CBP Denies Request to Extend Comment Period on Drawback Proposal; Wine Group Says Analysis 'Flawed'

CBP denied a request from the Distilled Spirits Council for more time to comment on the agency's proposed rules for drawback under the Trade Facilitation and Trade Enforcement Act (see 1808020049). The DSC requested an additional 15 days to comment beyond the current deadline of Sept. 17. "CBP wants to receive your input on the proposed regulations," said Alice Kipel, executive director of CBP's Office of Trade Regulations and Rulings, in the denial. "Unfortunately, CBP is unable to grant your request for additional time, as there is a need to finalize a rule prior to the statutory deadline of February 23, 2019," she said.

The DSC argued that "stakeholders affected by the proposed rule simply need more time to understand and provide robust and helpful comments" on the 444-page document. Kipel responded that "CBP believes the 45-day period strikes a balance between allowing for substantive public comments while ensuring adequate time for CBP to publish a final rule implementing regulations so that claimants such as those you represent may obtain the benefits associated with Modernized Drawback." CBP's proposal would prevent the use of substitution drawback for distilled spirits and other goods subject to excise taxes that are produced in the U.S.

Wine companies have long used substitution drawback and the industry is pushing back on the changes. The proposal's "overview of the U.S. wine industry's history with excise tax drawback and the statutory history that has enabled wine drawback is incomplete," the Wine Institute said in a filing. "Additionally, the economic analysis provided is flawed and unsupported by a comprehensive review of the global wine trade and wine export data."

The group also noted language from the TFTEA conference report that said "the Conferees further clarify that the existing treatment of wine under section 313(j)(2) of the Tariff Act of 1930 is preserved, and that the amendments to the statute do not change this treatment." Congress agreed on the "TFTEA language and prepared the Conference Report with full knowledge of how the drawback program for wine was working," the Wind Institute said. "We believe that Section 190.32(d) as drafted in the NPRM reflects the intent of Congress and urge that the section remain unchanged in the final rule."