excise tax. J.A. 5–6. The Government responded that the Treasury and CBP’s interpretation of § 1313(v) is “reasonable, historically supported, and necessary to reconcile the purpose of federal excise tax with the drawback regime.” J.A. 7. The Government further argued that a drawback is not only limited to taxes paid, but rather a drawback can extend to cover tax exemptions in order to prevent improper “piggybacking” of exception benefits onto drawback benefits. Id. (citing H.R. Rep. No. 103–361 at 130 (1993), reprinted in 1993 U.S.C.C.A.N. 2552, 2680 (stating that 19 U.S.C. § 1313 “codifies current Customs practice against ‘piggybacking’ other duty exemption benefits (foreign-trade zones, bonded warehouses and duty-free temporary importation) onto the drawback benefits.”). NAM replied that the Government improperly attempts to revert the statute back to CPB’s pre-2004 regime, which Congress rejected by allowing for the drawback of excise taxes. J.A. 7–8. The United States Court of International Trade (“CIT”) applied the two-part Chevron test to find that the Rule is unlawful as to the challenged provisions. Specifically, the CIT addressed whether Congress had “directly spoken to the precise question at issue.” J.A. 8. If Congress’s intent was clear, the CIT explained, then “that is the end of the matter,” as the agency and the court must “give effect to the unambiguously expressed intent of Congress.” Id. (citing See Chevron, U.S.A., Inc. v. NRDC, Inc., 467 U.S. 837, 842–43 (1984)). But if the statute is “silent or ambiguous with respect to the specific issue” then the court must determine whether the agency’s interpretation is “based on a permissible construction of the statute.” J.A. 9. Applying those principles, the CIT determined that the inquiry ends at step one because the Rule conflicts with the unambiguous text of the statute. Id. The CIT also concluded that, while the CBP identified the aforementioned “double-drawback” issue and expressed its concern on multiple occasions to Congress, Congress took no steps to curtail the practice. J.A. 4. Specifically, referring to certain portions of the legislative history, the CIT observed that “it appears that Congress has repeatedly chosen to expand access to drawback at the expense of lost excise tax revenue. The agencies cannot now attempt to alter this policy choice by way of a regulation that does not comport with the animating statute.” J.A. 18; see also J.A. 20. ### DISCUSSION We review the CIT’s interpretation of statutes and regulations de novo. Abbott Labs. v. United States, 573 F.3d 1327, 1330 (Fed. Cir. 2009). Courts review agencies’ interpretations of statutes by applying the two-step Chevron framework. See 467 U.S. at 842–43 & n.9. In applying Chevron, the Court first uses “traditional tools of statutory construction” to determine whether Congress has “directly spoken to the precise question at issue”; if so, “that is the end of the matter.” Id. at 843 & n.9. If not, the Court asks whether the regulation reflects “a permissible construction.” Id. at 843. To prevail, the Government must succeed in both its redefinition of “drawback,” particularly for the purposes of the “double drawback” prohibition of 19 U.S.C. § 1313(v), and in its interpretation of numerous subsections of 19 U.S.C. § 1313. I The Government argues that “claim for drawback” includes not only refunds of already-paid excise taxes on imports under the Tariff Act, 19 U.S.C. § 1313(d), but also includes cancellation of excise-tax liability for exports that have neither been “paid or determined” under the Internal Revenue Code (“IRC”), 26 U.S.C. § 5362(c). See Appellant’s Br. 6–7. The Rule was created to reconcile the two separate provisions to address the non-collection of taxes on certain exported merchandise. See J.A. 7. 19 U.S.C. § 1313(d) reads in relevant part: Upon the exportation of bottled distilled spirits and wines manufactured or produced in the United States on which an internal-revenue tax has been paid or determined, there shall be allowed, under regulations to be prescribed by the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, a drawback equal in amount to the tax found to have been paid or determined on such bottled distilled spirits and wines. 19 U.S.C. § 1313(d) (emphasis added). 26 U.S.C. §5362(c) of the IRC states, in relevant part, that wine, “on which tax has not been paid or determined” may be withdrawn from a bonded facility5 “without payment of tax for export.” Prior to the Government’s promulgation of the Rule, the applicable regulation defining drawback was the following: Drawback means the refund or remission, in whole or in part, of a customs duty, fee or internal revenue tax which was imposed on imported merchandise under Federal law because of its importation, and the refund of internal revenue taxes paid on domestic alcohol as prescribed in 19 U.S.C. 1313(d). 5 According to 19 U.S.C. § 1555(b)(1), “\[d\]uty-free sales enterprises may sell and deliver for export from the customs territory duty-free merchandise in accordance with this subsection and such regulations as the Secretary may prescribe to carry out this subsection” from a bonded facility. 19 C.F.R. § 191.2(i) (2015); see also id. § 191.3. The new regulation, as part of the Rule, reads: Drawback, as authorized for payment by CBP, means the refund, in whole or in part, of the duties, taxes, and/or fees paid on imported merchandise, which were imposed under Federal law upon entry or importation, and the refund of internal revenue taxes paid on domestic alcohol as prescribed in 19 U.S.C. 1313(d). More broadly, drawback also includes the refund or remission of other excise taxes pursuant to other provisions of law. 19 C.F.R. § 190.2 (emphasis added). The final sentence of the new regulation within the Rule expands the definition of drawback to encompass the “refund or remission” of excise taxes on exports. In support of its broadened definition of drawback, the Government asserts that § 1313(v)’s reference to any “claim for drawback” includes the cancellation of any excise-tax liability that has been paid or determined on exports. 19 U.S.C. § 1313(v). The Government relies on the language in 19 U.S.C. § 1313(d), which states that “a drawback \[is\] equal in amount to the tax found to have been paid or determined on such bottled distilled spirits and wines.” 19 U.S.C. § 1313(d) (emphasis added). The Government adds that the IRC uses the term “drawback” similarly. See 26 U.S.C. § 5062(b) (“there shall be allowed . . . a drawback equal in amount to the tax found to have been paid or determined . . . .” (emphasis added)). NAM does not contest this point as to taxes that are paid. See Appellant’s Br. 15. However, the Government goes further and argues that “drawback” encompasses the cancellation of excise taxes imposed on domestic products that are exported without the payment of tax. Herein lies the crux of the dispute. The Government contends that the term “drawback” should also be used to describe transactions in which excise-tax liability is extinguished under provisions where products are withdrawn for export without payment of tax. See 26 U.S.C. § 5362(c) (stating that wine exported without tax having been “paid or determined” does so without payment of tax); J.A. 12–13; Appellant’s Br. 19. The Government’s rationale is that, when products are withdrawn “without payment of tax” for export, they are not withdrawn “free of tax” because tax liability attaches at the time of production and is covered by bond and cancelled only upon proof of exportation. Appellant’s Br. 28; compare 26 U.S.C. § 5362(c)(1) (“without payment of tax for export”) with § 5362(c)(7)–(9) (“free of tax” for various uses including experimental and research purposes). We disagree. The Rule’s broadened definition of “drawback” includes a drawback of excise tax that was never “paid or determined” on exported merchandise. See 26 U.S.C. §§ 5704(b), 5214(a), 5362(c). This defies logic. A tax that has never been paid or determined cannot be said to have been “drawn back,” and goods that have been exported without payment of tax cannot give rise to a “claim” for drawback, because there would be no refund to be paid out or cancellation of liability to be made. The Government’s argument that taxes on bonded wine products have been “determined” at the point of production and “cancelled” upon exportation cannot be reconciled with 26 U.S.C. § 5362(c). “Determined” within the IRC refers to situations where tax is both determined and The Government’s argument that taxes on bonded wine products have been “determined” at the point of production and “cancelled” upon exportation cannot be reconciled with 26 U.S.C. § 5362(c). “Determined” within the IRC refers to situations where tax is both determined and paid at the time the goods are withdrawn from bond, or where “the amount of the tax to be paid is computed and fixed” upon withdrawal, “with payment to be made by return” later for either prepayment or deferred payment. S. Rep. No. 85-2090, at 100 (1958), reprinted in 1958 U.S.C.C.A.N. 4395, 4492; see also Appellee’s Br. 52. If bonded goods are withdrawn for export, however, tax liability is not computed and fixed for prepayment or deferred payment because a tax will never be paid at all. See, e.g., 26 U.S.C. § 5041(a) (stating that wine tax is “determined as of removal for consumption or sale” (emphasis added)). Thus, tax in that scenario would not be “determined.” The Government’s assertion that the tax is determined at the time of production is unpersuasive and does not explain the statutory distinction appearing in other IRC provisions between a tax that has been “paid or determined” and one that “has not been paid or determined.” Compare 26 U.S.C. § 5062(b) with 26 U.S.C. § 5214(a)(4). Moreover, had Congress intended “drawback” to describe all the instances in § 1313 and the IRC to which the agencies attempt to apply the term, it would not have selectively used the term in some sections, but not others. See Russello v. United States, 464 U.S. 16, 23 (1983) (“It is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion” of language.); see also BP P.L.C. v. Mayor & City Council of Baltimore, 141 S. Ct. 1532, 1539, 209 L. Ed. 2d 631 (2021) (“In the end, all of the parties’ fencing about language Congress didn’t use persuades us of only one thing—that we are best served by focusing on the language it did employ.”). Notably, both § 1313 and the IRC do not use the term “drawback” to refer to exportation without payment or determination of tax. Therefore, we conclude that the expansive definition in the Rule, which extends drawback to situations in which tax is never paid or determined, conflicts with the unambiguous text of the statute. II The Government also argues on appeal that the CIT erred in invalidating the Rule by erroneously reading the Rule to create irreconcilable statutory conflicts and irrational results. Appellant’s Br. 38 (citing J.A. 13). With respect to statutory conflicts, the Government argues that Congress’s addition of the “notwithstanding” clause in § 1313(j)(2), which requires a drawback of “any” tax imposed on importation “notwithstanding another provision of law,” is not indicative of Congress’s intent to allow for a substitution drawback even if excise tax has not been paid on the export because the Supreme Court has explained that a “notwithstanding” clause should not be “unreasonably expanded” to “narrow so dramatically an important provision that \[Congress\] inserted in the same statute.” Appellant’s Br. 39 (quoting Ministry of Def.& Support for the Armed Forces of the Islamic Republic of Iran v. Elahi, 556 U.S. 366, 386 (2009)). Next, the Government argues that the CIT erred in finding that the calculation methodology set forth in § 1313(l) is nullified by the Rule. With respect to the CIT’s finding that the Rule produces irrational results by preventing “an untaxed export from serving as substituted merchandise in a drawback claim on a corresponding import in any capacity,” the Government argues that the Rule does not prohibit this result but merely prohibits double recovery of the same tax. Appellant’s Br. 44 (citing J.A. 17). Additionally, the Government argues that the legislative history of the drawback regime does not support invalidating the Rule. We disagree and address each of the Government’s arguments below. In 2004, Congress amended 19 U.S.C. § 1313(j)(2) to require drawback of “any” tax imposed on importation, “notwithstanding any other provision of law.” 19 U.S.C. § 1313(j)(2). Section 1313(j)(2) provides the criteria for substitution drawback, which, as the CIT points out, does not include a requirement that a company must have already paid tax on its exports to receive a drawback. See J.A. 14– When the criteria are met, the CBP must pay a substitution drawback “notwithstanding any other provision of law.” 19 U.S.C. § 1313(j)(2). Congress added this “notwithstanding” clause in 2004 specifically to overrule a series of Customs rulings holding excise taxes ineligible for substitution drawback and to make excise taxes eligible for substitution drawback, like other federal charges imposed “upon entry or \[importation\].” Pub. L. No. 108-429, § 1557(a), 118 Stat. 2434 at 2579 (Dec. 3, 2004); NLRB v. SW Gen., Inc., 137 S. Ct. 929, 940 (2017) (explaining that a “notwithstanding” clause can be used to “show\[\] which of two or more provisions prevails in the event of a conflict”). By relying on an “other provision of law”—specifically, subsection (v)—the Rule would trump paragraph (j)(2) and render the “notwithstanding” clause meaningless. See J.A. 14. Accordingly, the interpretation of § 1313(v) as set forth in the Rule creates a conflict with the amended language of §1313(j)(2) and thus cannot support the Government’s interpretation. Next, with respect to the Government’s argument that the CIT erred in finding that the calculation methodology set forth in § 1313(l) is nullified by the Rule, § 1313(l)(2)(B)–(C) provides that the amount of drawback available based on substituted merchandise shall be “equal to 99 percent of the lesser of (i) the amount of duties, taxes, and fees paid with respect to the imported merchandise; or (ii) the amount of duties, taxes, and fees that would apply to the \[substituted\] exported article if the exported article were imported.” 