Drawback

Section 313 of the Tariff Act of 1930 (19 U.S.C. 1313) is amended to read as follows:

313.

Drawback

(a)

Drawback for exported merchandise

If merchandise is imported into the United States and that merchandise or its substitute, whether self-contained or contained in drawback merchandise, or drawback merchandise or its substitute, whether self-contained or contained in other drawback merchandise or its substitute, is subsequently exported, drawback shall be granted if the following conditions are met: (1) (A)The exporter of the imported merchandise or its substitute imported the merchandise, or received the imported merchandise or its substitute directly or indirectly from the importer. (B)The exporter of the drawback merchandise or its substitute received drawback merchandise or its substitute, or produced drawback merchandise or its substitute directly or indirectly. (2)The exported merchandise or its substitute is classifiable within the same 8-digit HTS subheading as the imported merchandise. If the exported merchandise or its substitute is not classifiable within the same 8-digit HTS subheading as the imported merchandise, the claimant may show by records that— (A)the exported merchandise or its substitute could be classifiable within the same 8-digit HTS subheading as the imported merchandise; or (B)the imported merchandise or its substitute, or drawback merchandise or its substitute, could be contained in, used in the production of, or in any other manner integrated with, the exported merchandise or its substitute. (b)

Drawback claimants

(1)

In general

A drawback claimant may be any party, if the following conditions are met: (A)If the claimant is not the importer, the claimant has obtained permission from the importer to receive drawback for the designated import. (B)If the claimant is not the exporter, the claimant has obtained permission from the exporter to obtain drawback for the designated export. (2)

Joint and several liability

Importers, up to the amount of duties, taxes, and fees on the designated import permitted by the importer for drawback by the claimant, and drawback claimants are jointly and severally liable for drawback claims. (c)

Time limitation for filing

No drawback shall be paid unless the drawback claim is filed within 5 years from the earliest date of importation of the merchandise that is designated on the claim. (d)

Amount of drawback

The drawback amount paid to the claimant shall not exceed the amount of duties, taxes, and fees paid on the designated line item. The exclusive means for determining the amount of drawback to be paid to the claimant shall be as follows: (1)For drawback under paragraphs (1)(A) and (2)(A) of subsection (a), the lesser of— (A)the amount of the duties, taxes, and fees per unit on the line item designated for drawback, based upon the entered value of that line item, multiplied by the number of units claimed; and (B)the amount of the duties, taxes, and fees per line item unit that would have been imposed on the exported merchandise or its substitute had such merchandise been imported, based upon the value of that exported merchandise or its substitute, multiplied by the number of units claimed. (2)For drawback under paragraph (1)(B) and (2)(B) of subsection (a), the amount of the duties, taxes, and fees per unit on the line item designated for drawback, based upon the entered value of that line item, multiplied by the number of units claimed. (e)

Refunds, waivers, or reductions under certain Free Trade Agreements

(1)

NAFTA

For purposes of subsections (a) and (g), if merchandise that is exported to a NAFTA country is a good subject to NAFTA drawback, no customs duties on the merchandise may be refunded, waived, or reduced in an amount that exceeds the lesser of— (A)the total amount of customs duties paid or owed on the merchandise on importation into the United States; or (B)the total amount of customs duties paid on the merchandise to the NAFTA country. (2)

Canada

If Canada ceases to be a NAFTA country and the suspension of the operation of the United States-Canada Free-Trade Agreement thereafter terminates, then for purposes of subsection (a), the shipment to Canada during the period such Agreement is in operation of merchandise made from or substituted for, as appropriate, drawback eligible merchandise under section 204(a) of the United States-Canada Free-Trade Implementation Act of 1988 (19 U.S.C. 2112 note) does not constitute an exportation. (3)

Chile

(A)For purposes of subsections (a) and (g), if merchandise that is exported to Chile is a good subject to Chile FTA drawback, no customs duties on the merchandise may be refunded, waived, or reduced, except as provided in subparagraph (B). (B)The customs duties referred to in subparagraph (A) may be refunded, waived, or reduced by— (i)100 percent during the 8-year period beginning on January 1, 2004; (ii)75 percent during the 1-year period beginning on January 1, 2012; (iii)50 percent during the 1-year period beginning on January 1, 2013; and (iv)25 percent during the 1-year period beginning on January 1, 2014. (4)

Fungible merchandise

(A)The exportation to a NAFTA country of merchandise that is fungible with and substituted for imported merchandise, other than merchandise described in paragraphs (1) through (8) of section 203(a) of that Act, shall not constitute an exportation for purposes of subsection (a). (B)Beginning on January 1, 2015, the exportation to Chile of merchandise that is fungible with and substituted for imported merchandise, other than merchandise described in paragraphs (1) through (5) of section 203(a) of the United States-Chile Free Trade Agreement Implementation Act, shall not constitute an exportation for purposes of paragraph (2). The preceding sentence shall not be construed to permit the substitution of unused drawback under paragraph (2) of this subsection with respect to merchandise described in paragraph (2) of section 203(a) of the United States-Chile Free Trade Agreement Implementation Act. (5)

