Notices of intent to export for drawback must be filed at the port or by fax or email to ensure that the exporter gets proof of timely submission, CBP said in a recent ruling. Though submission by postal service is allowed, the filer risks that the application will not end up in the right hands at the port for processing, it said in ruling HQ H272816 (here). CBP also agreed with CBP San Francisco’s decision to reject an unused merchandise drawback application filed by CITTA Customs Brokerage because the relevant notice of intent was submitted unsigned.
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.
The timing for ACE programming related to changes to drawback from the Trade Facilitation and Trade Enforcement Act is uncertain due to a lack for funding to cover such programming, said Michael Cerny, a lawyer with Cerny Associates. CBP said in its most recent newsletter on drawback progress (here) that the agency discussed TFTEA and ACE during an April 13 teleconference and that similar calls will occur biweekly with a drawback-focused working group that helps advise CBP on drawback in ACE. Cerny, who is also in the drawback working group, said by email that "the trade has concerns about there being enough time for CBP to complete that programming in order to accept claims" by Feb. 24, 2018, as required in TFTEA (see 1603010043).
A termination of NAFTA would cause “all kinds of compliance issues,” mainly for companies operating in Mexico, Drinker Biddle attorney Nicolas Guzman said during an April 28 panel discussion. “So many companies are heavily invested in Mexico, that even if this goes away, they’re going to remain there,” he said during a session at an American Bar Association Section of International Law conference. “So if they’re going to remain there, then I think negative relations would quickly make it important to make sure those operations are being run in an appropriate and compliant manner.” Reports surfaced last week that President Donald Trump was considering withdrawing the U.S. from NAFTA, before he agreed not to terminate the deal (see 1704270007).
International Trade Today is providing readers with some of the top stories for April 17-21 in case they were missed.
CBP issued the following release on commercial trade and related matters:
Industry groups asked the U.S. government to work to repeal restrictions on NAFTA drawback and duty deferral and to expand ACE, in response to the Commerce Department’s request for information (here) on regulations that hamper domestic manufacturing. Although negotiators included the drawback and deferral restrictions in NAFTA to prevent China from using Mexico as a platform for component parts to be exported to the U.S., several companies involved in duty preference programs for foreign investors and domestic firms have nevertheless convinced suppliers from Asia and Europe to establish production facilities in Mexico to replace imports from non-NAFTA sources, according to the Duty Drawback Coalition’s comments (here). To counter the negative effects of NAFTA drawback restrictions on foreign-owned manufacturing plants in Mexico, Mexico established Sectoral Promotion Programs, which reduce several standard duty rates, the coalition said. Canada has reduced duty rates to mitigate the effects of the NAFTA drawback restrictions as well, the group said.
CBP remains wary of creating a Center of Excellence and Expertise entirely focused on customs brokers, said Rich DiNucci, executive director-cargo and conveyance security at CBP, during the National Customs Brokers & Forwarders Association of America annual conference April 4. Despite some early discussion of the possible addition of a CEE to focus on broker management (see 1510210017), CBP isn't inclined to further segment the importing process, DiNucci said. The CEEs will certainly evolve, "but I would say it's much too early to get into that concept now. We'll see where we are three, four years from now."
NEW ORLEANS -- CBP plans to propose changes to powers of attorney and cybersecurity requirements as part of an update to customs broker regulations, said Cynthia Whittenburg, deputy executive assistant commissioner at CBP’s Office of International Trade, during the National Customs Brokers & Forwarders Association of America annual conference on April 4. The agency is the process of drafting the proposal, which will then face "extensive economic evaluation" by the Office of Management and Budget (OMB). The evaluation is a requirement of a recent Trump administration executive order that requires the repeal of two regulations for every "significant" new rulemaking (see 1702070048). Whittenburg didn't give a time frame for the proposal, but the agency recently said timing would be hard to predict (see 1703070009).
NEW ORLEANS -- CBP has nearly fixed a series of issues surrounding release date updates in ACE that were causing CBP to mistakenly issue liquidated damages for late filing against compliant filers, said Jim Swanson, CBP director-cargo security and controls, at the National Customs Brokers & Forwarders Association of America annual conference on April 4. The agency is cancelling in full mistaken assessments of liquidated damages caused by the issues, and is currently deciding how to handle mistaken claims that have already been paid, Swanson said.
CBP sees additions of national monthly statements and line-level liquidations among the top recommendations within the agency's simplified processes initiative, said Randy Mitchell, director of the Commercial Operations and Entry Division, during a March 24 webinar sponsored by the National Customs Brokers & Forwarders Association of America. National monthly statements, which would consolidate port-specific entry statements into a single statement, would likely be phased in, he said. Line-level liquidation would be a "longer-term" goal due to some "legal and regulatory factors" involved, Mitchell said. Other "top recommendations" include monthly entry summaries and the elimination of the separate 09 entry type for reconciliation by allowing for Post-Summary Corrections instead, he said.