Phase 1: Opportunity Assessment
Before committing resources to a drawback program, assess your opportunity. Key questions include: How much duty do you pay annually? Break this down by tariff type—ordinary duties, Section 301, MPF, HMF. What percentage of your products are exported (or could be)? Where do you export? FTA countries have limitations. What type of drawback applies—unused merchandise, manufacturing, or both?
A rough calculation: total annual duties × export percentage × 99% = maximum annual recovery. If this number doesn’t justify program costs, drawback may not make sense for your operation.
Phase 2: Data Evaluation
Drawback programs fail most often due to data problems. Before proceeding, evaluate your ability to produce import entry data with HTS classifications and duties paid, export documentation with product descriptions, quantities, and destinations, and for manufacturing drawback, bills of material linking imports to exports.
Request sample data from your customs broker and freight forwarders. Assess quality, completeness, and format consistency. If critical data is missing or unreliable, address these gaps before launching a program.
Phase 3: Application Filings
Several applications must be filed with CBP before claims can begin. Accelerated Payment application allows refunds within 30-45 days. Waiver of Prior Notice applications—both one-time (for historical exports) and ongoing (for future exports). Manufacturing Ruling (if applicable)—either confirm coverage under the General Ruling or file for a Specific Ruling.
These applications typically require 60-90 days for CBP processing, so build this lead time into your implementation timeline.
Phase 4: Historical Claims
With applications approved, process historical claims first to capture expiring opportunities. Working backward from the oldest eligible entries, match imports to exports, prepare claim documentation, and file claims. Prioritize entries approaching the five-year expiration.
Historical claims often represent the largest immediate recovery but require the most intensive data gathering since documentation must be assembled retroactively.
Phase 5: Ongoing Operations
Transition from catch-up mode to steady-state operations. Establish regular claim cycles—monthly or quarterly depending on volume. Implement processes to capture required documentation at the time of import and export rather than gathering it retroactively. Monitor claim processing, respond to CBP inquiries promptly, and track refund receipts.
A mature drawback program runs continuously, capturing refunds as transactions occur rather than periodically scrambling to recover historical claims.
About TLR Drawback Services
TLR’s drawback team combines decades of specialized experience with modern technology to maximize duty recovery for our clients. From program evaluation through claim filing and payment, we handle the complexity so you can focus on your business. Contact us to explore your drawback opportunity.
