United States-Mexico-Canada Agreement is fully in effect as of last week, and a host of changes to Customs processes in all three countries are in place. One area of particular concern to many of our clients has been how drawback is affected or changed by this agreement.

Under the USMCA, much of the pre-existing structure of drawback has been preserved. The necessity to follow rules necessitating all exports to Canada and Mexico be claimed using direct-identification methods remain in place.

In the immediate implementation phase, Customs has requested claimants to hold off on filing any claims on imports and exports that happened after the initial implementation date. Claims of products that were moved prior to July 1st, 2020, can go along as normal, but Customs is seeking some time to finalize their implementation before new claims against USCMA shipments are filed.

At this time Customs is also requiring that for future claims that imports that took place under the NAFTA agreement and those under USMCA are not commingled in the same claim. The import date will determine which agreement controls a particular entry, and so claims under NAFTA imports can continue to be filed until the 5-year window passes.

Under these new rules, trade between the three signatory nations should continue to increase. Importers and exporters can look forward to continued returns through the drawback program, as all products eligible remain so under the new agreements.

If you’d like to discuss your company’s potential to claim drawback through NAFTA, USMCA, or otherwise, please contact us at  www.jmrodgers.com

Sincerely,

James Rodgers CEO