Brokerage Pushes for Bill to Allow Drawback for FTZ Imports Withdrawn for Direct Export

Customs brokerage Thomas Ferramosca Associates recently sent a letter to House lawmakers calling for legislation to allow firms to claim drawback on duty-liable imported goods withdrawn from foreign-trade zones for direct export. In a July 18 letter to Ways and Means Chairman Kevin Brady, R-Texas, and to the congressman representing the Staten Island, New York, brokerage’s district, Rep. Dan Donovan (R), Tom Ferramosca Jr. said that allowing for direct export qualifications could be an “enticement” for companies to produce and export more from the U.S., in part because “the more that’s exported, the more that can be claimed against merchandise sold in the U.S. with potential duty liability.” If allowed drawback benefits, FTZ goods classified as “privileged foreign” or “non-privileged foreign” provide “the greatest opportunities” to boost U.S. manufacturing, expand exports and stimulate job growth, the letter says.

Goods must be “regularly entered” for consumption to receive drawback benefits. CBP generally interprets “regularly entered” to mean all duties, taxes and fees were paid on imported or exported goods. CBP’s interpretation stemming from an approximately 20-year-old case “may have been one of those silent factors leading to more and more job loss,” Ferramosca wrote.

Arguments that the proposal resembles a form of FTZ “double-dipping” in tax benefits are “nonsensical” because goods entered duty-free from Generalized System of Preferences countries qualify for drawback if claimed against dutiable merchandise from other countries, Ferramosca said in the letter. Goods produced elsewhere and sold in other foreign markets generally bypass the U.S., bringing no economic benefit to the economy, and goods usually skip the U.S. except for those intended for sale here, Ferramosca wrote. “We think it would … be beneficial to put forward some narrower targeted proposals where both Democrats and Republicans could find common ground to stimulate job growth and expand exports,” he said in the letter to Brady. “We understand that the subject we’re presenting is in a specialized area so we welcome questions that would give us an opportunity to elaborate on the proposal.”

Email ITTNews@warren-news.com for a copy of Thomas Ferramosca's submission to Congress.