US Customs and Border Protection (CBP) published a final rule announcing regulatory changes to duty drawback that are part of the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA). The Modernized Drawback Final Rule includes several changes, including liberalizing merchandise substitution standards, recordkeeping requirements, and drawback for excise tax. Most of the final rule changes, except for excise tax drawback, were effective December 17, 2018.

The final rule addresses substitution drawback for excise taxes. “The statute does not prevent substitution drawback, but it does prevent claiming two drawbacks of excise tax, one on the export and one on the import, on the basis of a single export,” CBP said. The new rules regarding excise tax drawback will take effect February 19, 2019.

It does not include eliminating limits on “mixed claims,” as was originally provided for in the proposed rule. “Mixed claims” involve substitution-based drawback for imports “associated with an entry summary where the entry summary had previously been designated as the basis of a claim under the old law” (i.e., pre-TFTEA).

Additionally, CBP released information on processing accelerated payments of TFTEA drawback claims. For more information about duty drawback, please send an email to Deringer’s Drawback Department.