More Work to Be Done in Trimming Drawback Claim Liquidation Time Frames, CBP Officials Say

TUCSON, Arizona -- CBP has made strides in improving its liquidation time frames for drawback claims, but the agency still has a hefty “inventory” of claims and could benefit from some ACE programming changes to make further progress, said Janelle Cray, chief of CBP’s drawback and revenue branch, at the National Customs Brokers & Forwarders Association of America annual conference on May 4.

Referring to what others have called a backlog, Cray said CBP’s inventory currently sits at 60,000 claims. But the agency has in recent years quickened its pace of liquidations, more than doubling the number from fiscal year 2020 to fiscal year 2021, she said. That was due in large part to shifting around personnel to work on drawback liquidation. “The fact that we were able to double liquidations in a fiscal year is something that we’re really proud of,” Cray said.

CBP is mindful that it could improve more, Cray said. “Right now, the liquidation process for drawback specialists is a very long process,” she said. “They have to do a lot of clicks. They have a lot of checks they have to do.”

One action CBP can take to increase liquidation speeds is to implement a mass liquidation functionality, Cray said. “If we had the functionality to do mass liquidations, it would help tremendously,” she said. Specialists could take 100 claims at a time and “click a button if they meet all the criteria,” sending them straight to liquidation. “That is what we’re working to get, just with the hope that, with the numbers that we have, we give [specialists] the tools they need to be able to process as much as they can to keep up with the claims that are coming in,” she said. “I'm really hoping that we can get it done in the near future.”

Another is to link CBP’s electronic export manifest with its drawback program. “We’ve been in conversations with Jim Swanson’s crew on the export manifest and making sure that they have the functionality in there that will assist with the [drawback program], and those are ongoing discussions for us,” Cray said. Swanson is director of the cargo and security controls division, for cargo and conveyance security in the CBP Office of Field Operations.

The link will resolve issues with fact and date of export, said Dave Corn of Comstock & Theakston, who spoke on the same panel discussion. “It will allow for the drawback specialists to not need to utilize that in any desk review or audit. It will already be there in the manifest,” he said. “So that’s going to save some time, and it will make things more efficient, both for the trade and for CBP.”

A major factor behind the buildup of unliquidated claims is the file size limits that came along with the transition from paper to ACE, Corn said. “It's at 9,999 lines so thankfully is bigger” than the initial 5,000 lines when drawback was initially deployed, “but we still have some limitations on what we can file,” Corn said. We have a claimant who used to file one claim a year, now they file 25 a month. So now they have 300 claims for the year. There's additional processing, additional time that has to happen on our side,” he said. Then the drawback specialists “now have 300 more claims they have to look at and liquidate.”

Adding to the problem, large claims with close to 10,000 lines often time out when submitted, Corn said. “Sometimes claims are chopped down a little bit just to get him through. In doing so, you’ve created more claims,” he said.

An expansion of the file size limit does not to appear to be in the near future. “We will definitely keep your suggestions in mind. But for right now, it's where we are, unfortunately,” said Acenitha Kennedy, branch chief of CBP’s account management, entry summary, accounts and revenue product division.

One capability that is coming soon is the acceptance of claims that have informal entries and informal merchandise processing fees associated with them, Kennedy said. “We haven't put out the announcement yet,” she said. “We have a few more tweaks that we need to make to the system and once we do that, we will be putting out the corresponding CSMS message out there,” she said.