U.S. Customs and Border Protection has adopted final regulations on the new drawback process they were directed to implement under the Trade Facilitation and Trade Enforcement Act of 2015 (the TFTEA).
A little background:
Section 313 of the Tariff Act of 1930 authorizes Customs to refund or remit internal revenue tax paid on domestic alcohol (19 U.S.C. 1313(d)):
Upon the exportation of bottled distilled spirits and wines manufactured or produced in the United States on which an internal-revenue tax has been paid or determined, there shall be allowed, under regulations to be prescribed by the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, a drawback equal in amount to the tax found to have been paid or determined on such bottled distilled spirits and wines. In the case of distilled spirits, the preceding sentence shall not apply unless the claim for drawback is filed by the bottler or packager of the spirits and unless such spirits have been stamped or restamped, and marked, especially for export, under regulations prescribed by the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury.
The TFTEA changed the drawback laws – and this new rule implements the changes establishing processes for drawback under the TFTEA by:
- liberalizing standards for substituting merchandise
- easing documentation and record keeping requirements
- extending and standardizing timelines for filing drawback claims;
- mandating electronic filing of drawback claims; and
- clarifying the prohibition on filing a substitution drawback claim for internal revenue excise tax in situations where no excise tax was paid on the substituted merchandise or where the substituted merchandise is the subject of a different claims or refund or drawback of tax.You can read and download the new rule here. We’ve also embedded it here: