TradeLane

Duty Drawback – Not Just for Returns

Posted by JoShannan Kimpel

11/3/15 1:51 PM

shutterstock_88978762.jpg

Fancy cocktail toothpicks, yoga pants that do not leave much to the imagination, cell phone cases that are no longer in style, and cars that were washed and detailed by Hurricane Sandy while waiting at the port are just some of the items that were imported into the U.S. with the intention of being sold. Instead, they were disposed of and drawback claimed on the duties and fees paid.

People usually think of Drawback as merchandise that is imported duty paid, then exported without entering the commerce of the U.S. However, if the merchandise is not sellable due to damage or defect (or poor taste) the merchandise may be returned to the foreign vendor or destroyed in the U.S. and a claim for drawback of duties paid can be filed. Often it is more cost effective for a foreign supplier to write off the merchandise as a loss and pay for a destruction rather than bear the costs of shipping the items back to the country of origin. This is most common when the items are damaged beyond repair (water-filled automobiles), seasonal (holiday sweaters) or just plain out of date (last years’ cell phone case). 

There are professional companies that specialize in destroying merchandise to U.S. Customs’ specifications. Methods of destructions include shredding,  burying, incinerating, burning and occasionally, having Mother Nature take care of it. Drawback on merchandise destroyed must have clear documentation showing the items entering the U.S. duty paid, entering the company’s inventory, leaving the company’s inventory, and being destroyed. Professional destruction companies will provide “Certificates of Destruction,” which list all the details of the merchandise and often pictures of the items as they are destroyed. The most important thing is that the drawback claimant is able to demonstrate a chain of custody of the merchandise subject to the claim.

If you have imported, duty merchandise that you believe might be eligible for duty and fee recovery, contact Tradewin.

Topics: Best Practices, Duty Drawback

Written by JoShannan Kimpel

JoShannan Kimpel is a Senior Account Manager and Licensed Broker at Tradewin. After working for several years as a Licensed Clinical Social Worker managing patients and behaviors, JoShannan switched to managing U.S. duty drawback accounts and customers in 2011. JoShannan eventually developed a penchant for automotive programs after she initially worked primarily with same condition drawback programs and added manufacturing drawback. After passing the Broker exam in 2014, she works with a variety of industries and commodities that covers the entire spectrum of U.S. duty drawback. JoShannan has a bachelor’s degree in social work from Southern Illinois University and a master’s in social work from University of Illinois.