19 U.S.C § 1313(l)(2)(B)–(C). Essentially, § 1313(l)(2) provides the amount of drawback that the CBP must pay if the substitution statute, § 1313(j)(2), is satisfied. As the CIT properly stated, § 1313(l)(2) requires that a refund be paid on imported goods upon the timely exportation of other goods with the same USHTS code regardless of whether taxes were paid on those other goods. See J.A. This is another example of how the Rule’s interpretation of § 1313(v) creates a conflict with § 1313(l) and cannot support the Government’s interpretation. Third, we address the Government’s contention that the CIT erred when it recognized that the Rule would create an irrational or absurd result by “prevent\[ing\] an untaxed export from serving as substituted merchandise in a drawback claim on a corresponding import in any capacity” or, in other words, would bar recovery of any duties, taxes and fees on the import, including the excise tax. J.A. 17. In response, the Government simply contends that the Rule does not prohibit this result but merely prohibits double recovery of the same tax. Appellant’s Br. 44. However, once exported merchandise has been used “to satisfy \[one\] claim for drawback,” § 1313(v), it cannot be used for that purpose again under the Rule. Thus, every untaxed exportation of domestic goods creates a “claim for drawback” that triggers this restriction under the Rule. Consequently, such goods can never “be the basis of any other claim for drawback.” 19 U.S.C. § 1313(v); see also Ark. Dairy Coop. Ass’n v. U.S. Dep’t of Agric., 573 F.3d 815, 829 (D.C. Cir. 2009) (finding that an interpretation producing “absurd” results “fails at Chevron step one”). Thus, under the Government’s interpretation, the Rule reads into § 1313(v) a restriction that does not exist. The CIT was correct in its finding that this produces an absurd result that fails at Chevron step one. As to the Government’s final argument, that the legislative history does not support invalidating the Rule, the Government argues that Congress was clear in guarding against abuse of the substitution-drawback privilege by prohibiting an importer or exporter from counting a drawback twice. The Government concedes that if the CIT’s analysis were credited, it suggests, at most, that Congress was aware of, but failed to correct, this issue as to wine. Appellant’s Br. 49. The Government further contends that the agencies’ estimated revenue loss supports its position more so than the CIT’s review of congressional inaction through the legislative history. We disagree. Here, the legislative history of the drawback regime demonstrates that Congress chose to expand access to drawbacks at the expense of excise taxes. For example, after § 1313(v) was added in 1993, in 2004, Congress amended 19 U.S.C. § 1313(j)(2) to require that drawbacks be paid “notwithstanding any other provision of law,” as discussed above. Then, in 2008, Congress liberalized substitution drawback for wine by allowing substitution based on any wine that is the same color and within 50 percent of the same price. See Pub. L. No. 110-234 § 15421, 122 Stat. at 1547 (codified as amended at 19 U.S.C. § 1313(j)(2)(2008)). Thereafter, the Treasury and the CBP proposed a regulation to limit drawback granted on exports to only the amount of taxes actually paid. Drawback of Internal Revenue Excise Tax, 74 Fed. Reg. 52,928, 52,931 (Oct. 15, 2009); J.A. 267. In response to opposition from legislators, the agencies eventually withdrew the proposed regulation. See Drawback of Internal Revenue Excise Tax, 75 Fed. Reg. 9,359–60 (Mar. 2, 2010); J.A. 273–74. No further action was taken by Congress. As the CIT noted, “Congress is presumed to know that the wine industry was filing substitution-drawback claims in situations where no excise tax had been paid and . . . appears to have at least indirectly sanctioned the practice.” J.A. 20. “This history demonstrates that Congress made a policy choice to encourage exports by expanding the ability to claim drawback, even with the knowledge that industries may then avoid some payment of excise tax.” Id. We agree. ### CONCLUSION We conclude that the challenged provisions of the Rule contravene the unambiguous text of the statute and, therefore, the inquiry ends at Chevron step one. Accordingly, we affirm the judgment of the CIT that the Rule is unlawful as to the challenged provisions. We have considered the parties’ remaining arguments and determine that we need not address them in light of our decision. ### AFFIRMED #### “United States Court of Appeals for the Federal Court” [ Learn More at CAFC U.S. Courts ](http://www.cafc.uscourts.gov/opinions-orders) #### “19 CFR Part 190 – Modernized Drawback”” --- ### [Substitution Drawback](https://alliancechb.com/duty-drawback/substitution-drawback/) **Published:** December 10, 2025 **Author:** Alliance Drawback Services **Content:** # Substitution drawbackmatching explained. The substitution matching method allows for exports, regardless of their origin, to be substituted at the 8 or 10-digit Harmonized Tariff Schedule number against duty paid imports. Additionally, certain qualifications must be met dependent of the filing provision being used. ## Here’s an Example of Substitution Matching ## HTS-level substitution allows flexibility matching duty-paid imports to qualifying exports. ![](https://alliancechb.com/wp-content/uploads/2025/12/unused_substitution.png) ### Unused Merchandise Substitution #### Provision: 19 USC 1313(j)(2) The export is matched to the import using HTS level substitution. To qualify for substitution [**matching** ](https://alliancechb.com/import-export-matching/ "Import Export Drawback Matching")filing unused drawback, the 8-digit HTS or 10-digit HTS cannot be classified as “[**Other**](https://alliancechb.com/the-other-other-problem/ "The “Other Other” Problem").” The export destination cannot be to a USMCA or US Territory, such as Canada or Mexico for example. If either is the case, [**direct identification**](https://alliancechb.com/duty-drawback/direct-identification-drawback/ "Direct Identification Duty Drawback") matching must be used. ![](https://alliancechb.com/wp-content/uploads/2025/12/manufacturing_substitution.png) ### Manufacturing Substitution #### Provision: 19 USC 1313(b) Using Manufacturing Substitution, raw materials or 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](https://alliancechb.com/duty-drawback/substitution-drawback/ "Substitution Drawback")**. ![](https://alliancechb.com/wp-content/uploads/2026/01/petrochemical.png) ### Petrochemical Drawback #### Provision: 19 USC 1313(p) The exported[ **petroleum product**](https://alliancechb.com/duty-drawback/petrochemical-drawback-qualifying-chemicals/ "Petrochemical Drawback Qualifying Chemicals"), regardless or its origin, can be substituted to claim drawback on the imported duty-paid petroleum product if they both share the same 8-digit HTS using [**Petrochemical Drawback**](https://alliancechb.com/duty-drawback/petrochemical-drawback/ "Petrochemical Drawback"). ## Substitution Drawback Explained ## Watch and learn more about Substitution Drawback. https://youtu.be/UEMZ8mxHAnA ## The Regulatory Language of Substitution Matching ### § 190.32 Substitution unused merchandise drawback. **(a) General**. Section 313(j)(2) of the Act, as amended (19 U.S.C. 1313(j)(2)), provides for [drawback of duties,](https://alliancechb.com/duty-drawback/duty-drawback-case-study/) 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. 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 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. 1313(j)(2). **(b) Allowable refund** – (1) Exportation. 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 (ii) The amount of duties, taxes, and fees that would apply to the exported article if the exported article were imported. (2) Destruction. In the case of an article that is destroyed, 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 (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. 1313(x)); or (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. 1313(x)). (3) Federal [excise tax](https://alliancechb.com/duty-drawback/excise-tax-drawback/ "Excise Tax Drawback"). 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. (c) Determination of HTSUS classification for substituted merchandise. Requests for binding rulings on the classification of imported, substituted, or exported merchandise may be submitted to CBP pursuant to the procedures set forth in part 177. **(d)** **Claims for wine** **–** (1) Alternative substitution standard. 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. 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. (2) Allowable refund. For any drawback claim for wine (as defined in § 190.2) based on 19 U.S.C. 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. (3) Required certification. When the basis for substitution for wine drawback claims under 19 U.S.C. 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 (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 rosé); (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 (C) The price variation between the imported wine and the exported wine does not exceed 50 percent. **(e) Operations performed on 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. 1313(j)(3)(B), on the substituted merchandise is not a use of that merchandise for purposes of this section. **(f) Designation by successor; 19 U.S.C. 1313(s) –** (1) General rule. Upon compliance with the requirements of this section and under 19 U.S.C. 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 (ii) Imported and/or substituted merchandise that was transferred to the predecessor from the person who imported and paid duty on the imported merchandise. (2) Drawback successor. 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 (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. (3) Certifications and required evidence – (i) Records of predecessor. The predecessor or successor must certify that the successor is in possession of the predecessor’s records which are necessary to establish the right to drawback under the law and regulations with respect to the imported and/or substituted merchandise. (ii) Merchandise not otherwise designated. The predecessor or successor must certify that the predecessor has not designated and will not designate, nor enable any other person to designate, the imported and/or substituted merchandise as the basis for drawback. (iii) Value of transferred property. In instances in which assets and other business interests of a division, plant, or other business unit of a predecessor are transferred, the predecessor or successor must specify, and maintain supporting records to establish, the value of the drawback rights and the value of all other transferred property. (iv) Review by CBP. The written agreement, merger, or corporate resolution, provided for in paragraph (f)(2) of this section, and the records and evidence provided for in paragraph (f)(3)(i) through (iii) of this section, must be retained by the appropriate party(s) for 3 years from the date of liquidation of the related claim and are subject to review by CBP upon request. ### § 190.22 Substitution drawback. **(a)** (1) **General –** (i) **Substitution standard.** If imported, duty-paid merchandise or merchandise classifiable under the same 8-digit HTSUS subheading number as the imported merchandise is used in the manufacture or production of articles within a period not to exceed 5 years from the date of importation of such imported merchandise, then upon the exportation, or destruction under CBP supervision, of any such articles, without their having been used in the United States prior to such exportation or destruction, drawback is provided for in section 313(b) of the Act, as amended (19 U.S.C. 1313(b)). 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. The amount of duties, taxes, and fees eligible for drawback is determined by per unit averaging, as defined in § 190.2, for any drawback claim based on 19 U.S.C. 1313(b). (ii) **Allowable refund –** (A) **Exportation.** 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) The amount of duties, taxes, and fees that would apply to the substituted merchandise if the substituted merchandise were imported. (B) **Destruction.** In the case of an article that is destroyed, 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 (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. 1313(x)); or (2) The amount of duties, taxes, and fees that would apply to the substituted merchandise if the substituted merchandise were 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. 1313(x)). (C) **Federal [excise tax](https://alliancechb.com/duty-drawback/excise-tax-drawback/ "Excise Tax Drawback").** 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. (2) **Special rule for sought chemical elements –** (i) **Substitution standard.** A sought chemical element, as defined in § 190.2, may be considered imported merchandise, or merchandise classifiable under the same 8-digit HTSUS subheading number as such imported merchandise, used in the manufacture or production of an article as described in paragraph (a)(1)(i) of this section, and it may be substituted for source material containing that sought chemical element, without regard to whether the sought chemical element and the source material are classifiable under the same 8-digit HTSUS subheading number, and apportioned quantitatively, as appropriate (see § 190.26(b)(4)). (ii) **Allowable refund.** The amount of drawback allowable will be determined in accordance with paragraph (a)(1)(ii) of this section. The value of the substituted source material must be determined based on the quantity of the sought chemical element present in the source material, as calculated per § 190.26(b)(4). **(b) Use by same manufacturer or producer at different factory.** 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. **(c)** **Designation.** A manufacturer or producer may designate any eligible imported merchandise or drawback product which it has used in manufacture or production. **(d)** **Designation by successor –** (1) **General rule.** Upon compliance with the requirements in this section and under 19 U.S.C. 