What is Duty Drawback?
Duty drawback is a refund of customs duties, certain taxes and fees paid on imported goods that are later exported or destroyed under customs supervision. In the United States it is governed by 19 U.S.C. 1313 and 19 CFR Part 190, as modernized by the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA). The main categories are manufacturing drawback (1313(a) direct identification and 1313(b) substitution), unused merchandise drawback (1313(j)) and rejected merchandise drawback (1313(c)). Refunds are generally 99 percent of the eligible amount, and substitution claims require the imported and exported goods to share the same 8-digit HTSUS number. In the EU, the Union Customs Code relies mainly on inward processing with suspension of duties rather than refund after payment, so relief is usually planned before import.
Why it matters for forwarders
Drawback succeeds or fails on documentation, so forwarders matter even when a licensed broker or the claimant files the claim. The export leg must be provable: export filings, bills of lading or air waybills, and records linking the exported goods to specific import entries. A US claim must be filed within 5 years of the date of importation, and since 24 February 2019 all claims are filed electronically in ACE. Common losses come from exporting under the wrong party name, missing export proof, or destroying goods without notifying CBP in advance. Exporters with high-duty imports, especially goods affected by additional tariffs, should decide at booking whether a shipment is drawback-eligible so the right records are captured.