Total amount of customs duties paid or owed

As used in this subsection, the total amount of customs duties paid or owed on the merchandise on importation into the United States means the duties, taxes, and fees per unit paid on the import line item designated for drawback. (f)

Merchandise for use in vessels

The provisions of this section shall apply to merchandise imported and used in the construction and equipment of vessels built for foreign account and ownership, or for the government of any foreign country, notwithstanding that such vessels may not within the strict meaning of the term be exported. (g)

Agricultural merchandise

No drawback shall be available with respect to agricultural merchandise subject to over-quota rate of duty established under a tariff-rate quota, except on a direct identification basis when such merchandise has not been used in the United States. (h)

Puerto Rico

Any drawback authorized under this section shall be paid from the customs receipts of Puerto Rico if the duties were originally paid into the Treasury of Puerto Rico. (i)

Destruction of merchandise

(1)

In general

The exportation requirement contained in subsection (a) may be satisfied by destroying merchandise, except that drawback merchandise is destroyed in lieu of exportation only if— (A)the merchandise that was imported is the actual merchandise that is destroyed; and (B)the claimant directly identifies the actual merchandise that is destroyed in lieu of exportation. (2)

Amount of drawback

For claims filed pursuant to this subsection, the drawback paid to the claimant shall be the amount of the duties, taxes, and fees per line item unit on the imported merchandise designated for drawback, whether by direct identification or by accounting method, multiplied by the number of units claimed. (j)

Limitation on exportation requirement

Imported merchandise that has not been regularly entered or withdrawn for consumption does not satisfy the exportation requirement of this section. (k)

Claiming exportation or destruction

An exportation or destruction may be claimed on only one drawback claim, except that components or ingredients of exported or destroyed merchandise that were not claimed on one drawback claim covering a certain exportation or destruction may be claimed on another drawback claim covering that same exportation or destruction. (l)

Regulations

The Secretary of the Treasury is authorized to promulgate regulations to carry out this section. (m)

Flavoring extracts; medicinal or toilet preparations; bottled distilled spirits and wines

(1)

Flavoring extracts; medical or toilet preparations

Upon the exportation of flavoring extracts, medicinal or toilet preparations (including perfumery), manufactured or produced in the United States in part from domestic alcohol on which an internal revenue tax has been paid, there shall be allowed a drawback equal in amount to the tax found to have been paid on the alcohol so used. (2)

Distilled spirits

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— (A)the claim for drawback is filed by the bottler or packager of the spirits; and (B)the 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. (n)

Definitions

As used in this section: (1)

Drawback

The term drawback means a refund of 99 percent of applicable duties, taxes, and fees paid pursuant to Federal law upon importation of merchandise, and not refunded under any other law, in a case in which— (A)the imported merchandise or its substitute, or drawback merchandise or its substitute, is exported; or (B)the imported merchandise is destroyed. (2)

HTS

The term HTS means the Harmonized Tariff Schedule of the United States. (3)

NAFTA country; good subject to nafta drawback

The terms NAFTA country and good subject to NAFTA drawback have the meanings given those terms in sections 2(4) and 203(a), respectively, of the North American Free Trade Agreement Implementation (19 U.S.C. 3301(4) and 3333(a)). (4)

Good subject to Chile fta drawback

The term good subject to Chile FTA drawback has the meaning given that term in section 203(a) of the United States-Chile Free Trade Agreement Implementation Act (19 U.S.C. 3805 note). (5)

Substitute

Any merchandise may be substituted for any other merchandise when the two share the same 8-digit HTS subheading. When the two do not share the same 8-digit HTS subheading, they may be substituted for one another if a claimant can demonstrate that they were both classifiable within the same 8-digit HTS subheading during the period beginning on the date of importation of the merchandise designated for drawback to the date of the drawback claim. To establish such a nexus, the claimant shall submit records with its claim that demonstrate the link from one 8-digit HTS subheading to the other 8-digit HTS subheading. (6)

Fungible

Merchandise is fungible when it is commercially identical to other merchandise in all instances. (7)

Line item

The term line item means the line item on the entry summary or its equivalent and a reconfigured entry. (8)

Contained in

The term contained in means contained in, used in the production of, or in any other manner integrated with, other merchandise. (9)

Drawback merchandise

The term drawback merchandise means merchandise in which is contained imported merchandise or its substitute, or other drawback merchandise or its substitute. Drawback merchandise may be exported or destroyed with a claim for drawback, or it may be contained in other drawback merchandise or its substitute. (10)

Directly Identify

The term directly identify means to identify of merchandise by a unique identifier such as a serial number or by the use of an approved inventory accounting method.