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. (2) **Drawback successor.** 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 (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. (3) **Certifications and required evidence –** (i) **Records of predecessor.** The predecessor or successor must certify that the successor is in possession of the predecessor’s records which are necessary to establish the right to drawback under the law and regulations with respect to the merchandise or drawback product. (ii) **Merchandise not otherwise designated.** The predecessor or successor must certify that the predecessor has not designated and will not designate, nor enable any other person to designate, such merchandise or product as the basis for drawback. (iii) **Value of transferred property.** In instances in which assets and other business interests of a division, plant, or other business unit of a predecessor are transferred, the predecessor or successor must specify, and maintain supporting records to establish, the value of the drawback rights and the value of all other transferred property. (iv) **Review by CBP.** The written agreement, merger, or corporate resolution, provided for in paragraph (d)(2) of this section, and the records and evidence provided for in paragraph (d)(3)(i) through (iii) of this section, must be retained by the appropriate party(s) for 3 years from the date of liquidation of the related claim and are subject to review by CBP upon request. **(e)** **Multiple products –** (1) **General.** Where two or more products are produced concurrently in a substitution manufacturing operation, drawback will be distributed to each product in accordance with its relative value (see § 190.2) at the time of separation. (2) **Claims covering a manufacturing period.** Where the claim covers a manufacturing period rather than a manufacturing lot, the entire period covered by the claim is the time of separation of the products and the value per unit of product is the market value for the period (as provided for in the definition of relative value in § 190.2). Manufacturing periods in excess of one month may not be used without specific approval of CBP. (3) **Recordkeeping.** Records must be maintained showing the relative value of each product at the time of separation. ### § 190.174 Derivatives manufactured under 19 U.S.C. 1313(a) or (b). When the exported article which is the basis for a drawback claim under 19 U.S.C. 1313(p) is petroleum derivatives which were manufactured or produced in the United States and qualify for drawback under the manufacturing drawback law (19 U.S.C. 1313(a) or (b)), the requirements for drawback are as follows: **(a)** **Merchandise.** The merchandise which is the basis for drawback under 19 U.S.C. 1313(p) must: (1) Have been manufactured or produced as described in 19 U.S.C. 1313(a) or (b) from crude petroleum or a petroleum derivative; and (2) Be a “qualified article” as defined in § 190.172(a); **(b) Exported article.** The exported article on which drawback is claimed must be an “exported article” as defined in § 190.172(c); **(c) Exporter.** The exporter of the exported article must have either: (1) Manufactured or produced the qualified article in at least the quantity of the exported article; or (2) Purchased or exchanged (directly or indirectly) from a manufacturer or producer described in 19 U.S.C. 1313(a) or (b) the qualified article in at least the quantity of the exported article; **(d) Manufacture in specific facility.** 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 exported article must be exported either: (1) During the period provided for in the manufacturer’s or producer’s specific manufacturing drawback ruling (see § 190.8) in which the qualified article is manufactured or produced; or (2) Within 180 days after the close of the period in which the qualified article is manufactured or produced; and **(f) Amount of drawback.** The amount of drawback payable may not exceed the amount of drawback which would be attributable to the article manufactured or produced under 19 U.S.C. 1313(a) or (b) which serves as the basis for drawback. #### “19 CFR Part 190 – Modernized Drawback” [ Learn More at Cornell Law ](https://www.ecfr.gov/current/title-19/chapter-I/part-190) #### “19 CFR Part 190 – Modernized Drawback”” --- ### [Direct Identification Drawback](https://alliancechb.com/duty-drawback/direct-identification-drawback/) **Published:** December 10, 2025 **Author:** Alliance Drawback Services **Content:** # Direct identificationmatching explained. The direct identification matching method uses lot number or serial number tracking to match an exported product with its exact importation to claim drawback. However, in the absence of lot or serial number tracing, a claimant can utilize one of the acceptable accounting methods. ## Here’s an Example of Direct Identification Matching ## Direct Identification matching is used when merchandise does not qualify for HTS-level substitution. #### “19 CFR Part 190 – Modernized Drawback”” ![](https://alliancechb.com/wp-content/uploads/2025/12/unused_directid.png) ### Unused Merchandise Direct Identification #### Provision: 19 USC 1313(j)(1) The export is traced back to the import using lot number or serial number [**matching**](https://alliancechb.com/import-export-matching/ "Import Export Drawback Matching"). If lot or serial numbers are not present, then the claimant must use one of the accepted accounting methods, such as FIFO or LIFO. ![](https://alliancechb.com/wp-content/uploads/2025/12/manufacturing_directid.png) ### Manufacturing Direct Identification #### Provision: 19 USC 1313(a) Using Manufacturing [**Direct Identification**](https://alliancechb.com/duty-drawback/direct-identification-drawback/ "Direct Identification Drawback"), the imported component that is contained in the exported finished product is traced back to importation using a lot number or serial number. If imported components lose their identity when entered into inventory, then the claimant must use one of the accepted drawback accounting methods, such as FIFO or LIFO, to comply with the requirements of Direct Identification. ## Direct Identification Drawback Explained ## Watch and learn more about Direct Identification Drawback. https://youtu.be/UEMZ8mxHAnA ## The Regulatory Language of Direct Identification and Drawback Accounting Methods ### § 190.31 Direct identification unused merchandise drawback **(a)** **General**. Section 313(j)(1) of the Act, as amended (19 U.S.C. 1313(j)(1)), provides for drawback upon the exportation or destruction under CBP supervision of imported merchandise upon which was paid any duty, tax, or fee imposed under Federal law upon entry or importation, if the merchandise has not been used within the United States before such exportation or destruction. The total amount of drawback allowable will not exceed 99 percent of the amount of duties, taxes, and fees paid with respect to the imported merchandise. **(b) Time of exportation or destruction.** 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. **(c) Operations performed on imported merchandise.** 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. 1313(j)(3), on imported merchandise is not a use of that merchandise for purposes of this section. ### § 190.21 Direct identification manufacturing drawback. Section 313(a) of the Act, as amended (19 U.S.C. 1313(a)), provides for drawback upon the exportation, or destruction under CBP supervision, of articles 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. The amount of drawback allowable will not exceed 99 percent of the amount of duties, taxes, and fees paid with respect to the imported merchandise. However, duties may not be refunded upon the exportation or destruction of flour or by-products produced from imported wheat. Where two or more products result, drawback must be distributed among the products in accordance with their relative values, as defined in § 190.2, at the time of separation. Merchandise may be identified for drawback purposes under 19 U.S.C. 1313(a) in the manner provided for and prescribed in § 190.14. ### § 190.14 Identification of merchandise or articles by accounting method. **(a) General.** This section provides for the identification of merchandise or articles for drawback purposes by the use of accounting methods. This section applies to identification of merchandise or articles in inventory or storage, as well as identification of merchandise used in manufacture or production, as defined in § 190.2. This section is not applicable to situations in which the drawback law authorizes substitution (substitution is allowed in specified situations under 19 U.S.C. 1313(b), 1313(j)(2), 1313(k), and 1313(p); this section does apply to situations in these subsections in which substitution is not allowed, as well as to the subsections of the drawback law under which no substitution is allowed). When substitution is authorized, merchandise or articles may be substituted without reference to this section, under the criteria and conditions specifically authorized in the statutory and regulatory provisions providing for the substitution. **(b) Conditions and criteria for identification by accounting method.** Manufacturers, producers, claimants, or other appropriate persons may identify for drawback purposes lots of merchandise or articles under this section, subject to each of the following conditions and criteria: (1) The lots of merchandise or articles to be so identified must be fungible as defined in § 190.2; (2) The person using the identification method must be able to establish that inventory records (for example, material control records), prepared and used in the ordinary course of business, account for the lots of merchandise or articles to be identified as being received into and withdrawn from the same inventory. Even if merchandise or articles are received or withdrawn at different geographical locations, if such inventory records treat receipts or withdrawals as being from the same inventory, those inventory records may be used to identify the merchandise or articles under this section, subject to the conditions of this section. If any such inventory records (that is, inventory records prepared and used in the ordinary course of business) treat receipts and withdrawals as being from different inventories, those inventory records must be used and receipts into or withdrawals from the different inventories may not be accounted for together. If units of merchandise or articles can be specifically identified (for example, by serial number), the merchandise or articles must be specifically identified and may not be identified by accounting method, unless it is established that inventory records, prepared and used in the ordinary course of business, treat the merchandise or articles to be identified as being received into and withdrawn from the same inventory (subject to the above conditions); (3) Unless otherwise provided in this section or specifically approved by CBP (by a binding ruling under part 177 of this chapter), all receipts (or inputs) into and all withdrawals from the inventory must be recorded in the accounting record; (4) The records which support any identification method under this section are subject to verification by CBP (see § 190.61). If CBP requests such verification, the person using the identification method must be able to demonstrate how, under generally accepted accounting procedures, the records which support the identification method used account for all merchandise or articles in, and all receipts into and withdrawals from, the inventory, and the drawback per unit for each receipt and withdrawal; and (5) Any accounting method which is used by a person for drawback purposes under this section must be used exclusively, without using other methods for a period of at least 1 year, unless approval is given by CBP for a shorter period. **(c) Approved accounting methods.** The following accounting methods are approved for use in the identification of merchandise or articles for drawback purposes under this section. If a claim is eligible for the use of any accounting method, the claimant must indicate on the drawback entry whether an accounting method was used, and if so, which accounting method was used, to identify the merchandise as part of the complete claim (see § 190.51). (1) **First-in, first-out** (FIFO) – (i) General. The FIFO method is the method by which fungible merchandise or articles are identified by recordkeeping on the basis of the first merchandise or articles received into the inventory. Under this method, withdrawals are from the oldest (first-in) merchandise or articles in the inventory at the time of withdrawal. (ii) **Example.** If the beginning inventory is zero, 100 units with $1 drawback attributable per unit are received in inventory on the 2nd of the month, 50 units with no drawback attributable per unit are received into inventory on the 5th of the month, 75 units are withdrawn for domestic (non-export) shipment on the 10th of the month, 75 units with $2 drawback attributable per unit are received in inventory on the 15th of the month, 100 units are withdrawn for export on the 20th of the month, and no other receipts or withdrawals occurred in the month, the drawback attributable to the 100 units withdrawn for export on the 20th is a total of $75 (25 units from the receipt on the 2nd with $1 drawback attributable per unit, 50 units from the receipt on the 5th with no drawback attributable per unit, and 25 units from the receipt on the 15th with $2 drawback attributable per unit). The basis of the foregoing and the effects on the inventory of the receipts and withdrawals, and balance in the inventory thereafter are as follows: On the 2nd of the month the receipt of 100 units ($1 drawback/unit) results in a balance of that amount; the receipt of 50 units ($0 drawback/unit) on the 5th results in a balance of 150 units (100 with $1 drawback/unit and 50 with $0 drawback/unit); the withdrawal on the 10th of 75 units ($1 drawback/unit) results in a balance of 75 units (25 with $1 drawback/unit and 50 with $0 drawback/unit); the receipt of 75 units ($2 drawback/unit) on the 15th results in a balance of 150 units (25 with $1 drawback/unit, 50 with $0 drawback/unit, and 75 with $2 drawback/unit); the withdrawal on the 20th of 100 units (25 with $1 drawback/unit, 50 with $0 drawback/unit, and 25 with $2 drawback unit) results in a balance of 50 units (all 50 with $2 drawback/unit). (2) **Last-in, first out** (LIFO) – (i) General. The LIFO method is the method by which fungible merchandise or articles are identified by recordkeeping on the basis of the last merchandise or articles received into the inventory. Under this method, withdrawals are from the newest (last-in) merchandise or articles in the inventory at the time of withdrawal. (ii) **Example.