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We’re all familiar with how to file a drawback claim. As long as a claim is in our hands, we know what documentation is required, what information is missing, and what errors have occurred. But what happens to a claim when it’s left the exporter’s hands and is delivered to U.S. Customs for review and liquidation? How does Customs sort through the large number of claims they receive and prioritize them for liquidation and payment? Is there a method to drawback madness?
When U. S. Customs receives a drawback claim, the first question asked is whether the claim is electronic (either via diskette or ABI) or paper-only. Although the new regulations requiring electronic filing have not yet arrived, the claimant filing electronically had a distinct, and very practical, time advantage over a paper-only claimant. Here’s why.
If the claim is paper-only, U.S. Customs must manually input the relevant import information. U.S. Customs estimates that the exporter filing a paper-only claim is facing a minimum delay of 3 months between the receipt of a paper-only claim and the completion of data input of import information by U.S. Customs. The claim is subjected to selectivity only after all import data has been input. On the other hand, the import information on an electronic claim is immediately entered into U.S. Customs drawback system and selectivity is performed.
Selectivity determines whether any imports on a claim fall into one of the primary focus groups determined by U.S. Customs. If an import is flagged during selectivity, a request for original import documentation is automatically sent from the U.S. Customs office where the drawback claim has been filed to the Customs office where the import entry is held. The retrieval of original import documentation is a low priority and turn-around is estimated to be between sixty and ninety days. Once all imports are received, they are flagged for 90-day liquidation.
U.S. Customs also determines how a claim is initially reviewed by whether or not a claimant is entitled to special privileges. If an exporter has been approved for special privileges (i.e. accelerated payment, exporter’s summary), the claim is subjected to the selectivity process and undergoes a cursory review by the drawback specialist. The cursory review verifies that basic information required on a claim has been completed and that any required documentation such as proof of export, has been provided. At this point, the claim will fall into one of four scenarios.
If selectivity flags an import and the claim passes the cursory review, the claim is filed awaiting receipt of the original import documentation. In the event that selectivity flags an import and the claim does not pass the cursory review, it is filed until the obvious errors on the claim have been rectified and the import documentation has been received. If the cursory review reveals basic errors on the claim, it will be filed until the errors have been corrected. Provided that the claim is not flagged by selectivity and the claim has no blatant errors, the drawback specialist reviews and liquidates the claim.
If the exporter has not been approved for special privileges, and the claim had been flagged by selectivity, it is immediately filed in anticipation of the receipt of import entries. No cursory review is performed and any problems or errors on the claim will remain undetected until the original import documentation is received. That could mean an additional delay in the liquidation of your claim and the receipt of your refund.
Although nothing can expedite a claim that has been flagged by selectivity, common errors on claims can delay your claim and frustrate both you and the drawback specialist. Next month, find out what errors are most common, and how to avoid them!
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