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Life is full of misunderstandings. Each year, thousands of importers lose millions of dollars in recoverable import duties. For the most part, an importer’s failure to file for drawback can be attributed to several simple misconceptions.
Lack of knowledge is one reason that an importer does not submit a drawback claim to U.S. Customs. Many importers view import duties as a tax, somewhat akin to the income tax paid to the government. However, unlike income tax, allowances are made for importers to recover 99% of the import duties paid to Customs. The circumstances under which duties can be recovered by an importer are provided for by law, but many importers are unaware that such laws exist. On a related note, some importers are aware that drawback exists, but don’t have the knowledge or expertise to evaluate their drawback potential. If you’re unfamiliar with drawback and its regulations, it can be daunting to try to make sense out of your import/export flow and even more intimidating to try to determine how much drawback potential you have.
Some importers know about drawback and have evaluated their drawback potential at some time in the past. But, if you haven’t looked at drawback for some years, times have changed! New drawback regulations over the past several years have opened the field for more importers to file drawback under more circumstances than ever before. Take a new look!
To some, the idea of drawback sounds too good to be true. Good ideas tend to be mistrusted, especially anything that works to our advantage. After all, if the government required you to pay duty when goods were imported, why should they make it easy for you to get your money back? Conversely, some importers are provided with misinformation by their vendors, exporters, or forwarders, who present drawback as extremely difficult. Such misinformation often scares an importer away from initiating a drawback program. The fear of an audit, or of the expense involved, or of the time required to submit a drawback claim can encourage an importer to close the door on drawback before they’ve seen what’s behind it.
As with anything else, the truth about drawback lies somewhere in between. It’s neither a piece of cake, nor is it an onerous burden. It is, however, to your advantage to assess your drawback potential fairly and with as much accurate information as you can lay your hands on. As with everything, drawback has a learning curve and if you don’t have the knowledge and expertise necessary to evaluate your drawback potential or to file your claims right now, it would be wise to consult with a drawback professional.
Finally, some importers are discouraged from filing drawback because of the difficulty in obtaining certificates of delivery. Don’t give up!!! Part of the price of those imports include the duties paid U.S. Customs. If you’ve used those parts/items in manufacturing or re-exported them unused, you’re entitled to a refund of the portion of the purchase price that represents the import duties.
The bottom line.......talk to your customs broker, customs attorney, or better still, drawback specialist about your drawback potential. Don’t let "ignorance of the law" prevent you from recovering your money.
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