** In the example in paragraph (c)(1)(ii) of this section, the drawback attributable to the 100 units withdrawn for export on the 20th is a total of $175 (75 units from the receipt on the 15th with $2 drawback attributable per unit and 25 units from the receipt on the 2nd with $1 drawback attributable per unit). The basis of the foregoing and the effects on the inventory of the receipts and withdrawals, and balance in the inventory thereafter are as follows: On the 2nd of the month the receipt of 100 units ($1 drawback/unit) results in a balance of that amount; the receipt of 50 units ($0 drawback/unit) on the 5th results in a balance of 150 units (100 with $1 drawback/unit and 50 with $0 drawback/unit); the withdrawal on the 10th of 75 units (50 with $0 drawback/unit and 25 with $1 drawback/unit) results in a balance of 75 units (all with $1 drawback/unit); the receipt of 75 units ($2 drawback/unit) on the 15th results in a balance of 150 units (75 with $1 drawback/unit and 75 with $2 drawback/unit); the withdrawal on the 20th of 100 units (75 with $2 drawback/unit and 25 with $1 drawback/unit) results in a balance of 50 units (all 50 with $1 drawback/unit). (3) **Low-to-high –** (i) **General.** The low-to-high method is the method by which fungible merchandise or articles are identified by recordkeeping on the basis of the lowest drawback amount per unit of the merchandise or articles in inventory. Merchandise or articles with no drawback attributable to them (for example, domestic merchandise or duty-free merchandise) must be accounted for and are treated as having the lowest drawback attributable to them. Under this method, withdrawals are from the merchandise or articles with the least amount of drawback attributable to them, then those with the next higher amount, and so forth. If the same amount of drawback is attributable to more than one lot of merchandise or articles, withdrawals are from the oldest (first-in) merchandise or articles among those lots with the same amount of drawback attributable. Drawback requirements are applicable to withdrawn merchandise or articles as identified (for example, if the merchandise or articles identified were attributable to an import more than 5 years before the claimed export, no drawback could be granted). (ii) **Ordinary low-to-high –** (A) **Method.** Under the ordinary low-to-high method, all receipts into and all withdrawals from the inventory are recorded in the accounting record and accounted for so that each withdrawal, whether for export or domestic shipment, is identified by recordkeeping on the basis of the lowest drawback amount per unit of the merchandise or articles available in the inventory. (iii) **Low-to-high method with established average inventory turn-over period –** (A) **Method.** Under the low-to-high method with established average inventory turn-over period, all receipts into and all withdrawals for export are recorded in the accounting record and accounted for so that each withdrawal is identified by recordkeeping on the basis of the lowest drawback amount per available unit of the merchandise or articles received into the inventory in the established average inventory turn-over period preceding the withdrawal. (B) **Accounting for withdrawals** (for domestic shipments and for export). Under the low-to-high method with established average inventory turn-over period, domestic withdrawals (withdrawals for domestic shipment) are not accounted for and do not affect the available units of merchandise or articles. All withdrawals for export must be accounted for whether or not drawback is available or claimed on the withdrawals. Once a withdrawal for export is made and accounted for under this method, the merchandise or articles withdrawn are no longer available for identification. (C) **Establishment of inventory turn-over period.** For purposes of the low-to-high method with established average inventory turn-over period, the average inventory turn-over period is based on the rate of withdrawal from inventory and represents the time in which all of the merchandise or articles in the inventory at a given time must have been withdrawn based on that rate. To establish an average of this time, at least 1 year, or 3 turn-over periods (if inventory turns over fewer than 3 times per year), must be averaged. The inventory turn-over period must be that for the merchandise or articles to be identified, except that if the person using the method has more than one kind of merchandise or articles with different inventory turn-over periods, the longest average turn-over period established under this section may be used (instead of using a different inventory turn-over period for each kind of merchandise or article). (D) **Example.** In the example in paragraph (c)(3)(ii)(B) of this section (but, as required for this method, without accounting for domestic withdrawals, and with an established average inventory turn-over period of 30 days), the drawback attributable to the January 15 withdrawal for export is zero (the available receipt in the preceding 30 days with the lowest amount of drawback is the January 2 receipt, of which 50 units will remain after the withdrawal), the drawback attributable to the February 5 withdrawal for export is $101.50 (the January 20 and January 25 receipts), the drawback attributable to the February 15 withdrawal for export is $47.50 (the February 10 receipt), the drawback attributable to the February 28 withdrawal for export is $51.50 (the February 20 and January 31 receipts), the drawback attributable to the March 15 withdrawal for export is $42.50 (the March 10 receipt), and the drawback attributable to the March 31 withdrawal for export is $98.00 (the March 25 and March 5 receipts). No drawback may be claimed on the basis of the January 5 receipt or the February 25 receipt because in the case of each, there were insufficient withdrawals for export within the established average inventory turn-over period; the 50 units remaining from the January 2 receipt after the January 15 withdrawal are not identified for a withdrawal for export because there is no other withdrawal for export (other than the January 15 withdrawal) within the established average inventory turn-over period; the March 20 receipt (50 units at $1.08) is not yet attributed to withdrawals for export. Total drawback attributable to withdrawals for export in this example would be $341.00. (iv) **Low-to-high blanket method –** (A) **Method.** Under the low-to-high blanket method, all receipts into and all withdrawals for export are recorded in the accounting record and accounted for. Each withdrawal is identified on the basis of the lowest drawback amount per available unit of the merchandise or articles received into inventory in the applicable statutory period for export preceding the withdrawal (e.g., 180 days under 19 U.S.C. 1313(p) and 5 years for other types of drawback claims pursuant to 19 U.S.C. 1313(r)). Drawback requirements are applicable to withdrawn merchandise or articles as identified (for example, no drawback could be granted generally if the merchandise or articles identified were attributable to an import made more than 5 years before the claimed export; and, for claims pursuant to 19 U.S.C. 1313(p), no drawback could be granted if the merchandise or articles identified were attributable to an import that was entered more than 180 days after the date of the claimed export or if the claimed export was more than 180 days after the close of the manufacturing period attributable to an import). (B) **Accounting for withdrawals** (for domestic shipments and for export). Under the low-to-high blanket method, domestic withdrawals (withdrawals for domestic shipment) are not accounted for and do not affect the available units of merchandise or articles. All withdrawals for export must be accounted for whether or not drawback is available or claimed on the withdrawals. Once a withdrawal for export is made and accounted for under this method, the merchandise or articles withdrawn are no longer available for identification. (C) **Example.** In the example in paragraph (c)(3)(ii)(B) of this section (but, as required for this method, without accounting for domestic withdrawals), the drawback attributable to the January 15 withdrawal for export is zero (the available receipt in the inventory with the lowest amount of drawback is the January 2 receipt, of which 50 units will remain after the withdrawal), the drawback attributable to the February 5 withdrawal for export is $50.00 (the remainder of the January 2 receipt and the January 5 receipt), the drawback attributable to the February 15 withdrawal for export is $47.50 (the February 10 receipt), the drawback attributable to the February 28 withdrawal for export is $50.50 (the February 20 and January 20 receipts), the drawback attributable to the March 15 withdrawal for export is $42.50 (the March 10 receipt), and the drawback attributable to the March 31 withdrawal for export is $96.00 (the March 25 and January 25 receipts). Receipts not attributed to withdrawals for export are the January 31 (50 units at $1.03), February 25 (50 units at $1.05), March 5 (50 units at $1.06), and March 20 (50 units at $1.08) receipts. Total drawback attributable to withdrawals for export in this example would be $286.50. (4) **Average –** (i) **General.** The average method is the method by which fungible merchandise or articles are identified on the basis of the calculation by recordkeeping of the amount of drawback that may be attributed to each unit of merchandise or articles in the inventory. In this method, the ratio of: (A) The total units of a particular receipt of the fungible merchandise in the inventory at the time of a withdrawal to; (B) The total units of all receipts of the fungible merchandise (including each receipt into inventory) at the time of the withdrawal; (C) Is applied to the withdrawal, so that the withdrawal consists of a proportionate quantity of units from each particular receipt and each receipt is correspondingly decreased. Withdrawals and corresponding decreases to receipts are rounded to the nearest whole number. (ii) **Example.** In the example in paragraph (c)(1)(ii) of this section, the drawback attributable to the 100 units withdrawn for export on the 20th is a total of $133 (50 units from the receipt on the 15th with $2 drawback attributable per unit, 33 units from the receipt on the 2nd with $1 drawback attributable per unit, and 17 units from the receipt on the 5th with $0 drawback attributable per unit). The basis of the foregoing and the effects on the inventory of the receipts and withdrawals, and balance in the inventory thereafter are as follows: On the 2nd of the month the receipt of 100 units ($1 drawback/unit) results in a balance of that amount; the receipt of 50 units ($0 drawback/unit) on the 5th results in a balance of 150 units (100 with $1 drawback/unit and 50 with $0 drawback/unit); the withdrawal on the 10th of 75 units (50 with $1 drawback/unit (applying the ratio of 100 units from the receipt on the 2nd to the total of 150 units at the time of withdrawal) and 25 with $0 drawback/unit (applying the ratio of 50 units from the receipt on the 5th to the total of 150 units at the time of withdrawal)) results in a balance of 75 units (with 50 with $1 drawback/unit and 25 with $0 drawback/unit, on the basis of the same ratios); the receipt of 75 units ($2 drawback/unit) on the 15th results in a balance of 150 units (50 with $1 drawback/unit, 25 with $0 drawback/unit, and 75 with $2 drawback/unit); the withdrawal on the 20th of 100 units (50 with $2 drawback/unit (applying the ratio of the 75 units from the receipt on the 15th to the total of 150 units at the time of withdrawal), 33 with $1 drawback/unit (applying the ratio of the 50 units remaining from the receipt on the 2nd to the total of 150 units at the time of withdrawal, and 17 with $0 drawback/unit (applying the ratio of the 25 units remaining from the receipt on the 5th to the total of 150 units at the time of withdrawal)) results in a balance of 50 units (25 with $2 drawback/unit, 17 with $1 drawback/unit, and 8 with $0 drawback/unit, on the basis of the same ratios). (5) **Inventory turn-over for limited purposes.** A properly established average inventory turn-over period, as provided for in paragraph (c)(3)(iii)(C) of this section, may be used to determine: (i) The fact and date(s) of use in manufacture or production of the designated imported merchandise and other (substituted) merchandise (see 19 U.S.C. 1313(b)); or (ii) The fact and date(s) of manufacture or production of the exported or destroyed articles (see 19 U.S.C. 1313(a) and (b)). **(d) Approval of other accounting methods.