What Is Accelerated Payment for Duty Drawback?

Accelerated Payment is a U.S. Customs and Border Protection procedure that allows an approved drawback claimant to receive an estimated duty drawback refund before the drawback entry is liquidated. Because final liquidation can occur considerably later in the claim lifecycle, Accelerated Payment can improve the timing of cash recovery for companies with ongoing drawback programs.

Accelerated Payment does not change how much drawback a company is legally entitled to receive, and it does not constitute final approval or liquidation of the claim. The claimant must obtain CBP approval, maintain sufficient bond coverage, and continue satisfying the applicable drawback requirements.

How Does Accelerated Payment Work?

Normally, payment and liquidation of a drawback claim are connected to CBP's processing of the drawback entry.

Accelerated Payment separates those two events.

When an approved claimant requests Accelerated Payment on a qualifying drawback claim:

1. The drawback claim is filed.
2. CBP reviews the request for Accelerated Payment.
3. If the request satisfies the applicable requirements, CBP certifies the estimated drawback for payment.
4. The claimant receives the estimated refund before final liquidation.
5. CBP retains the ability to review and ultimately liquidate the claim later.

Under 19 CFR § 190.92, Accelerated Payment is available only when CBP's review does not identify omissions from or inconsistencies with the applicable drawback requirements.

Is Accelerated Payment the Same as Final Approval of a Drawback Claim?

No.

CBP regulations expressly state that Accelerated Payment does not constitute liquidation of the drawback entry. It is an estimated payment made before that final determination.

This distinction is important because CBP can continue reviewing the claim after Accelerated Payment has been issued.

At liquidation, CBP may:

• Confirm the amount previously paid
• Determine that additional drawback is due
• Determine that the Accelerated Payment exceeded the amount ultimately allowed

If too much drawback was paid, CBP can demand repayment of the excess. An excess amount not repaid within 30 days after liquidation becomes delinquent under the applicable regulations.

Why Do Companies Use Accelerated Payment?

The primary benefit is cash-flow timing.

Without Accelerated Payment, a claimant may need to wait for the normal liquidation process before receiving its refund. Accelerated Payment allows an approved claimant to receive estimated drawback earlier while the claim remains subject to final CBP liquidation.

For companies with significant recurring duty exposure, receiving refunds earlier can make duty drawback a more predictable part of cash-flow management.

Accelerated Payment does not increase the statutory refund. It changes when an eligible refund can be paid, not how much the claimant is entitled to recover.

Who Can Apply for Accelerated Payment?

A drawback claimant that intends to use Accelerated Payment can apply to CBP under 19 CFR § 190.92.

The application is submitted to the drawback office where the claimant's drawback claims will be filed. Current regulations allow the written application to be physically delivered or submitted by email.

CBP evaluates the applicant's proposed drawback program, compliance procedures, recordkeeping, bond coverage, and history of transactions with CBP before deciding whether to approve the request.

What Information Is Required in an Accelerated Payment Application?

The application must provide information about both the claimant and the drawback program.

Required information includes:

• Company name and address
• IRS number and suffix
• Person responsible for the drawback program
• Proposed bond coverage
• Surety information
• Initial bond amount
• Procedures for monitoring adequate bond coverage
• Description of merchandise or articles covered
• Drawback provisions to be used
• Estimated drawback value for the next 12 months
• Information concerning previous Accelerated Payment denials or revocations, if applicable

The claimant must also certify that it will comply with applicable statutory and regulatory drawback requirements.

Does CBP Require a Description of the Company's Drawback Program?

Yes.

The Accelerated Payment application must include a description of how the claimant intends to maintain compliance with drawback requirements.

The amount of detail expected can vary based on the size and complexity of the program. CBP specifically requires information concerning:

• The person responsible for oversight of the drawback program
• Compliance procedures and controls
• Recordkeeping procedures and retention practices
• Records that will be maintained
• Procedures for notifying CBP of program changes or compliance issues
• Procedures for conducting an annual review of the drawback program

The application must also include representative sample records. Depending on the program, these can include sample import, export, destruction, inventory, transportation, substitution, and manufacturing documentation.

Is a Bond Required for Accelerated Payment?

Yes.

An approved Accelerated Payment claimant must maintain a bond sufficient to cover the estimated drawback that will be claimed during the term of the bond.

The bond protects the government if Accelerated Payment is made and CBP later determines that some or all of the payment must be repaid.

If outstanding Accelerated Payment claims exceed the available bond coverage, CBP can require additional bond coverage before additional Accelerated Payments are made.

The claimant's application must therefore include procedures for monitoring whether its bond remains adequate as claim volume and refund amounts change.

How Long Does CBP Take to Review an Accelerated Payment Application?

Under 19 CFR § 190.92, CBP must notify the applicant in writing within 90 days of receiving the application of:

• Approval
• Denial
• Or CBP's inability to approve, deny, or otherwise act on the application within that period, along with the reason

CBP may request additional information, sample documents, or explanations while evaluating the application.

The 90-day provision therefore describes CBP's required notification period for the application. It should not be interpreted as a guarantee that every application will receive final approval within exactly 90 days.

What Does CBP Consider When Reviewing the Application?

CBP reviews and verifies the information provided by the applicant and can request additional supporting information.

