The Trade Facilitation and Trade Enforcement Act of 2015 (i.e. TFTEA) was passed into law, signed by President Barack Obama on February 24, 2016 and will become effective on February 24, 2018. As a result of this New Duty Drawback Law, there will be many regulatory drawback changes. For instance, the duty drawback time frames will be dramatically changed from what they are today.
Presently, the Drawback Time Frame for Unused Drawback is as shown below. These time frames allow for a total of six years from import to filing a drawback claim. However, this time frame only allows a maximum of three years from import to export and a maximum of three years from export to filing a drawback claim.
Currently the Drawback Time Frame for Manufacturing Drawback is as shown below. These time frames allow for a maximum of five years from the import of a component to the date that the manufactured product is exported and then another three years from export to filing a drawback claim. This time frame allows for a potential total of eight years from import to filing a drawback claim. However, the drawback claimant must be sure that there is no more than three years from the date they receive the import to the date the product is produced. In addition, they must be sure that there is no more than three years from the date they receive the import to the date that that import was used in a manufacturing process.
Under the New Duty Drawback Law, there are huge changes to the Drawback Time Frame for both unused and manufacturing drawback. The drawback time frame is greatly simplified as shown below. It is simply five years from the importation of merchandise to filing a drawback claim. If there is a manufacturing process, that process must be done within the 5 years. In addition, the goods exported must also occur within that same 5 year time frame. One major advantage for the drawback claimant is that now they can claim on exports that are almost five years old rather than three years per the current regulatory drawback time frames.
Please return to our website in the next few weeks for additional updates on the changes to duty drawback due to the New Drawback Law.