Drawback Claimants Still Face Host of Issues, CBP and Industry Officials Say

Despite changes in how CBP processes drawback claims, the process remains difficult and complex for filers and time-consuming for CBP itself, agency and industry officials said during a June 20 panel at the American Association of Exporters and Importers annual conference.

On the positive side, liquidations are being processed faster than new claims are coming in, said Thomas Kendrick, director of CBP's Center of Excellence and Expertise for petroleum, natural gas and minerals. Individual drawback claims have declined by 25% since 2019 but the dollar value of those claims has more than doubled, he said. The complexity of claims has increased and the dollar value is on track to more than double over the last five years, he said.

The backlog of claims currently sits around 50,000, said Brandon Morris, the new branch chief of CBP's revenue and entry division. That number is down from the 60,000 cited in May 2022 by a CBP official (see 2205060051). CBP's move from processing drawback at the ports to the Centers of Excellence has largely been positive, said Dave Corn of Comstock & Theakston. "The teams are not operating on their own fiefdoms anymore." However, CBP still faces a host of issues from staffing to technical limitations with the automated ACE portal.

In theory, fewer claims should mean shorter turnaround times and a streamlined process for both CBP and industry filers. However, a host of technical issues remains with the filing system itself, Corn said. "Drawback is simply not in the 21st century," he said. Although the ACE system has doubled its submission size to 9,999 lines, some users have over one hundred thousand line items in claims. If the system could accommodate that, some users would go from filing 30 claims a month to one per quarter, Corn said. Beyond the line limits, many users are frustrated by file size caps, which prevent more complex drawback requests from being filed as single claims and creates additional work for both filers and CBP.

Staffing for drawback continues to be an issue for CBP. Kendrick said that the backlog is intimidating for new hires, citing an example of a new drawback specialist beginning her job with 1,500 outstanding claims on her desk. That person might be looking for a new job right away, even though it probably took six to nine months of onboarding just to sit down in the first place, Corn said.

Kendrick touted CBP's average claim turnaround being down from 70 days to 58 days this year. Although users have appreciated the increased speed, it is not uncommon for claims to take over a year, Corn said.

Other organizational and technical issues include CBP still operating with paper check payments, which can be misplaced or stolen, Corn said. Kendrick also admitted that the agency has struggled with internal metrics to track how well claims are being processed, and currently has none in place.