On February 24, 2016, the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA) was passed into law and signed by former President Obama. TFTEA Drawback Simplification *P.L. The Court of International Trade ruled on October 12, 2018 that CBP must file a final rule for drawback under the Trade Facilitation and Trade Enforcement ACT (TFTEA) with the Office of the Federal Register by December 17, 2018. This data-driven analysis is different than before, with tariff-level reviews of historic import and export data dating back a greater number of years in order to pair merchandise based on classifications. Congress provided Treasury two years from the enactment of the TFTEA to promulgate regulations implementing the TFTEA’s drawback … TFTEA Drawback Regulations are Finally Here! TFTEA Drawback Modernization The Trade Facilitation and Trade Enforcement Act of 2015 “TFTEA,” became effective February 24, 2018 and simplified drawback. The Final Rule achieves this modernization by, among other things, liberalizing the merchandise substitution standard, simplifying recordkeeping requirements, and requiring the electronic filing of drawback claims. CBP eventually issued on Aug. 2 proposed regulations that not only set forth the TFTEA changes but also revise how CBP treats drawback of excise and other federal taxes. Kristopher Chandler is an Associate with the Firm and may be reached at 614-223-9377 or kchandler@beneschlaw.com. On August 2, 2018, US Customs and Border Protection (CBP) published in the Federal Register its long-awaited notice of proposed rulemaking (NPRM) [USCBP-2018-0029] on modernized drawback procedures under the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA). h�bbd``b`���A��,�k&���l��ă&F6% ���� ��w�O� tq L. … The Act amends Section 313 of the Tariff Act of 1930 (19 USC § 1313), which governs the drawback of customs duties, taxes, and fees, upon the export of imported goods under certain circumstances. This Duty Drawback webinar will help you understand the basic aspects of the different types of duty drawback programs available along with the new rules and regulations, known as TFTEA, which have significantly changed some aspects of the duty drawback industry altogether. The new regulations also advance the interests of modernization by requiring that all drawback claims must be filed electronically. The purpose of duty drawback is to encourage U.S. manufacturing as well as foreign export sales. The recovery of tariff duties through drawback is financially advantageous particularly for importers with high inbound and outbound traffic flows, although the recordkeeping required to support drawback claims can be burdensome. Duty drawback was passed by the United States Congress in 1789. U.S. Customs and Border Protection (CBP) posted notice implementing changes to the drawback regulations adopted under a Final Rule which modernized the filing of drawback as directed by the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA). The Working Group discussed this issue at length with CBP officials to explain why it’s important to continue Accelerated Payment in the interim. TFTEA and Duty Drawback Duty Drawback is a program that allows for a refund of 99 percent of duties, fees, and taxes for merchandise imported with duties or fees paid and subsequently exported (or destroyed); this includes finished goods, products used in manufacturing, defective merchandise, and substituted goods.1 One area of particular focus during notice and comment was application of substitution drawback to excise tax. The final regulations depart from the interim regulations in that CBP will allow mixed TFTEA and non-TFTEA substitution drawback claims (“mixed claims”). The new regulations liberalize the merchandise substitution standards, simplify recordkeeping requirements, extend and standardize filing timelines and require electronic filing of drawback claims. The Path to TFTEA 2 • TFTEA statute signed 2/24/16, effective 2/24/18 • Development of core drawback in ACE • Development of TFTEA drawback in ACE • Regulations delayed- Interim Guidance issued February 2018 • Deployment of core and TFTEA drawback in ACE … Calculating TFTEA claims vary depending on the type of drawback the claimant is filing under. TFTEA was signed into law on February 24, 2016, and Section 906 of this act made specific changes to the drawback law and filing process and as of February 24, 2019, all drawback claims must be filed under the new TFTEA regulations. [6] This clarification restricts the ability to file substitution drawback claims in circumstances in which internal revenue taxes have not been paid on the substituted (or exported) product, which in the past has resulted in imported products being introduced into commerce with no net payment of excise tax, a “double drawback.” This issue has been of keen interest to the alcohol industry due to the imposition of such excise taxes. Calculating TFTEA claims vary depending on the type of drawback the claimant is filing under. This was a hotly-awaited document across all industries, as the drawback of the future was hinging on decisions that would be put forth. The final regulations depart from the interim regulations in that CBP will allow mixed TFTEA and non-TFTEA substitution drawback claims (“mixed claims”). This change will result in savings to trade members … Adding two years to the period available for claiming substitution drawback means that greater volumes of imports may be paired exports to support drawback claims and operations teams are under less pressure to manage inbound and outbound traffic flows to maximize relief. Drawback Regulations & Law: Drawback Law: The concept of “drawback” allows for a refund of duty paid on imported merchandise that is subsequently exported from the United States. CBP’s nearly 500-page “modernized” regulations implement TFTEA’s requirements, but not everyone is cheering. This modernization is an attempt to reduce both the administrative burden placed on CBP in reviewing paper drawback claims as well as the overall administrative cost incurred by importers. [7], Any person who knowingly and willful files any false or fraudulent entry or claim for the payment of drawback is subject to criminal penalties provided in the regulations. The regulations further expand and harmonize the time window for all drawback claim types to five (5) years form the date of importation to the filing of the drawback claim related to that import. The NPR reflects a complete re-writing of existing customs drawback regulations in order to implement the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA). Complete blanks electronically using PDF or Word format. KPMG TradeWatch: TFTEA Duty Drawback Regulations – Polling Results Trade & Customs Services Professionals from KPMG LLP’s (KPMG) Trade & Customs Services practice recently conducted a poll during a webcast focusing on the Trade Facilitation and Trade Enforcement Act of 2019 (TFTEA). New Duty Drawback Regulations. 