Understanding the Three Main Categories of Drawback Returns
When businesses engage in international trade, import duties can significantly impact their bottom line. Fortunately, U.S. Customs and Border Protection (CBP) offers a program called duty drawback, which allows companies to recover a portion of the duties paid on imported goods under specific circumstances. These refunds can make a substantial difference, especially for businesses in industries like automotive, manufacturing, pharmaceuticals, aviation, and retail, amongst many others.
Within duty drawback, CBP offers three main types of drawback returns: unused merchandise, manufacturing, and rejected merchandise. Let’s explore each of these categories of drawback and how Comstock can help you navigate duty recovery and help maximize your refunds with unmatched expertise and strategic solutions.
1. Unused Merchandise
Unused merchandise drawback applies when companies import goods but later export them without using or altering them. For instance, a retailer may import automotive components like headlamps, store them in a distribution facility, and later export them to international buyers without making any modifications. Under these conditions, the business can recover the duties paid on the imported goods.
For unused merchandise claims to be successful, accurate inventory tracking and proper export documentation are essential. Comstock helps businesses streamline this process, ensuring all eligible products are accounted for and claims are filed correctly, so you can maximize your refund.
2. Manufacturing Drawback
Manufacturing drawback is available when imported goods are used in the production of an entirely new product that is subsequently exported. For instance, a pharmaceutical company might import active ingredients, incorporate them into medications, and export those finished products to international markets.
The manufactured products must be exported or destroyed within five years of the original importation without having been used within the United States prior to the exportation or destruction. Comstock specializes in manufacturing drawback and has built a reputation as one of the most trusted names in the industry. Our strategic, multi-layered approach ensures clients recover the maximum allowable refunds while maintaining compliance with CBP regulations.
3. Rejected Merchandise Drawback
Rejected merchandise drawback applies to goods that do not meet the agreed-upon specifications, are defective, were shipped without consent, or were returned from retail. For example, an aviation company might import specialized aircraft components, such as turbine blades, but upon inspection, they find that the blades do not meet the required safety standards or specifications outlined in the purchase contract. If the turbine blades are found to be defective or non-compliant, the aviation company can file for rejected merchandise drawback by either exporting the goods or destroying them. Proper documentation, such as inspection reports and export or destruction records, is required to substantiate the claim and recover the duties paid on the imported goods.
At Comstock, we provide end-to-end support to help businesses navigate these complex requirements, from identifying opportunities to filing claims, ensuring you receive the full refund you’re entitled to.
Why Choose Comstock for Duty Drawback
Navigating the nuances of the different types of drawback returns can be daunting, but partnering with a seasoned expert like Comstock simplifies the process. With over 165 years of experience, we’re unmatched in our ability to help businesses recover duties through expert customs brokerage services, whether you deal in unused, manufacturing, or rejected merchandise drawback. From analyzing your business’s drawback opportunities to filing claims with precision, we’re here to help you maximize your refunds.
Don’t leave money on the table—leverage the expertise of Comstock, one of the most trusted names in drawback since 1856, to ensure your claims are handled effectively and efficiently. Contact us today!