** (1) Persons proposing to use an accounting method for identification of merchandise or articles for drawback purposes which has not been previously approved for such use (see paragraph (c) of this section), or which includes modifications from the methods listed in paragraph (c) of this section, may seek approval by CBP of the proposed accounting method under the provisions for obtaining an administrative ruling (see part 177 of this chapter). The conditions applied and the criteria used by CBP in approving such an alternative accounting method, or a modification of one of the approved accounting methods, will be the criteria in paragraph (b) of this section, as well as those in paragraph (d)(2) of this section. (2) In order for a proposed accounting method to be approved by CBP for purposes of this section, it must meet the following criteria: (i) For purposes of calculations of drawback, the proposed accounting method must be either revenue neutral or favorable to the Government; and (ii) The proposed accounting method should be: (A) Generally consistent with commercial accounting procedures, as applicable for purposes of drawback; (B) Consistent with inventory or material control records used in the ordinary course of business by the person proposing the method; and (C) Easily administered by CBP. #### “19 CFR Part 190 – Modernized Drawback” [ Learn More at Cornell Law ](https://www.ecfr.gov/current/title-19/chapter-I/part-190) #### “19 CFR Part 190 – Modernized Drawback”” --- ### [Rejected Merchandise Drawback](https://alliancechb.com/duty-drawback/rejected-merchandise-drawback/) **Published:** December 10, 2025 **Author:** Alliance Drawback Services **Content:** # Rejected merchandisedrawback explained. Rejected merchandise utilizes imported materials that do not meet specifications at the time of importation or are shipped without the consent of the consignee. The tax paid imported merchandise can be either returned to the vendor or destroyed under Customs supervision and 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. ## Here’s an Example of Rejected Merchandise Drawback ## Imports that did not meet specification, defective consumer returns, or were shipped without the consignee’s consent. #### “19 CFR Part 190 – Modernized Drawback”” ![](https://alliancechb.com/wp-content/uploads/2025/12/rejected_merchandise.png) ### Rejected Merchandise #### Provision: 19 USC 1313(c) For example, the imported bicycle was sold to a domestic customer, and did not meet specification standards per the customer’s order. The vendor was notified, and the bicycle was returned, becoming [**drawback** ](https://alliancechb.com/duty-drawback/ "Duty Drawback")eligible. ## Rejected Merchandise Explained ## Watch and learn more about Rejected Merchandise Drawback. https://youtu.be/UEMZ8mxHAnA ## The Regulatory Language of Rejected Merchandise Drawback ### § 190.41 Rejected merchandise drawback Section 313(c) of the Act, as amended (19 U.S.C. 1313(c)), 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. The total amount of drawback allowable will be 99 percent of the amount of duties paid with respect to the imported, duty-paid merchandise. See subpart P of this part for drawback of internal revenue taxes for unmerchantable or nonconforming distilled spirits, wines, or beer. ### § 190.42 Procedures and supporting documentation **(a) Time limit for exportation or destruction.** Drawback will be denied on merchandise that is exported or destroyed after the statutory 5-year time period. **(b) Required documentation.** The claimant must submit documentation to CBP as part of the complete drawback claim (see § 190.51) to establish that the merchandise did not conform to sample or specification, was shipped without the consent of the consignee, or was defective as of the time of importation (see § 190.45 for additional requirements for claims made on rejected retail merchandise under 19 U.S.C. 1313(c)(1)(C)(ii)). If the claimant was not the importer, the claimant must also: (1) Submit a statement signed by the importer and every other person, other than the ultimate purchaser, that owned the goods, that no other claim for drawback was made on the goods by any other person; and (2) Certify that records are available to support the statement required in paragraph (b)(1) of this section. **(c) Notice.** A notice of intent to export or destroy merchandise which may be the subject of a rejected merchandise drawback claim (19 U.S.C. 1313(c)) must be provided to CBP to give CBP the opportunity to examine the merchandise. The claimant, or the exporter (for destruction under CBP supervision, see § 190.71), must file at the port of intended redelivery to CBP custody a Notice of Intent to Export, Destroy, or Return Merchandise for Purposes of Drawback on CBP Form 7553 at least 5 working days prior to the date of intended return to CBP custody, unless the claimant has been granted a waiver of prior notice (see § 190.91) or complies with the procedures for 1-time waiver in § 190.36. **(d) Required information.** The notice must provide the bill of lading number, if known, the name and telephone number, mailing address, and, if available, fax number and email address of a contact person, and the location of the merchandise. **(e) Decision to waive examination.** Within 2 working days after receipt of the Notice of Intent to Export, Destroy, or Return Merchandise for Purposes of Drawback (see paragraph (c) of this section), CBP will notify, in writing, the party designated on the Notice of CBP’s decision to either examine the merchandise to be exported or destroyed, or to waive examination. If CBP timely notifies the designated party, in writing, of its decision to examine the merchandise (see paragraph (f) of this section), but the merchandise is exported or destroyed without having been presented to CBP for such examination, any drawback claim, or part thereof, based on the Notice of Intent to Export, Destroy, or Return Merchandise for Purposes of Drawback, must be denied. If CBP notifies the designated party, in writing, of its decision to waive examination of the merchandise, or, if timely notification of a decision by CBP to examine or to waive examination is absent, the merchandise may be exported or destroyed without delay and will be deemed to have been returned to CBP custody. **(f) Time and place of examination.** If CBP gives timely notice of its decision to examine the merchandise to be exported or destroyed, the merchandise to be examined must be promptly presented to CBP. CBP must examine the merchandise within 5 working days after presentation of the merchandise. The merchandise may be exported or destroyed without examination if CBP fails to timely examine the merchandise after presentation to CBP, and in such case the merchandise will be deemed to have been returned to CBP custody. If the examination is to be completed at a port other than the port of actual exportation or destruction, the merchandise must be transported in-bond to the port of exportation or destruction. **(g) Extent of examination.** The appropriate CBP office may permit release of merchandise without examination, or may examine, to the extent determined to be necessary, the items exported or destroyed. **(h) Drawback claim.** When filing the drawback claim, the drawback claimant must correctly calculate the amount of drawback due (see § 190.51(b)). The procedures for restructuring a claim (see § 190.53) apply to rejected merchandise drawback if the claimant has an ongoing export program which qualifies for this type of drawback. **(i) Exportation.** Claimants must provide documentary evidence of exportation (see subpart G of this part). The claimant may establish exportation by mail as set out in § 190.74. ### § 190.71 Drawback on articles destroyed under CBP supervision **(a) Procedure.** At least 7 working days before the intended date of destruction of merchandise or articles upon which drawback is intended to be claimed, a Notice of Intent to Export, Destroy, or Return Merchandise for Purposes of Drawback on CBP Form 7553 must be filed by the claimant with the CBP port where the destruction is to take place, giving notification of the date and specific location where the destruction is to occur. Within 4 working days after receipt of the CBP Form 7553, CBP will advise the filer in writing of its determination to witness or not to witness the destruction. If the filer of the notice is not so notified within 4 working days, the merchandise may be destroyed without delay and will be deemed to have been destroyed under CBP supervision. Unless CBP determines to witness the destruction, the destruction of the articles following timely notification on CBP Form 7553 will be deemed to have occurred under CBP supervision. If CBP attends the destruction, CBP will certify on CBP Form 7553. **(b) Evidence of destruction.** When CBP does not attend the destruction, the claimant must submit evidence that destruction took place in accordance with the Notice of Intent to Export, Destroy, or Return Merchandise for Purposes of Drawback on CBP Form 7553. The evidence must be issued by a disinterested third party (for example, a landfill operator). The type of evidence depends on the method and place of destruction, but must establish that the merchandise was, in fact, destroyed within the meaning of “destruction” in § 190.2. **(c) Completion of drawback entry.** After destruction, the claimant must provide CBP Form 7553, certified by the CBP official witnessing the destruction in accordance with paragraph (a) of this section, to CBP as part of the complete drawback claim based on the destruction (see § 190.51(a)). If CBP has not attended the destruction, the claimant must provide the evidence that destruction took place in accordance with the approved CBP Form 7553, as provided for in paragraph (b) of this section, as part of the complete drawback claim based on the destruction (see § 190.51(a)). **(d) Deduction for value of recovered materials.** Under 19 U.S.C. 1313(x), a destruction may include a process by which materials are recovered from imported merchandise or from an article manufactured from imported merchandise for drawback claims made pursuant to 19 U.S.C. 1313(a), (b), (c), and (j). In determining the amount of duties to be refunded as drawback to a claimant, the value of recovered materials (including the value of any tax benefit or royalty payment) that accrues to the drawback claimant must be deducted from the value of the imported merchandise that is destroyed, or from the value of the merchandise used, or designated as used, in the manufacture of the article. #### “19 CFR Part 190 – Modernized Drawback” [ Learn More at Cornell Law ](https://www.ecfr.gov/current/title-19/chapter-I/part-190) #### “19 CFR Part 190 – Modernized Drawback”” --- ### [Petrochemical Drawback](https://alliancechb.com/duty-drawback/petrochemical-drawback/) **Published:** December 10, 2025 **Author:** Alliance Drawback Services **Content:** # Petrochemicaldrawback explained. The petrochemical drawback filing provision allows for the refund of duties on the export of domestically produced petrochemicals in exchange ([substituted](https://alliancechb.com/duty-drawback/substitution-drawback/ "Substitution Drawback")) for chemicals imported into the United States, so long as they both fall within the same 8-digit HTSUS classification. ## Here’s an Example of Petrochemical Drawback ## Petrochemical drawback allows you to substitute exported petrochemicals at the 8-digit HTSUS. #### “19 CFR Part 190 – Modernized Drawback”” ![](https://alliancechb.com/wp-content/uploads/2026/01/petrochemical.png) ### Petrochemical Drawback #### Provision: 19 USC 1313(p) The exported petroleum product, regardless or its origin, can be substituted to claim drawback on the imported duty paid petroleum product if they both share the same 8-digit HTS and the import and export fall within 180 days of each other. *Note: While the regulations state “petroleum derivatives”, not all qualifying chemicals are derived from petroleum.* [ View 1313(p) Qualifying List ](/duty-drawback/manufacturing-drawback) ## Petrochemical Drawback Explained ## Watch and learn more about Petrochemical Drawback. https://youtu.be/UEMZ8mxHAnA ## The Regulatory Language of Petrochemical Drawback ### § 190.171 General; drawback allowance. **(a) *General.*** Section 313(p) of the Act, as amended ([19 U.S.C. 1313(p)](https://www.govinfo.gov/link/uscode/19/1313)), provides for drawback for duties, taxes, and fees paid on qualified articles (see definition below) which consist of either petroleum derivatives that are imported, duty-paid, and qualified for drawback under the unused merchandise drawback law ([19 U.S.C. 1313(j)(1)](https://www.govinfo.gov/link/uscode/19/1313)), or petroleum derivatives that are manufactured or produced in the United States, and qualified for drawback under the manufacturing drawback law ([19 U.S.C. 1313(a)](https://www.govinfo.gov/link/uscode/19/1313) or [(b)](https://www.govinfo.gov/link/uscode/19/1313)). **(b) *Allowance of drawback.*** Drawback may be granted under [19 U.S.C. 1313(p)](https://www.govinfo.gov/link/uscode/19/1313): **(1)** In cases where there is no manufacture, upon exportation of the imported article, an article of the same kind and quality, or any combination thereof; or **(2)** In cases where there is a manufacture or production, upon exportation of the manufactured or produced article, an article of the same kind and quality, or any combination thereof. **(c) *Calculation of drawback.*** For drawback of finished petroleum derivatives pursuant to section 1313(p), the claimant is required to calculate the total amount of drawback due, for purposes of [§ 190.51(b)](https://www.law.cornell.edu/cfr/text/19/part-190 "19 CFR Part 190 - MODERNIZED DRAWBACK"), which will not exceed 99 percent of the allowable duties, taxes, and fees, subject to the following: **(1) *Per unit averaging calculation.*** The amount of duties, taxes, and fees eligible for drawback is determined by per unit averaging, as defined in [§ 190.2](https://www.law.cornell.edu/cfr/text/19/part-190 "19 CFR Part 190 - MODERNIZED DRAWBACK"), for any drawback claim based on [19 U.S.C. 1313(p)](https://www.govinfo.gov/link/uscode/19/1313) pursuant to the standards set forth in [§ 190.172(b)](https://www.law.cornell.edu/cfr/text/19/part-190) and without respect to the limitations set forth in sub[paragraphs (B)](https://www.govinfo.gov/link/uscode/19/1313) and [(C) of 19 U.S.C. 1313(l)](https://www.govinfo.gov/link/uscode/19/1313). **(2) *Limitations.*** The amount of duties, taxes, and fees eligible for drawback is not subject to the limitations set out in [19 U.S.C. 1313(p)(4)](https://www.govinfo.gov/link/uscode/19/1313) for unused merchandise claims (no manufacture) and manufacturing claims (see 190.173(e) and 190.174(f)). **(3) Federal excise tax.