Direct Identification Drawback

Direct Identification Drawback is a type of duty drawback that allows importers and manufacturers to apply for a rebate of up to 99% of import duties, taxes, and fees on imported merchandise and components that are then exported for sale without being used domestically.

What sets Direct Identification Drawback aside from other types of duty drawback is that the exported merchandise/components must be traced back to their importation for claimants to apply.

How Does Direct Identification Drawback Work?

There are three methods in which to identify a duty-paid import for drawback purposes.

The first is called Unused Merchandise Direct Identification, which is done by tracing unused merchandise that has not been significantly altered through its lot number or serial number as recorded in the import documentation.

The second method is called Manufacturing Direct Identification, in which a component used in manufacturing a finished export product is traced through its lot number or serial number.

The third method involves the direct identification of merchandise or components through an accepted alternative accounting method, such as FIFO (first-in, first-out) or LIFO (last-in, first-out). These alternative accounting methods are useful when lot or serial numbers in the first two methods cannot be found, providing a pathway for claimants to still apply for the drawback.