BALTIMORE -- There has been a long wait for details on how drawback will work under the Trade Facilitation and Trade Enforcement Act, but Dave Corn, vice president of Comstock and Theakston, said things are going to be moving in the next month. The Office of Management and Budget is required to send the proposed rule back to CBP by July 5, and Corn said he expects CBP to release a proposed rule notification a week or two after OMB acts. A lawsuit on whether CBP's action to change accelerated payment practices was outside its authority for interim guidance should also be resolved within a few weeks, he said while speaking at the American Association of Exporters and Importers annual conference on June 8.
Drawback
A duty drawback is a refund by CBP of the duties, taxes, or fees paid on imported goods, which were imposed upon importation as prescribed in 19 U.S.C. 1313(d). More broadly, a drawback also includes the refund or remission of other excise taxes pursuant to other provisions of law.
It's not clear that the president's authorities under Section 232 allow for the elimination of drawback, law firm Neville Peterson said in a blog post. President Donald Trump said in April that drawback would not be allowed for entries subject to the Section 232 tariffs (see 1804300064). "While this is a close question, the President’s power under Section 232 is limited to 'adjust[ing] imports,'” the law firm said. "It seems unlikely that the President can take action respecting exports, the activity which generally triggers claims for duty drawback."
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CBP is looking into the possibility that a final rule for drawback won't be in effect by the statutorily required date, said Randy Mitchell, director of CBP’s Commercial Operations, Revenue and Entry Division, during a May 24 webinar hosted by Integration Point. "Everything concerning the [Notice of Proposed Rulemaking] and the effective final rule is very tentative," he said. "We know that we have a congressional mandate of February 2019 to implement the drawback, the new law for drawback. But what happens if we don't have that effective final rule there, and we don't know right now and we've been discussing that with our lawyers."
CBP provided further details on how importers of goods excluded from Section 232 tariffs on steel and aluminum can file entries and receive refunds, in a May 21 CSMS message. "Importers and filers importing products granted an exclusion should submit the product exclusion number based on the last six digits of the product exclusion docket number," CBP said. Filers should not "submit the corresponding Chapter 99 HTS number for the Section 232 duties when the product exclusion number is submitted," the agency said.
More than 1,000 of the 1,300 tariff lines on the list of products that could be affected by Section 301 tariffs would impact General Electric's operations, but the company is asking for just 34 items to be removed from the list. On May 16, during the second day of the International Trade Commission's public hearing to help it refine the list of products subject to 25 percent tariffs, Karan Bhatia, who leads GE's government affairs and policy office, suggested the committee exclude intra-company inputs from owned and controlled Chinese factories because those don't involve forced technology transfer, something the Section 301 tariffs are meant to address. He suggested items that have high U.S. content by value that come from China also should be excluded.
CBP released a new version of its ACE Entry Summary business rules and processes document with changes to most sections. Version 9.0 includes major revisions to the entire document, including completely rewritten sections on entry summary transmission, record creation, cancellation, manual entry summaries and notifications, according to the change log. Other sections with significant changes include revisions to sections on liquidation, reconciliation and drawback to reflect recently implemented changes to reflect new processes under ACE post-release deployments and the Trade Facilitation and Trade Enforcement Act of 2015.
The Treasury Department published its spring 2018 regulatory agenda for CBP. The agenda includes two new rulemakings, one involving the prohibition on imports made through forced labor and another on intellectual property rights. The forced labor proposal, expected by August, would "would generally bring the forced labor regulations and detention procedures into alignment with other statutes, regulations and procedures that apply to the enforcement of restrictions against other types of prohibited merchandise," it said. The IPR rulemaking, expected by August, would "create a procedure for the disclosure of information otherwise protected by the Trade Secrets Act to a trademark owner when merchandise bearing suspected counterfeit trademarks has been voluntarily abandoned."
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RANCHO MIRAGE, Calif. -- The elimination of drawback availability on entries subject to Section 232 tariffs in most the recent presidential proclamations (see 1804300064) applies retroactively to the March 23 effective date of the tariffs, said John Leonard, executive director-trade policy and programs at CBP, during a May 2 interview at the National Customs Brokers & Forwarders Association of America's annual conference. The new language about drawback raised some questions about how it was applied (see 1805010027). The drawback issue had "been an open question" and something "we needed direction on," he said. Between the first proclamation and the most recent proclamation, "CBP pointedly made sure we tried to get as many technical questions as possible answered," Leonard said. "We expect our quota module to be ready pretty soon to be able to handle absolute quotas, which we haven't for many years."