** For purposes of drawback of internal revenue tax imposed under Chapters 32 and 38 (with the exception of Subchapter A of Chapter 38) of the Internal Revenue Code of 1986, as amended (IRC), drawback granted on the export of substituted merchandise will be limited to the amount of taxes paid (and not returned by refund, credit, or drawback) on the substituted merchandise. #### “19 CFR Part 190 – Modernized Drawback” [ Learn More at Cornell Law ](https://www.ecfr.gov/current/title-19/chapter-I/part-190) #### “19 CFR Part 190 – Modernized Drawback”” --- ### [Manufacturing Drawback](https://alliancechb.com/duty-drawback/manufacturing-drawback/) **Published:** December 9, 2025 **Author:** Alliance Drawback Services **Content:** # Manufacturingdrawback explained. Manufacturing drawback utilizes duty-paid raw materials or component parts that are used to make a new and different article of commerce in the United States that is exported. The production process must result in a product with either a new name, character, or use. ## Here’s an Example of Manufacturing Drawback ## Duty-paid raw materials or components used in exported finished goods. #### “19 CFR Part 190 – Modernized Drawback”” ![](https://alliancechb.com/wp-content/uploads/2025/12/manufacturing_directid.png) ### Manufacturing Direct Identification #### Provision: 19 USC 1313(a) Using Manufacturing [**direct identification**](https://alliancechb.com/duty-drawback/direct-identification-drawback/ "Direct Identification Drawback"), the imported component that is contained in the exported finished product is traced back to importation using a lot number or serial number. If imported components lose their identity when entered into inventory, then the claimant must use one of the accepted drawback accounting methods, such as FIFO or LIFO, to comply with the requirements of Direct Identification. ![](https://alliancechb.com/wp-content/uploads/2025/12/manufacturing_substitution.png) ### Manufacturing Substitution #### Provision: 19 USC 1313(b) When filing under the provisions of 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](https://alliancechb.com/duty-drawback/substitution-drawback/ "Substitution Drawback")**. ## Manufacturing Drawback Rulings ## A claimant must secure a ruling to file under the provisions of Manufacturing Drawback. ### General Manufacturing Ruling General manufacturing drawback rulings are designed to simplify drawback for certain common manufacturing operations. As an example, manufacturers assembling finished products from component parts can file under an existing general ruling. A manufacturer or producer engaged in an operation that falls within a published general manufacturing drawback ruling simply submits a letter of notification of intent to operate under that general ruling. ### Specific Manufacturing Ruling If the manufacturing operations of the company fall outside one of the general rulings, then the claimant must seek a specific ruling approval from Customs headquarters. ## Manufacturing Drawback Explained ## Watch and learn more about Manufacturing Drawback. https://youtu.be/UEMZ8mxHAnA ## The Regulatory Language of Manufacturing Drawback ### § 190.21 Direct identification manufacturing drawback Section 313(a) of the Act, as amended (19 U.S.C. 1313(a)), provides for drawback upon the exportation, or destruction under CBP supervision, of articles 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. The amount of drawback allowable will not exceed 99 percent of the amount of duties, taxes, and fees paid with respect to the imported merchandise. However, duties may not be refunded upon the exportation or destruction of flour or by-products produced from imported wheat. Where two or more products result, drawback must be distributed among the products in accordance with their relative values, as defined in § 190.2, at the time of separation. Merchandise may be identified for drawback purposes under 19 U.S.C. 1313(a) in the manner provided for and prescribed in § 190.14. ### § 190.22 Substitution drawback **(a)** (1) **General –** (i) **Substitution standard.** If imported, duty-paid merchandise or merchandise classifiable under the same 8-digit HTSUS subheading number as the imported merchandise is used in the manufacture or production of articles within a period not to exceed 5 years from the date of importation of such imported merchandise, then upon the exportation, or destruction under CBP supervision, of any such articles, without their having been used in the United States prior to such exportation or destruction, drawback is provided for in section 313(b) of the Act, as amended (19 U.S.C. 1313(b)). 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. The amount of duties, taxes, and fees eligible for drawback is determined by per unit averaging, as defined in § 190.2, for any drawback claim based on 19 U.S.C. 1313(b). (ii) **Allowable refund –** (A) **Exportation.** 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) The amount of duties, taxes, and fees that would apply to the substituted merchandise if the substituted merchandise were imported. (B) **Destruction.** In the case of an article that is destroyed, 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 (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. 1313(x)); or (2) The amount of duties, taxes, and fees that would apply to the substituted merchandise if the substituted merchandise were 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. 1313(x)). (C) **Federal excise tax.** 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. (2) **Special rule for sought chemical elements –** (i) **Substitution standard.** A sought chemical element, as defined in § 190.2, may be considered imported merchandise, or merchandise classifiable under the same 8-digit HTSUS subheading number as such imported merchandise, used in the manufacture or production of an article as described in paragraph (a)(1)(i) of this section, and it may be substituted for source material containing that sought chemical element, without regard to whether the sought chemical element and the source material are classifiable under the same 8-digit HTSUS subheading number, and apportioned quantitatively, as appropriate (see § 190.26(b)(4)). (ii) **Allowable refund.** The amount of drawback allowable will be determined in accordance with paragraph (a)(1)(ii) of this section. The value of the substituted source material must be determined based on the quantity of the sought chemical element present in the source material, as calculated per § 190.26(b)(4). **(b) Use by same manufacturer or producer at different factory.** 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. **(c)** **Designation.** A manufacturer or producer may designate any eligible imported merchandise or drawback product which it has used in manufacture or production. **(d)** **Designation by successor –** (1) **General rule.** Upon compliance with the requirements in this section and under 19 U.S.C. 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. (2) **Drawback successor.** 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 (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. (3) **Certifications and required evidence –** (i) **Records of predecessor.** The predecessor or successor must certify that the successor is in possession of the predecessor’s records which are necessary to establish the right to drawback under the law and regulations with respect to the merchandise or drawback product. (ii) **Merchandise not otherwise designated.** The predecessor or successor must certify that the predecessor has not designated and will not designate, nor enable any other person to designate, such merchandise or product as the basis for drawback. (iii) **Value of transferred property.** In instances in which assets and other business interests of a division, plant, or other business unit of a predecessor are transferred, the predecessor or successor must specify, and maintain supporting records to establish, the value of the drawback rights and the value of all other transferred property. (iv) **Review by CBP.** The written agreement, merger, or corporate resolution, provided for in paragraph (d)(2) of this section, and the records and evidence provided for in paragraph (d)(3)(i) through (iii) of this section, must be retained by the appropriate party(s) for 3 years from the date of liquidation of the related claim and are subject to review by CBP upon request. **(e)** **Multiple products –** (1) **General.** Where two or more products are produced concurrently in a substitution manufacturing operation, drawback will be distributed to each product in accordance with its relative value (see § 190.2) at the time of separation. (2) **Claims covering a manufacturing period.** Where the claim covers a manufacturing period rather than a manufacturing lot, the entire period covered by the claim is the time of separation of the products and the value per unit of product is the market value for the period (as provided for in the definition of relative value in § 190.2). Manufacturing periods in excess of one month may not be used without specific approval of CBP. (3) **Recordkeeping.** Records must be maintained showing the relative value of each product at the time of separation. #### “19 CFR Part 190 – Modernized Drawback” [ Learn More at Cornell Law ](https://www.law.cornell.edu/cfr/text/19/part-190) #### “19 CFR Part 190 – Modernized Drawback”” --- ### [Unused Merchandise Drawback](https://alliancechb.com/duty-drawback/unused-merchandise-drawback/) **Published:** December 9, 2025 **Author:** Alliance Drawback Services **Content:** # Unused merchandisedrawback explained. Unused merchandise utilizes imported duty-paid materials or finished exported product in essentially the same condition. This provision allows for incidental operations, such as testing, cleaning, and repackaging. Essentially any value-added process short of a manufacturer is allowable under unused merchandise. However, the merchandise cannot be used in the United States for its intended purpose prior to exportation. ## Here’s an Example of Unused Merchandise Drawback ## For imported duty-paid merchandise that is exported in essentially the same condition. #### “19 CFR Part 190 – Modernized Drawback”” ![](https://alliancechb.com/wp-content/uploads/2025/12/unused_directid.png) ### Unused Direct Identification #### Provision: 19 USC 1313(j)(1) The export is traced back to the import with [**direct identification**](https://alliancechb.com/duty-drawback/direct-identification-drawback/ "Direct Identification Drawback") using lot number or serial number matching. If lot or serial numbers are not present, then the claimant must use one of the accepted accounting methods, such as FIFO or LIFO. ![](https://alliancechb.com/wp-content/uploads/2025/12/unused_substitution.png) ### Unused Substitution #### Provision: 19 USC 1313(j)(2) The export is matched to the import using HTS level [**substitution**](https://alliancechb.com/duty-drawback/substitution-drawback/ "Substitution Drawback"). To qualify for substitution matching the 8-digit HTS or 10-digit HTS cannot be classified as “Other.” The export destination cannot be to a USMCA or US Territory, such as Canada or Mexico for example. If either is the case, [**direct identification**](https://alliancechb.com/duty-drawback/direct-identification-drawback/ "Direct Identification Drawback") matching must be used. ## Unused Merchandise Explained ## Watch and learn more about Unused Merchandise Drawback. https://youtu.be/mkogoOMopss ## The Regulatory Language of Unused Merchandise Drawback ### § 190.31 Direct identification unused merchandise drawback **(a)** **General**. Section 313(j)(1) of the Act, as amended (19 U.S.C. 1313(j)(1)), provides for drawback upon the exportation or destruction under CBP supervision of imported merchandise upon which was paid any duty, tax, or fee imposed under Federal law upon entry or importation, if the merchandise has not been used within the United States before such exportation or destruction. The total amount of drawback allowable will not exceed 99 percent of the amount of duties, taxes, and fees paid with respect to the imported merchandise. **(b) Time of exportation or destruction.** 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. **(c) Operations performed on imported merchandise.** 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. 1313(j)(3), on imported merchandise is not a use of that merchandise for purposes of this section. ### § 190.32 Substitution unused merchandise drawback **(a) General.** Section 313(j)(2) of the Act, as amended (19 U.S.C. 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. 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 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. 1313(j)(2). **(b) Allowable refund –** (1) Exportation. 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 (ii) The amount of duties, taxes, and fees that would apply to the exported article if the exported article were imported. (2) Destruction. In the case of an article that is destroyed, 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 (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. 1313(x)); or (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. 1313(x)). (3) Federal [excise tax](https://alliancechb.com/duty-drawback/excise-tax-drawback/ "Excise Tax Drawback"). 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. (c) Determination of HTSUS classification for substituted merchandise. Requests for binding rulings on the classification of imported, substituted, or exported merchandise may be submitted to CBP pursuant to the procedures set forth in part 177. **(d)** **Claims for wine** **–** (1) Alternative substitution standard. 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. 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. (2) Allowable refund. For any drawback claim for wine (as defined in § 190.2) based on 19 U.S.C. 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. (3) Required certification. When the basis for substitution for wine drawback claims under 19 U.S.C. 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 (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 rosé); (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 (C) The price variation between the imported wine and the exported wine does not exceed 50 percent. **(e) Operations performed on 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. 1313(j)(3)(B), on the substituted merchandise is not a use of that merchandise for purposes of this section. **(f) Designation by successor; 19 U.S.C. 1313(s) –** (1) General rule. Upon compliance with the requirements of this section and under 19 U.S.C. 