0 endstream endobj startxref 1682 0 obj <> endobj For purposes of paragraph (1)(C)(ii), drawback may be claimed by designating an entry of merchandise that was imported within 1 year before the date of exportation or destruction of the merchandise described in paragraph (1)(A) and (B) under the supervision of U.S. Customs and Border Protection. Enhance your productivity with powerful solution! The rules and regulations that govern duty drawback under TFTEA are continuing to evolve years after its passage. #114-125 (HR 644, Sec. KPMG TradeWatch: TFTEA Duty Drawback Regulations – Polling Results Trade & Customs Services Professionals from KPMG LLP’s (KPMG) Trade & Customs Services practice recently conducted a poll during a webcast focusing on the Trade Facilitation and Trade Enforcement Act of 2019 (TFTEA). The final rule, posted in the Federal Register, amends the Trade Facilitation and Trade Enforcement Act (TFTEA) of 2015. The new regulations clarify the prohibition on the filing of substitution drawback claims for internal revenue excise tax in situations where no excise tax was paid upon the substituted merchandise or where the substituted merchandise is the subject of a different claim for refund or drawback of tax. [6] See 19 CFR §§ 190.22(a)(1)(ii)(C), 190.32(b)(3), 190.171(c)(3), 191.22(a), 191.32(b)(4), and 191.171(d). The U.S. Department of Customs and Border Protection (CBP) is preparing for the implementation of new changes to duty drawback specified in the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA). Alliance staff will begin submitting claims via the new drawback module in ACE on this date. TFTEA included a provision for us to assess drawback modernization and identify industries affected by changes in eligibility for drawback refunds within 12 months from when the final regulations were issued. Originally established by the Continental Congress in 1789, the United States drawback statute has existed in … Combining this with the fact that TFTEA claims will not be processed or liquidated, drawback payments will stop completely after February 24, 2019 if the regulations are not implemented by that time. This morning CSMS #18-000737 was distributed, releasing the final regulations for TFTEA drawback. The TFTEA amended the Tariff Act of 1930, as amended, to simplify the filing of drawback claims making them less burdensome for both claimants and CBP. The purpose of duty drawback is to encourage U.S. manufacturing as well as foreign export sales. He is a licensed U.S. Customs Broker in addition to an attorney and may be reached at 216-363-4658 or jtodd@beneschlaw.com. A Waiver of Prior Notice for Destruction has been added in §190.71. United States Customs and Border Protection (“CBP”) published a highly anticipated Final Rule on December 18, 2018, with the effect of modernizing duty drawback as required by the Trade Facilitation and Trade Enforcement Act of 2015 (the “Act”). Under the regulations, drawback granted on the export or destruction of substituted merchandise will … The regulations further expand and harmonize the time window for all drawback claim types to five (5) years form the date of importation to the filing of the drawback claim related to that import. Our services include all matters necessary to establish and run a sophisticated duty drawba… Substitution drawback is not only simplified and rendered more objective due to tariff-level analysis, but the scope of available drawback is arguably expanded due to these changes. On February 24, 2016, the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA) was passed into law and signed by former President Obama. [3] [9] The potential civil penalties are based on the amount of actual or potential loss of revenue in relation to the drawback claim.[10]. tftea drawback regulations. Approve forms by using a lawful digital signature and share them by way of email, fax or print them out. %%EOF The principles of customs duty drawback date to 1789 in the United States. In an Oct. 12 order, the CIT directed CBP to file final regulations with the Office of the Federal Register on or before Dec. 17. US Customs and Border Protection (CBP) published a final rule announcing regulatory changes to duty drawback that are part of the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA). Just a few days ago, a pivotal lawsuit about specific provisions in TFTEA’s drawback rule, National Association of Manufacturers (NAM) vs. The long-awaited TFTEA drawback regulations were published on December 18, 2018. download blanks on your PC or mobile device. This amendment significantly expands the scope and ease of substitute drawback. The drawback regulations were the subject of Congressional hearings as well as a lawsuit in which the Court of … Companies that are not automated have several options for filing electronic drawback claims: Charter is the leading provider of duty drawbackand tax recovery services in the United States. Jonathan Todd is a Partner with the Transportation & Logistics Practice Group at Benesch, Friedlander, Coplan & Aronoff. These changes are significant for savvy importers. Drawback claims may be based on circumstances such as the export of the very same imported good, of merchandise manufactured using the imported good, or of merchandise materially similar to the imported good. Combining this with the fact that TFTEA claims will not be processed or liquidated, drawback payments will stop completely after February 24, 2019 if the regulations are not implemented by that time. New Duty Drawback Regulations. 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