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Overview from start to end of the US duty drawback process
Duty drawback is a refund of up to 99% of import duties and fees upon exportation or destruction. The program is run by U.S. Customs and Border Protection (CBP). Putting it simply, if goods are imported into the US, duties, duties, tariffs, and taxes are paid on importation of those goods. If those goods are later export or destroyed you can file for a refund of the taxes that were paid on import. Even if only some of the imported goods are exported, or those imported goods are used to "manufacture" a product that is later exported, you can still claim these refunds.
There are many different types drawbacks. Here are some of the most common ones along with examples.
Companies import a good and then exports the good in the same condition.
Example:
An apparel company imports 10,000 shirts from Vietnam, pays 10% duties then stores them in a warehouse. Half the shirts are sold in the U.S. but half are eventually exported to customers in Canada and Europe. You can claim a drawback on the duties paid for all the exported shirts.
Companies import a good, uses that good to produce another product, and then later exports that product
Example:
A automotive manufacturer imports thousands of fasteners, pays 15% duties then stores uses those fasteners overtime to build a car. Each car uses a 100 of these fasteners in assembling a car and then later exports the car to China. For every car that is then exported you can claim duty drawback for all the fasteners used in assembling the car.
Companies import a good, never use the good, and then ends up destroying them instead.
Example:
A makeup company imports their products from South Korea, pays duties then stores them in their warehouse. Over the course of year they sell most but not all of the products. At the end of the year the left over product expire so they can no longer be sold so instead the makeup company destroys what is left over.
Companies import a good, never use the good, and then ends up destroying them instead.
Example:
A makeup company imports their products from South Korea, pays duties then stores them in their warehouse. Over the course of year they sell most but not all of the products. At the end of the year the left over product expire so they can no longer be sold so instead the makeup company destroys what is left over.
The below documents are commonly what is collected for a duty drawback program. Different situations may require slightly different documents sets.