Global suppliers, importers, exporters and distributors of chemicals, minerals, and raw materials.
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.
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.
JMR discovered approximately well over $3 million in refunds that nether importer nor exporter ever expected to realize.