The regulations identify several factors CBP may consider in reviewing the claimant's record of transactions with the agency, including:

• Unresolved duties, taxes, fees, or other debts owed to CBP
• Accuracy of prior drawback claims
• Prior revocation or suspension of Accelerated Payment or waiver of prior notice privileges

CBP also evaluates the procedures and records described in the application to determine whether the proposed drawback program supports compliance with applicable requirements.

Does Accelerated Payment Approval Apply to Every Type of Drawback?

An Accelerated Payment application identifies the drawback provision or provisions for which approval is being requested.

Companies with programs involving multiple drawback provisions should therefore make sure the application accurately reflects the types of claims they intend to file.

Accelerated Payment is generally available for drawback claims under 19 CFR Part 190 unless a particular claim is specifically excepted from the procedure.

Approval should not be interpreted as changing the underlying eligibility requirements for any particular drawback provision.

Can Accelerated Payment Apply to Claims Filed Before Approval?

Potentially, yes.

Current regulations provide that approval is effective on the date of CBP's written notification and that Accelerated Payment may be available for unliquidated drawback claims filed both before and after the approval date.

For a claim filed before approval, adequate bond coverage must be in place to cover the Accelerated Payment.

This can be relevant when a company begins filing drawback claims while its Accelerated Payment application is still under review.

How Quickly Is a Refund Paid After a Claim Is Filed?

There is not one regulatory payment timeframe that should be promised for every Accelerated Payment claim.

Accelerated Payment is designed to allow payment before liquidation, which can make refund receipt substantially earlier than waiting for the normal liquidation process. However, actual timing can depend on:

• Completeness of the claim
• Claim accuracy
• Bond coverage
• CBP review
• Questions or inconsistencies identified by CBP
• Other circumstances affecting claim processing

For that reason, companies should distinguish between the time required to obtain Accelerated Payment approval and the processing time for an individual claim after approval.

For a broader discussion of drawback timing, see How Long Does the Duty Drawback Process Take?

Does a Company Have to Reapply for Accelerated Payment for Every Claim?

No.

Accelerated Payment approval applies to the claimant's approved drawback program rather than requiring a new application for each individual claim.

Once approved, the claimant can request Accelerated Payment on qualifying drawback claims covered by the approval, provided the claimant continues to comply with applicable requirements and maintains adequate bond coverage.

The claimant must also maintain the procedures and annual compliance review described in its approved program.

Can CBP Revoke Accelerated Payment Approval?

Yes.

CBP may propose revocation for good cause, including noncompliance with drawback law or regulations.

If CBP proposes revocation, it must provide written notice stating the reasons and explaining the procedures available to challenge the proposed action. Unless successfully challenged, revocation generally takes effect 30 days after the proposed revocation notice.

Maintaining accurate claims, adequate records, appropriate bond coverage, and effective compliance controls is therefore important after approval as well as during the original application process.

What Happens If an Accelerated Payment Application Is Denied?

CBP must provide written notice explaining the grounds for denial, identify corrective action that may be taken, and explain the applicant's appeal rights.

The claimant generally cannot reapply until the reason for the denial has been resolved.

The regulations also provide procedures for appealing a denial or challenging a proposed revocation.

What Happens to Accelerated Payment Approval if the Company Changes Ownership?

Current regulations contain a limited successorship rule.

When all rights, privileges, duties, and liabilities of an approved claimant are transferred through a qualifying written agreement, merger, or corporate resolution, the predecessor's Accelerated Payment approval may remain effective for one year after the transfer.

The successor must apply for its own Accelerated Payment approval during that period if it wants the procedure to continue beyond the one-year transition. If the successor applies within the period, it may generally continue operating under the predecessor's approval while CBP evaluates the new application.

This can be important when a drawback claimant undergoes a merger, acquisition, or corporate restructuring.

What Is the Annual Review Requirement?

An Accelerated Payment applicant must describe procedures for conducting an annual review of its drawback program.

The purpose is to ensure that:

• The program continues to comply with applicable drawback requirements
• Records and procedures remain appropriate
• Changes to the drawback program are identified
• CBP is notified of modifications when required

This reinforces that Accelerated Payment is not simply a faster-refund mechanism. Approval depends in part on maintaining an ongoing compliance framework.

How Can J.M. Rodgers Help With Accelerated Payment?

J.M. Rodgers can incorporate Accelerated Payment into the setup and management of an eligible duty drawback program.

Depending on the client's circumstances, our team can assist with:

• Evaluating whether Accelerated Payment is appropriate for the program
• Preparing information needed for the application
• Documenting drawback procedures and controls
• Organizing sample supporting records
• Estimating anticipated drawback recovery
• Coordinating bond requirements
• Supporting responses to CBP questions
• Requesting Accelerated Payment on eligible claims after approval
• Monitoring the underlying drawback program
• Supporting ongoing compliance and CBP reviews

Accelerated Payment can be particularly valuable for companies with substantial recurring drawback recovery because it allows eligible refunds to be received before the claims reach final liquidation.

Next Steps

Companies establishing or expanding a duty drawback program should evaluate Accelerated Payment as part of the broader program design rather than treating it as an afterthought.

J.M. Rodgers can evaluate the anticipated refund volume, drawback methodology, documentation, compliance procedures, and bond requirements to determine how Accelerated Payment may fit into the program and assist with the application process.

Disclaimer

This information is general in nature and does not constitute legal advice. Accelerated Payment eligibility, application requirements, bond coverage, claim processing, approval, revocation, and payment timing depend on the claimant's specific drawback program and current CBP requirements.