The surety company that posts the required bond for accelerated drawback claims has a right to protest a denial of the claims, said CBP in a April 17 ruling. The surety, Washington International Insurance, protested the denial of accelerated drawback claims filed by SFE Citrus Processors in 1998 and 1999 that were eventually liquidated without drawback in 2004. The claims were for imported "concentrated orange juice for manufacturing" that the importer claimed was exported with added "essential oils and essences," creating a new article for drawback purposes. The further review of protest, ruling HQ W231539, also examined whether the regulations allow for a change in the basis of for the drawback claim.
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.
Correction: The discussion of CBP's drawback program at the American Association of Exporters and Imports conference was on June 18 (see 14062019).
MINNEAPOLIS -- As the customs drawback claims process moves toward incorporation into the Automated Commercial Environment, Congress will need to act on Customs Reauthorization legislation in order to provide CBP the authority to both simplify and automate the program, said industry officials and a CBP customs official on June 18 at the American Association of Exporters and Importers (AAEI) annual conference. Both House and Senate Customs Reauthorization bills include provisions that would spur automation and revise drawback to simplify the process. Those bills, however, have not moved on Capitol Hill in months.
It's still unclear exactly when the three Centers of Excellence and Expertise (CEE) chosen for accelerated roll-out will begin to handle import processing for their respective industries, said Elena Ryan, who is in charge of the transition to the CEEs at CBP. Those CEEs -- the Pharmaceutical CEE in New York, the Electronics CEE in Los Angeles and the Petroleum CEE in Houston -- will be the first centers to handle post-release processing for entire industries (see 14030613). Despite rumors otherwise, "we do not have a specific date in mind for all of this to happen," she said. Ryan discussed process on the CEEs during the American Conference Institute's Import Compliance and Enforcement forum on June 13.
CBP will begin accepting applicants to its Trusted Trader program pilot on June 16, it said in a notice announcing the pilot and outlining the benefits and responsibilities associated with participation. The long-awaited pilot combines CBP’s Customs-Trade Partnership Against Terrorism (C-TPAT) supply chain security program with its Importer Self Assessment (ISA) import compliance program. Participating importers will have to meet increased recordkeeping and reporting requirements, but will receive benefits like reduced targeting, partial release of held shipments, and the option to be exempt from Non-Intrusive Inspections.
CBP shot down a protest of three denied drawback claims filed by a petroleum refiner and marketer due to the company's substitution of a finished product. CBP's March 6 ruling, HQ H024887, reviewed drawback claims filed by the refiner, Tesoro, in 2007. The drawback claims were on crude oil imported into the company's Washington facility because of exports of jet fuel refined from different crude oil at the company's Alaska refinery. CBP also looked at whether two separately incorporated refineries owned by Tesoro, should be considered as a single legal entity.
The Court of International Trade on April 29 rejected a bid by BP Oil Supply Co. to get drawback on over 40 million barrels of crude oil it imported in the mid-1990s. Although the imported crude and the exported crude had been of different types, BP had requested unused merchandise drawback based on the fact that the different types of oil were about the same weight. But both CBP and CIT found that BP failed to provide enough evidence that the imported and exported oil were commercially interchangeable. And the court also found that the way the Alaska oil industry works means that the exported oil wasn’t unused, either.
CBP will face a number of new logistical challenges as it works to transition three Centers of Excellence and Expertise (CEEs) to handle several entry processes for entire industries, said industry and agency officials that spoke at the 2014 Trade Symposium. The first three CEEs to make the shift -- those handling electronics, petroleum and pharmaceutical industries (see 14030613) -- will be tasked with processing the entries of tens of thousands of companies when they previously handled under a hundred, said CBP officials during a panel on the CEEs.
Dow Chemical may substitute the import of a chemical with a separate export of that chemical for drawback purposes, said CBP's Entry Process and Duty Refunds Branch in an Feb. 10 ruling recently released. CBP said it considered the imported and exported methyl acrylate commercially interchangeable and eligible for unused merchandise drawback. Specifically, CBP found the chemicals met the criteria for being interchangeable under the drawback statute, 19 U.S.C. Section 1313(j)(2).
CBP posted an updated version of its notice announcing that the next customs broker license exam will be on Monday, April 7.