Winners – Traditional commodities (metals, agriculture products generally, chemicals, beverages) and other products with classifications that do not fall into “other” classifications baskets at the 8th and 10th digits. Also, any claimant filing manufacturing substitution drawback as the restriction related to “other” baskets does not apply to manufacturing substitution drawback.
Losers – Unused substitution drawback claimants with classifications that begin with “other” at the 8th and 10th digit. Example: Electronics companies with large parts table. On average we have found 30-40% of classifications fall into “other” baskets for companies in this industry. These claimants now must file direct identification drawback at part number level. Direct id has higher regulatory compliance bar.
Status Quo (Mostly) – NAFTA filers on exports to Canada and Mexico. These claimants must continue to file direct id at part number level. One positive for these filers is an expanded retroactive time period to five years from date of import. 19 USC 1313(P) filers. Same as NAFTA filers, retro time period expanded.
Based on above analysis, only those claimants that fall into the “Winner” category or of course those can file under 1313(p) should even consider investigating the trading company.
Is drawback trading a fit for your company? Start by determining the following: