Our Drawback Services.

Alliance Drawback Services takes full responsibility for the drawback process from the initial implementation of the program to the filing of drawback claims. The first step in the drawback process requires that we conduct a thorough evaluation to quantify the recovery potential and assess the resources required to prepare claims and manage the program.

Below are the services Alliance performs throughout the drawback process.

Alliance ⭣ Services

Drawback Program Assessment

Assessment and Recommendations: Alliance will conduct preliminary no cost/ no obligation assessment of a company’s potential drawback program and make recommendations regarding program viability as well as strategies for maximizing recoveries.

The initial evaluation allows a potential client the opportunity to “test drive” Alliance’s services before making a full commitment to engage.

Also, Alliance gathers key information and data to provide the potential client an estimated refund amount for both past 5 years as well as moving forward.

Fee Proposal: With estimate in hand in addition to assessing the administrative resources required to prepare and file drawback claims, Alliance can then submit a specific fee proposal for consideration.

Key Assessment Objectives:

  • Gain an understanding of potential client’s business operations and logistics business model related to import/export transactions.

  • Gather historical import duty paid information by running reports from Customs and Border Protection’s ACE (Automated Commercial Environment) system. Alliance’s staff can help you establish an ACE account and walk you through generating the specific reporting required.

  • Generate “test” drawback claims to estimate a company’s potential refund.
  • Determine the availability and integrity of electronic data to automate the generation of import and export data needed prepare drawback submissions.
  • Evaluate record retention procedures with particular-attention to substantiating export transactions.
  • Review of existing record retention systems and substantiating documentation to determine ability to comply with CPB regulatory requirements.
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Drawback Claim Automation & Analytics

Systems Skills: Alliance’s advanced systems expertise sets us apart from the competition. All Alliance desk level drawback analysts possess superior business applications and systems skills.

Potential employees are tested extensively in Excel and Access during employment screening. Drawback Analysts validate and convert data files, prepare specialized client reporting in Excel, and use analytics of maximize drawback recovery.

Specialized Drawback Software: For duty drawback claim preparation, using an automated drawback software application is the most basic requirement for a drawback service provider.

Limited off the shelf programs only provide rudimentary claims processing, reporting, and automated submission of claims to Customs. Our specialized Excel Access based tools allow us to adjust import data due to import reconciliation programs (adjustments due to NAFTA, Value, HTS recon as an example) any post entry adjustments to duty paid, and even prior disclosures based on statistical sampling methodologies. The ability to properly adjust import data insures accurate and compliant drawback claim preparation and avoids potential issues with US Customs.

Further, Alliance developed proprietary data validation applications to allows us to identify data integrity issues with electronic files or identify data entry errors for large required manual keying projects.

Manual Data Entry Capabilities: Additionally, Alliance specializes high import/export transaction volume accounts (retail and electronics as examples). In some instances, these clients require the manual processing of millions of import records in order to capture part number level detail. Alliance can scan import files to our secure cloud based record retention system. These PDF files are then accessed by our oversees data entry team in the cloud to manually key the required data elements.

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Regulatory Compliance Services

Regulatory Compliance: With over 450 pages of regulations specific to the drawback program found in Customs Regulations 19 CFR part 190, maneuvering through the drawback process compliantly can be a daunting endeavor. Alliances assumes full responsibility for the regulatory compliance requirements of a client’s drawback program.

Alliances team will initially assess a claimant’s ability to comply with the various legal and regulatory provisions specific to a company’s drawback program.

For Example: The NAFTA trade agreement placed a set of specialized requirements on companies that file drawback on exports to Canada and Mexico.

Alliance is versed in the specific requirements of NAFTA drawback in addition to those of more standard drawback provisions on exports to countries outside of North America.

Our understanding of the complex regulatory requirements of drawback allows us to:

  • Serve as your liaison with Customs and Border Protection’s drawback personnel assigned to your account.
  • Assess your existing record retention practices and make recommendations to enhance practices and procedures.
  • Properly establish your program with Customs by securing any required filing privileges and Customs rulings if required.
  • Manage any Customs review or audit of drawback claims and supporting records.
  • Accurately and compliantly prepare drawback claims using specialized drawback process software.
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Documentation & Data Management

New Details on Documentation & Data Management will arrive shortly.

Drawback Program Management

Alliance takes full responsibility for the implementation and on-going management of a client’s drawback program including the following functions –

Develop Program Procedures: To ensure regulatory compliance, and to maintain the timely filing of drawback claims, we will develop comprehensive standard operating procedures that address the following general areas:

  • Documents and data needed to prepare and file claims – To capture the needed documents, we typically employ a variety of methods including: automated collection of data from import brokers; securing copies of needed import/export documents from brokers and forwarders, data downloads directly from the client, and scanning documents on site if required.
  • Claim filing procedures, frequency, and related drawback specific reporting.
  • Drawback record retention.
  • General information related to the claimant’s business practices and processes.
  • Frequency and objectives for periodic compliance reviews.
  • Procedures for the tracking of drawback claims from filing to payment, and finally through final liquidation (Customs review) of the drawback claim.

Review Existing Record Retention: We will review the types of records routinely required to substantiate claims during a Customs review.

Alliances prepare for Customs reviews (either desk reviews, compliance assessments, or complete audits) through continual testing of data integrity and supporting records, and through annual internal compliance reviews.

As part of the implementation process for each drawback program, Alliance evaluates the veracity of existing record retention systems, and will make recommendations as to how to improve retention procedures to mirror best industry practices.

Program Start-up: As part of the initial program implementation process, we gather information about our client’s specific business operations and its enterprise management systems.

This knowledge us design a compliant drawback program, identify other potential drawback opportunities, as well as establish client’s drawback program with Customs.

Customs Drawback Privilege Applications: Alliance will draft Customs one-time applications for accelerated payment, waiver of prior notice, and draft a manufacturing ruling request if applicable needed to set up a drawback program with Customs.

To prepare these applications, we will need to gather a variety of company information and sample documentation for our client’s drawback program.

Drawback Claim Preparation and Electronic Submission: Alliance staff will utilize its specialized drawback processing software to prepare drawback claims including electronic data elements needed for submission to Customs and Border Protection via the ACE (Automated Commercial Environment) system.

Electronic filing via ACE expedites the payment of drawback claims to Alliance clients.

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Multiple Party Drawback: Trading Services

Definition of Drawback Trading: Matching the excess import and export activity through the use of a third party special purpose entity that exists for the sole purpose of maximizing drawback recovery between currently unrelated importers and exporters with no existing commercial relationship.

Example: Company A imports frozen concentrated orange juice from Brazil that is sold domestically in US. Company B exports domestically produced California OJ to Europe. The importer and exporter have no existing commercial relationship. To compliantly claim drawback (since one cannot sell drawback credits to unrelated parties), we must run the import and export transactions through a third legal entity that inserts itself into the import and export supply chain by temporarily buying the product so that it can make entry into the US on import side and serve as the exporter or record on the export side. In addition to maintaining confidentiality between the various parties, the trading company would also serve as the drawback claimant. While a point of negotiation, historical arrangements divided the recovery equally between the parties.

The trading model was made possible with the modification of the “p” section of the drawback law found in 19 USC 1313(p) that allows for 8 digit HTS level drawback substitution on specified list of petroleum and chemical derivatives. Note that the petroleum industry plowed the legal ground in the form of a Customs ruling issued in 2004 that affirmed this exact type of arrangement.

Until the passage of drawback simplification legislation included in the Trade Facilitation and Enforcement Act of 2015 (TFTEA) that elevated substitution to the Harmonized Tariff Classification for the other drawback provisions, drawback trading was not an option for non-petrochemical drawback claimants due to the tighter import/export matching requirements for non “p” qualifying products… in others words, the petrochemicals companies developed their own playing field while the rest of the drawback world matched import and exports at the part number level or product specification level.

To determine if your company can benefit from drawback trading, one must first understand the key changes to the substitution rules that resulted in a very distinct set of TFTEA drawback winners and losers:

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:

  • Do you fall into the “winner” category described above? If the answer is no, then stop here.
  • If yes, following the submission of any internal drawback, does your company have excess unclaimed import or export activity that would equate to at least $500K in additional annual drawback recovery? Why $500K? Due to the additional administrative effort needed to execute the required commercial transactions between the various entities, and the fact that the recovery is split between 3 parties. If you answer yes, then continue.
  • Next step is for Alliance to conduct a thorough “data-mining” exercise to determine is there is sufficient matching volume and to identify potential sharing partners. If market conditions look favorable, then move on to next step.
  • Assuming the basis exists for a viable program as outlined herein, then management must decide if it’s willing to insert the 3rd party trading company into its supply chain and potentially share recovery with a competitor. Please note that executing the needed documentation should not materially disrupt the supply chain. Importers/exporters can continue using same logistics vendors and the timing of imports or exports should not be affected.
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