Duty drawback
Discover duty drawback in international trade: learn how businesses can reclaim customs duties, taxes, and fees on imported merchandise that is later exported.
Sarah Dotson
What is Duty Drawback?
Duty drawback is a customs program that allows importers to reclaim up to 99% of customs duties, certain fees, and internal revenue taxes paid on imported merchandise that is later exported or destroyed. This program serves as a vital tool for international trade, helping businesses maintain competitive pricing in global markets.
How Duty Drawback Programs Work
The duty drawback process involves carefully tracking imported goods and their subsequent exportation or destruction. Companies must maintain detailed records and submit proper documentation to customs authorities to claim their refunds.
Types of Duty Drawback Claims
Manufacturing Drawback
Applies to imported materials used in manufacturing products that are later exported.
Unused Merchandise Drawback
Available for imported goods that are exported in the same condition without being used in the U.S.
Duty Drawback Benefits
This customs program offers significant advantages to international traders:
- Improved cash flow through duty refunds
- Enhanced competitive pricing capability
- Reduced overall import/export costs
- Support for domestic manufacturing
Modern Duty Drawback Practices
Recent modernization efforts have streamlined the drawback process through:
- Electronic filing systems
- Simplified documentation requirements
- Advanced tracking technologies
- Automated validation processes
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