CBP's Proposed Treatment of Mixed-Use Drawback Claims Expected to Face Litigation

CBP's proposed restrictions on claiming substitution drawback under the Trade Facilitation and Trade Enforcement Act on claims made under the old law is expected to face litigation if the rules are finalized, said Dawn Olesky, vice president of drawback operations at STTAS. Olesky spoke on an Oct. 11 webinar hosted by UPS, which owns STTAS. The proposed rules (see 1808020049) don't allow for TFTEA substitution drawback on goods associated with an entry summary that was designated as filed under the previous law.

That means "if you want to file a claim for import entry line number, but that entry was designated on a claim for the old law, customs is actually eliminating that right because they have this mixed-use rule," she said. Olesky said she "can actually probably guarantee it will end up in court because Customs is actually eliminating a drawback claimant's rights to claim against that entry because they're not making it available for TFTEA substitution drawback if you've ever claimed that entry under the old law. The reason is under the old law, everything was an invoice-based calculation, and for TFTEA substitution it's a per unit average calculation." Michael Cerny, a lawyer with Sandler Travis, said on the webinar that litigation over the elimination of excise duty drawback also seems likely (see 1809190005).