If you are a business engaged in international trade, you may have a valuable opportunity to reduce costs through a program known as Duty Drawback. This program allows your business to recover the duties, taxes, and fees paid on imported goods that are subsequently exported or destroyed.

Although the recovery process can be complex, the potential savings can be significant. Continue reading to explore the basics of the program, who is eligible, and how Tradewin can assist you.

What is Duty Drawback?

Duty Drawback is America's oldest trade program, being a fundamental part of U.S. trade policy since 1789. This program aims to support American businesses by providing a means to recover duties, taxes, and fees paid on 99% of imported goods that are later exported or destroyed.

With increases in tariff rates, Duty Drawback is a key duty mitigation tool for US companies.  This beneficial trade program not only enhances the competitiveness of U.S. businesses in the global marketplace but also serves as a catalyst for economic growth. It is crucial in strengthening the nation's manufacturing and export sectors.

Who Can Claim Drawback?

The Exporter of Record is typically the primary claimant for Duty Drawback refunds. However, the flexibility of the program allows for the transfer of these rights. Manufacturers and importers who play significant roles in the import-export process may be eligible to claim drawback.

This rights transfer empowers businesses across the supply chain to maximize the benefits of the program, streamlining operations and reducing costs associated with international trade.

Is Duty Drawback Right for Your Business?

Determining whether Duty Drawback is practical for your business requires careful assessment and analysis. While this process can be complex and time-consuming, it ultimately offers a clear path for initiating and securing your first refund, which usually takes several months.

This process involves a close collaboration between your company and a Customs broker or filer. A thorough assessment of your company's import and export activities is necessary to evaluate the potential benefits. This assessment includes:

• Determining the total duties paid for the past 5 years
• Collecting relevant data from the Automated Commercial Environment (ACE) and Automated Export System (AES)
• Considering factors like Free Trade Agreements, Free Trade Zones, and China tariff exclusions

A feasibility analysis will evaluate the availability of essential records and resources needed for a successful drawback program. Also, a scope determination will examine the relevant import, production, and export history, including any supplier transactions that may qualify for drawback.

How Tradewin Can Help

At Tradewin, we specialize in simplifying the Duty Drawback process for businesses. Our expertise focuses on identifying potential savings, navigating complex program application and claim-filing procedures, and ensuring compliance with Customs regulations. We can streamline your operations and reduce costs by leveraging advanced technology and industry best practices, providing you with confidence throughout your Duty Drawback journey.

To learn more about maximizing your Duty Drawback benefits, download our comprehensive Duty Drawback eBook for valuable insights and step-by-step guidance, or contact Tradewin today.