Duty Drawback Sharing

Case Study

J.M. Rodgers uncovered over 3 million dollars in refunds for two companies in the chemical, mineral, and raw materials industry.

Client

Global suppliers, importers, exporters and distributors of chemicals, minerals, and raw materials.

Challenge

Two companies—one mostly an importer, the other mostly an exporter—moved similar products but did not qualify for much drawback return on their own shipments.

Solution

Under the provisions in the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA), we now have the ability to match tariff codes on an 8-digit level for drawback purposes. Based on this law, using our drawback trading concept, we can match imports from one company with the exports of another, even if they do not have a previous commercial relationship prior to working together with JMR. Under TFTEA, the rules for matching imports to exports has changed from “Commercially Interchangeable”, which is a very high standard to meet, to interchangeability based upon classification under common tariff subheadings, which is a much easier test to meet. We identified an export client whose products matched the 8-digit HTS classification of the excess imports of our import client. Independently, both companies had very limited potential for drawback. We analyzed each party’s excess imports and exports to identify those that could, under a properly structured arrangement, qualify for drawback.

In order to make a drawback claim, it was necessary to establish a commercial relationship between the two companies with agreed upon transactions. Employing Customs rules around a drawback trading concept, we were able to establish the required commercial relationship between the import rich company and export rich company’s transactions so that we could file the drawback claims resulting from their combined transactions.

Results

JMR discovered approximately well over $3 million in refunds that nether importer nor exporter ever expected to realize.

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A Tradition of Excellence

J.M. Rodgers Co., Inc. is a family-owned and operated business with a rich tradition of serving and providing unparalleled support to our valued customers. In operation since 1952, J.M. Rodgers Co., Inc. is a recognized leader in global logistics specializing in Customs Brokerage, Freight Forwarding, and Duty Drawback.

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Find Out If You Qualify For Duty Drawback

 If you or your business imports and export goods to and from the United States, it’s possible that  you may qualify for duty drawback, which is a 99% refund on goods imported into the United States that are subsequently exported. Even if you don’t do both, you may still be able to qualify as long as importing and exporting happen along your supply chain.