INDUSTRY WANTS FASTER APPROVALS FOR SUBSTITUTE DRAWBACK
The U.S. drawback industry wants to reform the process by which Customs approves substitution for drawback by allowing it to bypass the agency’s Office of Regulations and Rulings in the process.
Drawback is a refund of duties paid on imported materials which are either re-exported or used in the manufacture of export shipments. Substitution allows manufacturers to use either all imported or all domestic materials, or a combination thereof, in their products eligible for drawback.
“To get approval today takes 10 months to a year,” said Edwin Van Ek, president of C.J. Holt & Co. in New Jersey and head of the American Association of Exporters and Importers’ drawback committee. “This puts an undue burden on companies trying to recover duties paid.”
Industry officials say they’re aware of the Office of Regulations and Rulings’ staffing and resource concerns. To help remedy the problem, AAEI and the National Customs Brokers and Forwarders Association of America have proposed regulatory changes that would allow the industry to use “reasonable care” to “self-certify” their goods for manufacturing substitution and request approvals through one of eight Customs drawback centers around the country.
“We think the approvals would be turned around in 30 to 60 days under this method,” Van Ek said. Customs would retain the right to audit these records for compliance.
The groups said the proposed changes do not preclude companies from seeking binding rulings from the Office of Regulations and Rulings if they aren’t comfortable with self-certification of their manufacturing substitution.