The beginning of 2014 marks the third step of the planned phase-out of drawback on exportations to Chile. Drawback claimants need to make adjustments to their drawback claims to keep in compliance with the Chile Free Trade Agreement (FTA) that went into force on January 2004. In addition to reducing or eliminating most tariffs and quotas for goods passing between the U.S. and Chile, this Agreement also contained provisions for reducing the drawback that could be refunded on exports to Chile.
According to this FTA, duty drawback on exportations to Chile will gradually be phased out on Manufacturing claims under 1313(a) and 1313(b), Substitution Unused Merchandise claims under 1313(j)(2), Substitution Petroleum Derivatives claims under 1313(p), and Packaging Material claims under 1313(q). The phase-out in drawback is as follows:
- Exportations from Jan 1, 2012 – Dec. 31, 2012 are reduced to 75% of eligible drawback
- Exportations from Jan 1, 2013 – Dec. 31, 2013 are reduced to 50% of eligible drawback
- Exportations from Jan 1, 2014 – Dec. 31, 2014 are reduced to 25% of eligible drawback
- Exportations on or after Jan 1, 2015 are reduced to zero drawback
Please note that Unused Merchandise Direct Identification claims under 1313(j)(1) remain eligible for full drawback and are not subject to the drawback reductions in the FTA.
Claims involving exports to Chile must be submitted separately, and must be clearly labeled “Chile FTA”. The claim calculation worksheet must show both the full amount of duties and/or fees eligible to be claimed, and the actual amount of duties and fees being claimed after the reduction.
We will be taking all of these provisions into account when preparing and filing drawback claims on your behalf. Please contact us if you have any questions regarding how this will affect your drawback program. (Source: CSMS #12-000546)
