I Think I Qualify for Duty Drawback…How Do I Get Started? – 6/18/25

Andrew Galloway introduces the webinar on duty drawback, explaining how businesses can unlock significant savings through this process. He outlines the agenda, which includes determining eligibility, choosing the right drawback program, data management, and filing for accelerated payment. Andrew emphasizes the importance of understanding a company’s supply chain and the types of duties paid to determine drawback eligibility. He notes that while drawback can be a slow process, it begins with assessing import sources, export destinations, and whether manufacturing occurs in the US.

Sean explains the different types of duty drawback programs available. The two main categories are unused drawback and manufacturing drawback. Unused drawback applies to products imported and exported without substantial transformation, while manufacturing drawback is for imported components used in domestic manufacturing processes. Sean also mentions rejected merchandise drawback and drawback for destroyed goods, noting that the latter requires following specific customs procedures. He emphasizes that most drawback programs fall under either unused or manufacturing categories.

Sean explains the differences between unused drawback under direct identification and unused substitution drawback, detailing the data and documentation requirements for each. He notes that unused substitution is limited to certain HTS codes and cannot be used for exports to Canada, Mexico, or Chile. Sean then describes manufacturing drawback, including direct identification and substitution methods. Andrew adds that while there are many types of drawback, 90-95% of their clientele fall within the three main categories discussed. Sean emphasizes the importance of understanding one’s supply chain to determine which drawback type is applicable, likening drawback programs to unique snowflakes due to the intricacies of each supply chain.

Sean outlines the six steps to establishing a drawback program, focusing on program design and identifying the proper drawback type. He emphasizes the importance of analyzing the supply chain, understanding duty exposure, and determining how products are exported or used in manufacturing. Sean explains that data requirements and documentation needs are crucial for building compliant claims and maximizing refund opportunities. He discusses the process of working with clients to assess data capabilities, potentially involving third-party resources. Sean also highlights the importance of documentation retention and internal SOPs to support drawback claims during customs reviews. Finally, he mentions the use of ACE data for analyzing potential refund opportunities and the need to adapt the approach based on different drawback types and supply chain complexities.

Sean explains the process of initiating a drawback program with customs. He outlines the necessary applications for different drawback types, including unused and manufacturing drawback. For unused drawback, a single application covers three privileges: waiver of prior notice for future exports, a one-time waiver for past exports, and accelerated payment. For manufacturing drawback, two separate applications are required: a manufacturer ruling and an accelerated payment application. Sean emphasizes that once approved, these applications enable refunds to be paid within 4 to 6 weeks of claim submission, which is crucial for executive teams’ financial planning.

Andrew discusses the company’s approach to duty drawback, emphasizing the importance of a thorough initial assessment before quoting or contracting. He explains that this process helps ensure clients can support a drawback program and understand the resources needed. Andrew then highlights recent client success stories, particularly among mid-sized manufacturing companies affected by new tariffs. He suggests that tariffs are likely to persist and encourages potential clients to explore drawback opportunities. Finally, Andrew outlines J.M. Rodgers’ expertise in drawback, mentioning their experienced team, proprietary software, and focus on customer service and compliance.

Sean and Andrew discuss the process of estimating potential duty drawback refunds for clients. They explain that JMR can analyze a company’s import and export data to provide a high-level estimate of potential savings, which can help determine if pursuing drawback is worthwhile. They also address questions about the waiver of rights process for manufacturing drawback and supply chain drawback scenarios involving third parties. The speakers emphasize the importance of timing between imports and exports, noting that exports must occur after imports and claims can go back 5 years. They also discuss strategies for obtaining necessary information when a company is not the importer of record, highlighting the need for cooperation from domestic suppliers.