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 (ii) Imported and/or substituted merchandise that was transferred to the predecessor from the person who imported and paid duty on the imported merchandise. (2) Drawback successor. 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 (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. (3) Certifications and required evidence – (i) Records of predecessor. The predecessor or successor must certify that the successor is in possession of the predecessor’s records which are necessary to establish the right to drawback under the law and regulations with respect to the imported and/or substituted merchandise. (ii) Merchandise not otherwise designated. The predecessor or successor must certify that the predecessor has not designated and will not designate, nor enable any other person to designate, the imported and/or substituted merchandise as the basis for drawback. (iii) Value of transferred property. In instances in which assets and other business interests of a division, plant, or other business unit of a predecessor are transferred, the predecessor or successor must specify, and maintain supporting records to establish, the value of the drawback rights and the value of all other transferred property. (iv) Review by CBP. The written agreement, merger, or corporate resolution, provided for in paragraph (f)(2) of this section, and the records and evidence provided for in paragraph (f)(3)(i) through (iii) of this section, must be retained by the appropriate party(s) for 3 years from the date of liquidation of the related claim and are subject to review by CBP upon request. #### “19 CFR Part 190 – Modernized Drawback” [ Learn More at Cornell Law ](https://www.ecfr.gov/current/title-19/chapter-I/part-190) #### “19 CFR Part 190 – Modernized Drawback”” --- ### [Duty Drawback Explained](https://alliancechb.com/duty-drawback/) **Published:** December 12, 2025 **Author:** Alliance Drawback Services **Content:** # What is duty drawbackand how does it work? Originally enacted in 1789 as part of the Original Tariff Act, [duty drawback](https://www.ecfr.gov/current/title-19/chapter-I/part-190) 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. \[rev\_slider alias=”furniture-store-isometric-slider” slidertitle=”Furniture Store Isometric Slider”\]\[/rev\_slider\] ## What is Duty Drawback? ## Watch and learn more about everything related to Duty Drawback. https://youtu.be/UEMZ8mxHAnA ## Duty Drawback Filing Provisions ## The statutory drawback filing provisions found in the Tariff Act of 1930 as Amended ### Unused Merchandise Drawback ## Provisions: 19 USC 1313(j)(1) and 1313(j)(2) 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 Drawback ](/duty-drawback/unused-merchandise-drawback) ### Manufacturing Drawback ## Provisions: 19 USC 1313(a) and 1313(b) Manufacturing 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 Drawback ](/duty-drawback/manufacturing-drawback) ### Petrochemical Drawback ## Provision: 19 USC 1313(p) An 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 Drawback ](/duty-drawback/petrochemical-drawback) ### Rejected Merchandise Drawback ## Provision: 19 USC 1313(c) Rejected 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 Merchandise ](/duty-drawback/rejected-merchandise-drawback) ## Duty Drawback Matching Methods ## These are the two methods used to match exports back to duty-paid imports. ### Direct Identification Matching in Duty Drawback ## Provisions: 1313(j)(1), 1313(a) and 1313(c) 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 Drawback ](/duty-drawback/direct-identification-drawback) ### Substitution Matching in Duty Drawback ## Provisions: 1313(j)(2), 1313(b) and 1313(p) The 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 Drawback ](/duty-drawback/substitution-drawback) ## Customs Fees, Taxes and Tariffs ## Fees, taxes, and tariffs that are eligible for duty drawback. ### Section 301 Tariff Refunds 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 Refunds ](/section-301-tariff-refunds) ### Excise Tax Refunds The 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 Refunds ](/duty-drawback/excise-tax-drawback) ### MPF & HMF Refunds The 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 Refunds ](/duty-drawback/mpf-hmf-drawback-refunds) ## Other Drawback Opportunities ## Other ways to maximize your duty drawback program. ### Third Party Drawback 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. For example, Company A imports orange juice from Brazil and pays the duty to Customs before selling the juice domestically with INCO terms Delivered Duty Paid (DDP) to Company B in the United States. Company B then exports the duty paid orange juice from the United States. While either party can submit the claim to Customs, referred to as the drawback claimant, the regulations grant the exporter the first right to submit the to claim 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 Drawback ](/duty-drawback/third-party-drawback) ### Duty Drawback Trading Duty 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. [ Learn More About Drawback Trading ](/duty-drawback/duty-drawback-trading) --- ### [Drawback Program Advocacy & Defense](https://alliancechb.com/duty-drawback/duty-drawback-claim-advocacy/) **Published:** January 21, 2026 **Author:** Alliance Drawback Services **Content:** # Compliant claimsprotect recovery. ## Drawback Program Advocacy & Defense ## When U.S. Customs and Border Protection requests verification or raises questions, experienced advocacy is critical. We manage claim advocacy on your behalf, coordinating responses, presenting clear justifications, and defending your position so recoveries are protected and disruption is minimized. ### CBP Verification & Inquiries We serve as your primary point of contact during CBP reviews and verification requests. - Coordination and response to CBP Requests for Information and verifications - Collection and organization of supporting records - Clear explanation of claim methodology, calculations, and eligibility - Controlled communication to ensure consistency and accuracy ### Record Assembly & Justification Strong advocacy is built on complete documentation and well supported claims. - Assembly of claim level supporting documentation - Traceability from source data through filed claims - Preparation of written explanations and justifications - Alignment to approved privileges, rulings, and SOPs ### Dispute Resolution & Amendments When questions escalate or disagreements arise, we actively defend your claims. - Preparation of amendments and corrective filings, when appropriate - Support for explanations related to adjustments, corrections, or data changes - Coordination on protests or follow on actions impacting drawback - Strategic guidance to preserve recoveries while maintaining compliance ### Ongoing Program Protection Advocacy does not stop with a single inquiry. We use each interaction to strengthen the program. - Identification of root causes and control gaps - Recommendations to improve data, documentation, or procedures - Updates to SOPs and controls to prevent repeat issues - Ongoing support to keep the program in good standing --- ### [Drawback Regulatory Compliance & Governance](https://alliancechb.com/duty-drawback/drawback-compliance-governance/) **Published:** January 21, 2026 **Author:** Alliance Drawback Services **Content:** # Continuous oversight,monitored compliance. ## Drawback Regulatory Compliance & Governance ## A sustainable drawback program requires ongoing governance, not one-time setup. We continuously monitor regulatory updates, compliance guidance, and CBP requirements to keep your program aligned, defensible, and audit ready as trade conditions and activity evolve. ### Regulatory Monitoring & Guidance We stay current on the regulatory landscape and translate changes into practical program actions. - Ongoing monitoring of CBP regulations, guidance, and policy updates - Assessment of impact to existing privileges, rulings, and methodologies - Advisory support on regulatory changes affecting eligibility or recovery - Clear communication of required adjustments ### Periodic Data & Claim Reviews Regular program reviews help ensure accuracy, consistency, and continued compliance. - Scheduled reviews of your drawback program - Validation of claim logic, quantities, and values - Identification of trends, anomalies, and emerging risks - Recommendations for corrective action when needed ### SOP Maintenance & Improvement As your business and trade flows change, procedures must evolve with them. - Periodic review and refinement of drawback SOPs - Updates to reflect regulatory changes and operational shifts - Reinforcement of roles, responsibilities, and controls - Alignment with audit expectations and best practices ### Proactive Risk Detection We identify and address risks before they become compliance issues. - Early detection of data inconsistencies and control gaps - Assessment of events impacting claims, including amendments and corrections - Support for corrective actions and disclosures, when required - Ongoing strengthening of internal controls --- ### [Drawback Claim Preparation & Filing](https://alliancechb.com/duty-drawback/drawback-claim-preparation-and-filing/) **Published:** January 21, 2026 **Author:** Alliance Drawback Services **Content:** # Maximized recovery,compliant claims. ## Duty Drawback Claim Preparation & Filing ## We prepare and file fully compliant duty drawback claims with precision and discipline, ensuring accurate values, complete documentation, and timely submission. Our process is designed to secure refunds faster while minimizing administrative lift for your internal teams. ### Claim Preparation Each claim is built on multi-dimensional matching through our proprietary software, allowing Alliance to unlock opportunities other providers miss. - Advanced algorithms prioritize ideal statutory filing provision and optimized import/export selection - End to end claim construction for your drawback claims - Continuous verification of eligibility, quantities, and values - Alignment to approved privileges, rulings, and methodologies - Complete document linkage and audit ready support ### Filing & Timeline Management We manage the entire filing lifecycle to keep claims moving, and your business forecasted and predictable. - Preparation and submission through ACE - Accelerated Payment Privilege allows payment 30-days from filing - Deadline management and status tracking - Proactive issue identification to avoid delays or rejections ### ACE Reconciliation & Post Filing Management Approval does not end at submission. We reconcile outcomes and ensure claims are fully and accurately processed. - Monitoring claim status and approvals in ACE - Reconciliation of approved amounts to expected recovery - Follow up on CBP questions, notices, and requests for information - Support through final liquidation ### Accounting for Data Impacting Events We account for all activity that can affect claim accuracy, eligibility, and value. - Post Summary Corrections and entry amendments - Reconciliations and reconciliation entries - Protests and protest outcomes - Prior disclosures and corrective actions - Manufacturing adjustments and inventory corrections - Continuous updates to reflect changes in underlying data ### Controls & Compliance Assurance Strong controls are embedded throughout the filing process to reduce risk and ensure defensibility. - Multi level review and validation prior to filing - Clear audit trails from source data to filed claim - Consistency checks across entries, exports, and manufacturing records - Documentation retention aligned with CBP requirements --- ### [Drawback Strategic Advisory](https://alliancechb.com/duty-drawback/drawback-strategic-advisory/) **Published:** January 21, 2026 **Author:** Alliance Drawback Services **Content:** # Evolving strategiesempower business. ## Duty Drawback Strategic Advisory ## Trade strategies change as your business grows, enters new markets, or introduces new products. Our strategic advisory services ensure your drawback program evolves alongside your operations, remains compliant, and continues to maximize recovery opportunities. ### Program Expansion & Optimization We help expand and refine existing drawback programs to reflect changes in your supply chain and business model. - Evaluation of new products, markets, and trade flows - Expansion into additional drawback types or methodologies - Optimization of existing claims and program structures - Ongoing alignment with financial and compliance objectives ### Regulatory Strategy & Interpretation Our team provides expert guidance on complex regulatory questions that impact drawback eligibility and recovery. - Advising on manufacturing interpretations and eligibility scenarios - Support for complex substitution and valuation questions - Identification of excise tax applicability and recovery opportunities - Risk assessment and defensibility analysis ### ITC Petitions & Statistical Breakouts When existing tariff structures limit recovery, we assist with regulatory advocacy to unlock new opportunities. - Petitioning the U.S. International Trade Commission for new statistical breakouts - Data analysis to support petitions and economic justification - Coordination with internal stakeholders and external advisors - Ongoing monitoring following approval ### Data-Driven Opportunity Identification We use data insights to uncover new refund channels and enhance program performance. - Analysis of import, export, and manufacturing data trends - Identification of underutilized or missed drawback opportunities - Support for new refund channels beyond traditional drawback - Continuous improvement driven by measurable results --- ### [Drawback Training & Education](https://alliancechb.com/duty-drawback/drawback-training-and-education/) **Published:** January 21, 2026 **Author:** Alliance Drawback Services **Content:** # Drawback knowledgeempowers stakeholders. ## Duty Drawback Training & Education ## A successful drawback program depends on informed stakeholders who understand both the regulations and how they apply in practice. We educate your teams using real world examples grounded in regulatory expertise, ensuring