RANCHO MIRAGE, Calif. -- CBP is “currently on schedule” with its development of ACE drawback capabilities set for deployment in February, Acting CBP Commissioner Kevin McAleenan said Oct. 13 at the Western Cargo Conference (WESCCON). The agency is “planning success but will have a back-up plan” for any hiccups associated with the drawback deployment, and will share any contingency plans with the trade community this fall, he said.
Drawback
A duty drawback is a refund by CBP of the duties, taxes, or fees paid on imported goods, which were imposed upon importation. More broadly, a drawback also includes the refund or remission of other excise taxes pursuant to other provisions of law. CBP's duty drawback scheme under the Customs Act of 1962 allows exporters to receive a refund on customs duties they paid on imported products that are then used or incorporated into other products for export or remain unused until importation.
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With CBP regulations on new drawback procedures still not issued, software developers are growing concerned about whether they will be ready for the new system’s upcoming deployment in ACE. CBP has pledged to have capabilities in place for the new Trade Facilitation and Trade Enforcement Act drawback provisions on Feb. 24, but though the agency has found funding and begun its own programming efforts, software developers have been unable to start coding, leaving little time for testing before the deadline, several developers said in interviews.
CBP on Sept. 29 posted draft Customs and Trade Automated Interface Requirements (CATAIR) guidelines for drawback procedures under the Trade Facilitation and Trade Enforcement Act of 2016, it said in a message. The draft CATAIR is meant “to facilitate preparations for programming in advance of the forthcoming rulemaking,” CBP said. “The reader should be advised that this technical document is considered a DRAFT and is subject to revision before a final version is provided. Any decisions a reader makes based on this draft document are taken voluntarily and with the understanding that the draft may be revised,” it said.
A Porsche 911 imported from Canada but returned as faulty does not qualify for rejected or unused merchandise drawback because it lacks the required documentation and was used, CBP said in a Sept. 14 ruling. The importer did not provide sufficient proof that the sports car was defective, did not provide adequate notice of re-exportation to the port, and drove the vehicle before returning it, CBP said in ruling HQ H289069.
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CBP properly rejected a drawback claim due to an incomplete filing despite assurances from the filer that the requisite paperwork was actually included, the agency said in a June 12 ruling, HQ H275551. Argents Express Group protested CBP's initial rejection of the drawback claim in 2014 due to the lack of a "coding sheet" that is required for paper drawback claims. Despite subsequent efforts to provide the necessary items, CBP said Argents didn't meet the requirements for a drawback claim filing.
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Customs brokerages, law firms, and other members of the trade community are angling to secure eligibility of distilled spirits for substitution drawback under new regulations set to take effect Feb. 24, industry sources said in recent interviews. On that date, simplified substitution drawback enacted through the Trade Facilitation and Trade Enforcement Act will take effect, generally enabling substitution drawback to cover imports and exports with the same eight-digit HTS or Schedule B number. But questions surround whether CBP will deem distilled spirit exports eligible for substitution, due to the agency’s historical drawback treatment regarding alcohol-related excise taxes and technical classifications of U.S. production facilities.
CBP will use several phases to deploy post-release capabilities in ACE, CBP said in a July 27 CSMS message. The agency will separate out the collections functionalities and "deploy the other post release capabilities of ACE core using a phased approach," CBP said. CBP previously planned to deploy all the post-release capabilities on July 8 but delayed the deployment after further testing was deemed necessary (see 1706270049).