[Title 19 CFR D]
[Code of Federal Regulations (annual edition) - April 1, 2002 Edition]
[Title 19 - CUSTOMS DUTIES]
[Chapter I - UNITED STATES CUSTOMS SERVICE, DEPARTMENT OF THE TREASURY]
[Part 191 - DRAWBACK]
[Subpart D - Rejected Merchandise]
[From the U.S. Government Printing Office]


19CUSTOMS DUTIES22002-04-012002-04-01falseDSubpart DCUSTOMS DUTIESUNITED STATES CUSTOMS SERVICE, DEPARTMENT OF THE TREASURYDRAWBACK
                     Subpart D--Rejected Merchandise



Sec. 191.41  Rejected merchandise drawback.

    Section 313(c) of the Act, as amended (19 U.S.C. 1313(c)), provides 
for drawback upon the exportation or destruction under Customs 
supervision of imported merchandise which has been entered, or withdrawn 
from warehouse, for consumption, duty-paid; and which does not conform 
to sample or specifications; has been shipped without the consent of the 
consignee; or has been determined to be defective as of the time of 
importation. The claimant must show by evidence satisfactory to Customs 
that the exported or destroyed merchandise was defective at the time of 
importation, or was not in accordance with sample or specifications, or 
was shipped without the consent of the consignee (see subpart P for 
drawback of internal-revenue taxes for unmerchantable or nonconforming 
distilled spirits, wines, or beer).



Sec. 191.42  Procedure.

    (a) Return to Customs custody. The claimant must return the 
merchandise to Customs custody within 3 years after the date the 
merchandise was originally released from Customs custody. Drawback will 
be denied on merchandise returned to Customs custody after the statutory 
3-year time period or exported or destroyed without return to Customs 
custody.
    (b) Required documentation. The claimant shall submit documentation 
to the drawback office as part of the drawback claim to establish that 
the merchandise did not conform to sample or specification, was shipped 
without the consent of the consignee, or was defective as of the time of 
importation. If the claimant was not the importer, the claimant must:
    (1) Submit a statement signed by the importer and every other 
person, other than the ultimate purchaser, that owned the goods that no 
other claim for drawback was made on the goods by any other person; and
    (2) Certify that records are available to support the statement 
required in paragraph (b)(1) of this section.
    (c) Notice. A notice of intent to export or destroy merchandise 
which may be the subject of a rejected merchandise drawback claim (19 
U.S.C. 1313(c)) must be provided to the Customs Service to give Customs 
the opportunity to examine the merchandise. The claimant, or the 
exporter (for destruction, see Sec. 191.44), must file at the port of 
intended redelivery to Customs custody a Notice of Intent to Export, 
Destroy, or Return Merchandise for Purposes of Drawback on Customs Form 
7553 at least 5 working days prior to the date of intended return to 
Customs custody. Waiver of prior notice for exportations under 19 U.S.C. 
1313(j) (see Sec. 191.91 of this part) is inapplicable to exportations 
under 19 U.S.C. 1313(c).
    (d) Required Information. The notice shall provide the bill of 
lading number, if known, the name and telephone number, mailing address, 
and, if available, fax number and e-mail address of a contact person, 
and the location of the merchandise.
    (e) Decision to waive examination. Within two (2) working days after 
receipt of the Notice of Intent to Export, Destroy, or Return 
Merchandise for Purposes of Drawback (see paragraph (c) of this 
section), Customs will notify, in writing, the party designated on the 
Notice of Customs decision to either examine the merchandise to be 
exported or destroyed, or to waive examination. If Customs timely 
notifies the designated party, in writing, of its decision to examine 
the merchandise (see paragraph (f) of this section), but the merchandise 
is exported or destroyed without having been presented to Customs for 
such examination, any drawback claim, or part thereof, based on the 
Notice of Intent to Export, Destroy, or Return Merchandise for Purposes 
of Drawback, shall be denied. If Customs notifies the designated party, 
in writing, of its decision to waive examination of the merchandise, or, 
if timely notification of a decision by Customs to examine or to waive 
examination is absent, the merchandise may be exported or destroyed 
without delay and shall be deemed to have been returned to Customs 
custody.
    (f) Time and place of examination. If Customs gives timely notice of 
its decision to examine the merchandise to be exported or destroyed, the 
merchandise

[[Page 546]]

to be examined shall be promptly presented to Customs. Customs shall 
examine the merchandise within five (5) working days after presentation 
of the merchandise. The merchandise may be exported or destroyed without 
examination if Customs fails to timely examine the merchandise after 
presentation to Customs, and in such case the merchandise shall be 
deemed to have been returned to Customs custody. If the examination is 
completed at a port other than the port of actual exportation or 
destruction, the merchandise shall be transported in-bond to the port of 
exportation or destruction.
    (g) Extent of examination. The appropriate Customs office may permit 
release of merchandise without examination, or may examine, to the 
extent determined to be necessary, the items exported or destroyed.
    (h) Drawback claim. When filing the drawback claim, the drawback 
claimant must correctly calculate the amount of drawback due (see 
Sec. 191.51(b) of this part). The procedures for restructuring a claim 
(see Sec. 191.53 of this part) shall apply to rejected merchandise 
drawback if the claimant has an ongoing export program which qualifies 
for this type of drawback.
    (i) Exportation. The claimant shall export the merchandise and shall 
provide documentary evidence of exportation (see subpart G of this 
part). The claimant may establish exportation by mail as set out in 
Sec. 191.74 of this part.

[T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 15288, Mar. 31, 1998]



Sec. 191.43  Unused merchandise claim.

    Rejected merchandise may be the subject of an unused merchandise 
drawback claim under 19 U.S.C. 1313(j)(1), in accordance with subpart C 
of this part, to the extent that the merchandise qualifies therefor.



Sec. 191.44  Destruction under Customs supervision.

    A claimant may destroy merchandise and obtain rejected merchandise 
drawback by complying with the procedures set forth in Sec. 191.71 of 
this part relating to destruction.