Savings Under TFTEA Via Drawback Trading

Case Study

JMR discovered over a million dollars in refunds under TFTEA that neither importer nor exporter had expected to realize.

Client

Global supplier, importer, exporter, and distributor of chemicals, minerals, and raw materials.

Challenge

An existing customer (Client 1) had substantial imports but minimal exports upon which to claim drawback.

    Solution

    Under the provisions in the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA), we now can 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 Client 1 with exports from Client 2, even if they don’t have an existing commercial relationship.

    Under TFTEA, the rules for matching imports to exports have changed from “Commercially Interchangeable,” a very high standard to meet, to interchangeability based upon classification under common tariff subheadings, which is a much easier test to complete.

    We identified another customer (Client 2) who had excess exports, which, under the new TFTEA interchangeability rules, could be matched up with the excess imports of Client 1. We then analyzed each party’s excess imports and exports inventory to identify those that could qualify for drawbacks under an adequately structured arrangement.

    We fully appreciate that importers and exporters guard their commercial transaction details zealously. Therefore, it is our practice to obtain NDAs that give us the necessary access but protect each party from the disclosure of their details to the other. Our NDAs only permit disclosure when a Customs inquiry requires it under pre-established rules and as vetted by our trade counsel.

    Establishing a commercial relationship, which can be pre-existing or created, is necessary to make a drawback claim. Therefore, employing a drawback trading concept, we demonstrated the required commercial relationship between the import rich company (Client 1) and export rich company’s (Client 2) transactions so that we could file the drawback claims resulting from their combined transactions.

    Results

    JMR discovered over a million dollars in refunds that neither importer nor exporter had expected to realize. JMR is in a unique position as the only A-to-Z drawback provider able to facilitate this kind of trading scenario under TFTEA, giving customers access to drawback refunds that their transactions histories hadn’t identified.

     

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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.