confidence, consistency, and compliance. ### Stakeholder Training We tailor training to the roles and responsibilities of each audience, focusing on what matters most to their day to day activities. - Compliance, trade, logistics, finance, and operations teams - Executive and leadership level overviews - Broker and third party alignment sessions, when appropriate - Training designed around your actual drawback program and data ### Regulatory Education Our training is built on deep knowledge of U.S. Customs and Border Protection regulations and industry best practices. - Duty drawback fundamentals and program types - Substitution rules, eligibility, and common risk areas - Documentation, recordkeeping, and audit expectations - Updates on regulatory changes and CBP guidance ### Program Specific Enablement We ensure your teams understand how the drawback program functions within your organization. - Walkthrough of approved privileges, rulings, and methodologies - SOP based training aligned to operational workflows - Roles, responsibilities, and internal controls - Clear escalation paths for questions and exceptions ### Delivery Methods Training is delivered in the format that best fits your organization. - Onsite or virtual training sessions - Live workshops and working sessions - Reference materials and written guidance - Ongoing advisory support as questions arise --- ### [Drawback Document Management](https://alliancechb.com/duty-drawback/drawback-document-management/) **Published:** January 21, 2026 **Author:** Alliance Drawback Services **Content:** # Centralized, secure,automated collection. ## Duty Drawback Document Management ## Effective document management is critical to maintaining a compliant, defensible duty drawback program. We ensure all required records are collected, secured, organized, and readily accessible to support claim preparation and audit readiness. ### Document Collection & Ingestion We support every secure document ingestion method needed to work seamlessly with claimants and third parties across the supply chain. - Import and export documents from brokers and forwarders - Manufacturing records from internal systems and suppliers - Commercial invoices, bills of lading, proofs of export, and entry data - Secure ingestion via SFTP, API connections, encrypted email, shared portals, and direct system integrations - Proprietary Robotic Process Automation (RPA) to automate repetitive document collection and retrieval tasks ### Third-Party Coordination We act as a centralized point of control for document collection, reducing burden on your internal teams. - Act as a firewall of confidential information between suppliers and customers - Direct coordination with brokers, forwarders, suppliers, and customers - Standardized document requests and formats - Follow-up and exception management to resolve missing or incomplete records - Controlled access to ensure data security and confidentiality ### Organization & Recordkeeping All documents are indexed, organized, and retained in accordance with drawback best practices. - Structured document repositories by claim, entry, and export - Clear linkage between source documents and drawback claims - Record retention aligned with regulatory requirements - Rapid retrieval to support audits, reviews, and internal inquiries - Client accessible via our secure, online portal ### Automation & Controls Automation and controls are built into our document management process to improve accuracy and reduce risk. - RPA-driven collection of document completeness - Exception reporting and resolution tracking - Audit trails documenting document receipt and review - Ongoing monitoring to ensure continued compliance ## Required Drawback Records ## Documentation that is used to support and substantiate transactions used in your drawback claims. ### Import Records - CF 7501 (required) - Bill of Lading - Commercial Invoice - Packing List - Purchase Order ### Export Records - Bill of Lading (required) - B3 (required) if exported to Canada - Pedimento (required) if exported to Mexico - Commercial Invoice - Packing List - Proof of Delivery (required) ### ERP Records - ERP Receipt (required) - ERP Withdrawal (required) ### Production Records - Bills of Material (required) - Specifications - Records of Use - Waste Records ### Quality Records - Vendor Specifications - Certifications ### Destruction Records - Certificate of Destruction (required) - Proof of Destruction ### Foreign Trade Zone Records - 214 Admission Form - FTZ Reporting - Must enter Zone-Restricted Status --- ### [Drawback Data Aggregation & Validation](https://alliancechb.com/duty-drawback/data-aggregation-and-validation/) **Published:** January 20, 2026 **Author:** Alliance Drawback Services **Content:** # Accurate data,compliant program. ## Duty Drawback Data Aggregation & Validation ## Accurate, complete, and validated data is the backbone of any successful duty drawback program. Our approach ensures that every claim is built on reliable information, reducing risk and improving recovery potential. ### Data Collection & Aggregation We centralize all required data from multiple sources to create a single, accurate picture of your import, export, and if applicable, manufacturing activity. - Import and export documentation from brokers and forwarders - Manufacturing production and usage records - ERP, accounting, and shipping system data - Consolidation into standardized, structured formats for analysis ### Data Validation & Quality Control We apply rigorous multi-point validation checks and controls to ensure all data is accurate, complete, and compliant with CBP requirements. - Cross-verification against source documents - Automated and manual checks for completeness and consistency - Identification and resolution of discrepancies before claims submission - Account for reconciliation, PSCs, Protests, Prior Disclosures, etc. - Continuous monitoring to maintain data integrity over time ### Provision & Eligibility Analysis Accurate identification of eligible merchandise is critical for maximizing drawback recovery. - Validate HTS classifications and duty rates - Ensure correct application of substitution rules - Map imported and exported merchandise to manufactured goods - Flag and resolve potential compliance issues early ### Integration & Reporting We make sure your data is actionable, auditable, and ready for claim submission. - Generate structured, CBP-ready reports for drawback claims - Provide dashboards and analytics for internal review - Maintain full audit trail and documentation - Support ongoing program improvements based on data insights ## Source Data & Filing Provisions ![](https://alliancechb.com/wp-content/uploads/2026/01/alliance_sourcedata.png) --- ### [Drawback Program Implementation](https://alliancechb.com/duty-drawback/drawback-program-implementation/) **Published:** January 20, 2026 **Author:** Alliance Drawback Services **Content:** # Maximized recovery,built on compliance. ## Duty Drawback Program Implementation ## Implementing a compliant, efficient duty drawback program requires more than filing claims,it requires a deep understanding of your business, your supply chain, and your operational realities. Our implementation process is designed to build a program that is accurate, auditable, and sustainable from day one. ### Program Discovery & Business Alignment We begin by learning your business from the ground up. This foundational phase ensures the drawback program is tailored to your operations rather than forcing your operations to fit a generic model. - Review of business products, classifications, and duty profiles - Mapping import, export, and manufacturing flows - Understanding systems, data availability, and recordkeeping practices - Coordination with internal stakeholders across compliance, logistics, finance, and IT - Designing SOPs that are specific to your business and drawback best practices ### Privilege Applications & Rulings We manage the preparation, drafting, and submission of all required U.S. Customs and Border Protection (CBP) applications and requests needed to support your drawback program. - Drafting and submitting drawback privilege applications (e.g., accelerated payment, waiver of prior notice, one-time waiver) - Preparing manufacturing drawback ruling requests, when applicable - Responding to CBP questions and Requests for Information - Supporting approval through final CBP authorization - CBP approval is typically 4-6 months for privilege applications ### Broker & Forwarder Coordination A successful drawback program depends on accurate and timely data from all parties in the transaction chain. We work directly with your brokers and forwarders to ensure alignment and consistency. - Identification of all relevant customs brokers and freight forwarders - Direct coordination to obtain required import and export documentation - Data validation and gap analysis - Establishing standardized document and data transfer processes ### SOP Development & Controls Clear procedures and strong internal controls are critical to long-term program success and audit readiness. We develop customized Standard Operating Procedures (SOPs) that reflect how your business actually operates. - End-to-end SOPs covering imports, exports, manufacturing, and claims - Defined roles, responsibilities, and escalation paths - Record retention and audit support protocols - Controls designed to align with CBP expectations and best practices ### Implementation Management & Status Tracking Implementation is managed as a structured project, with transparency and accountability throughout. - Onsite or virtual implementation support - Regular weekly status calls - Action item tracker with owners, timelines, and dependencies - Ongoing issue resolution and program refinement --- ### [Careers](https://alliancechb.com/careers/) **Published:** October 24, 2022 **Author:** Alliance Drawback Services **Content:** # Turn your potentialinto drawback expertise. Join a team that invests in your growth and deliver impactful results. ## Grow with Alliance ## Explore our active career opportunities. ## What Can You Expect? ## Watch and learn more about working at Alliance. https://youtu.be/hlEMa3x1Yxc --- ### [Our Services](https://alliancechb.com/duty-drawback-services/) **Published:** October 11, 2022 **Author:** Alliance Drawback Services **Content:** \[rev\_slider alias=”charts-template-showcase” slidertitle=”Charts Template Showcase”\]\[/rev\_slider\] ## Our Services ## The Services We Provide For You ## Complimentary Assessment We perform a comprehensive review of your import, export, and manufacturing activity to identify all eligible drawback opportunities. Our analysis delivers estimated recovery potential and clear reporting to support a tailored fee structure, internal approval, program implementation, and ongoing management alignment. [ Learn More ](/duty-drawback/duty-drawback-assessment/) ## Drawback Implementation We manage the full setup of your drawback program, including drafting and submitting privilege applications with CBP, coordinating systems access, and developing best-practice SOPs. Our implementation includes a detailed action tracker to keep milestones, responsibilities, and go-live steps organized and on schedule. [ Learn More ](/duty-drawback/drawback-program-implementation/) ## Data Aggregation & Validation Trade data is spread across broker systems, Customs ACE, and internal platforms. We consolidate and reconcile it into complete, audit ready records for compliance and recovery. Our validation ensures HTS classifications, quantities, values, and admissibility are accurate to prevent delays, lost refunds, and compliance issues. [ Learn More ](/duty-drawback/data-aggregation-and-validation/) ## Document Retrieval & Management We automate retrieval, processing, and archiving of drawback records through Alliance’s Apollo platform using RPA and AI. Apollo extracts data from brokers, forwarders, carriers, and internal systems, cutting manual effort, improving accuracy, eliminating delays, and keeping audit ready compliance throughout the drawback lifecycle. [ Learn More ](/duty-drawback/drawback-document-management/) ## Drawback Training & Education We create custom training workshops to educate stakeholders on drawback regulations, required controls, and best practices. These sessions clarify roles, reinforce accountability, strengthen compliance, and support the long-term sustainability of your drawback program as operations evolve. [ Learn More ](/duty-drawback/drawback-training-and-education/) ## Strategic Program Advisory Drawback strategies evolve with business models and supply chains. We help optimize your program by advising on sourcing and supply chain changes. We assess substitution eligibility, petition the U.S. International Trade Commission when needed, and use data driven insights to uncover additional refund opportunities, ensuring full allowable recovery. [ Learn More ](/duty-drawback/drawback-strategic-advisory/) ## Claim Preparation & Filing We prepare and file compliant drawback claims using Alliance’s Apollo platform. Powered by AI and optimized algorithms, Apollo improves substitution analysis and identifies extra recovery opportunities, boosting recoveries up to 15% under substitution rules while ensuring audit ready accuracy and compliance. [ Learn More ](/duty-drawback/drawback-claim-preparation-and-filing/) ## Compliance & Governance We continuously track regulatory updates and CBP requirements to keep your drawback program aligned and audit ready. Our approach includes periodic data reviews, SOP refinements, and proactive risk checks to ensure internal controls remain strong as trade, regulations, and business conditions evolve. [ Learn More ](/duty-drawback/drawback-compliance-governance/) ## Program Advocacy & Defense When CBP opens a verification or inquiry, we manage the response, handle records and submissions, and act as your primary contact. We prepare amendments and explanations as needed to protect recoveries, minimize disruption, and keep your drawback program in good standing. [ Learn More ](/duty-drawback/duty-drawback-claim-advocacy/) --- ## Categories ### [Duty Drawback News](https://alliancechb.com/category/duty-drawback-news/) **Description:** Duty drawback news ---