How Do You Start a Duty Drawback Program With J.M. Rodgers?

Starting a duty drawback program begins with understanding how merchandise and duties move through the company's supply chain. J.M. Rodgers evaluates import, export, manufacturing, purchasing, inventory, and other relevant activity to determine whether drawback opportunities exist and which methodology may be appropriate.

A company does not need to have every eventual claim document organized before beginning an evaluation. The initial objective is to understand the potential opportunity, identify the data and records available, determine what additional information may be needed, and develop a practical path toward filing compliant claims.

What Is the First Step in Starting a Drawback Program?

The first step is an initial opportunity assessment.

J.M. Rodgers works with the company to understand areas such as:

What merchandise the company imports
What duties and tariffs it pays
Whether merchandise or finished products are exported
Whether imported materials are used in U.S. manufacturing
Whether the company purchases duty-paid merchandise domestically
Whether customers export products purchased from the company
Whether merchandise is returned, rejected, or destroyed
Whether the company already files drawback
What import, export, inventory, and manufacturing data is available

This initial review helps determine whether there appears to be a viable drawback opportunity and which parts of the company's operations warrant deeper analysis.

What Data Does J.M. Rodgers Need to Begin an Evaluation?

An initial evaluation does not necessarily require the complete documentation package that will ultimately support a filed claim.

Useful starting information may include:

Import entry data
Annual duty and tariff spend
Export data
Product and part-number information
HTSUS classifications
Manufacturing information
Bills of material, when applicable
Domestic purchasing activity
Supplier information
Customer export activity
Existing drawback claim information, if applicable

J.M. Rodgers can use available data to identify potential transaction relationships and determine what additional information is needed before a claim can be prepared.

The next Knowledge Base article, What Data Does J.M. Rodgers Need to Evaluate a Duty Drawback Program?, will address these requirements in greater detail.

How Does J.M. Rodgers Determine the Appropriate Drawback Methodology?

Once the basic supply chain is understood, J.M. Rodgers evaluates which drawback provision and methodology may apply.

Depending on the company's activity, potential methodologies can include:

Direct Identification Manufacturing Drawback under 19 U.S.C. § 1313(a)
Substitution Manufacturing Drawback under § 1313(b)
Rejected Merchandise Drawback under § 1313(c)
Direct Identification Unused Merchandise Drawback under § 1313(j)(1)
Substitution Unused Merchandise Drawback under § 1313(j)(2)
Other specialized drawback provisions when applicable

The appropriate methodology depends on factors such as merchandise classification, manufacturing activity, inventory relationships, possession, transfers between parties, available documentation, and how the merchandise is ultimately exported or destroyed.

J.M. Rodgers may also identify more than one potential drawback pathway within the same company.

Does Every Company Need CBP Approval Before Filing Drawback?

No.

The regulatory setup depends on the type of drawback being claimed.

For manufacturing drawback, the manufacturer or producer generally must operate under an applicable general manufacturing drawback ruling or obtain a specific manufacturing drawback ruling. A manufacturer whose operation falls within a published general ruling can notify CBP of its intent to operate under that ruling. If the operation varies from an applicable general ruling, a specific manufacturing drawback ruling may be required.

Other drawback programs may not require the same manufacturing ruling process.

J.M. Rodgers evaluates the applicable regulatory requirements during program setup and helps determine what CBP applications, notifications, rulings, or other procedures are necessary for the particular program.

How Are Historical Drawback Opportunities Handled?

A new drawback program should generally evaluate both historical recovery and ongoing recovery.

Historical analysis can identify qualifying transactions that occurred before the program was established but remain within the applicable statutory filing period.

J.M. Rodgers may review:

Older imports
Prior exports
Historical manufacturing activity
Domestic purchases
Customer exports
Product lines not previously evaluated
Previously unclaimed duties or eligible tariffs

Transactions approaching their statutory deadlines can be prioritized so potential recovery is not lost while the broader program is being implemented.

For more information, see How Far Back Can You Claim Duty Drawback?

How Does J.M. Rodgers Set Up the Data Process?

Once the methodology is defined, J.M. Rodgers works with the client to determine how the data required for recurring drawback claims will be provided and processed.

Depending on the program, this can involve mapping information from:

Import data
Export systems
ERP systems
Inventory records
Manufacturing systems
Bills of material
Purchasing records
Supplier data
Customer export records

J.M. Rodgers uses proprietary drawback technology to process and analyze transaction data according to the applicable claim methodology.

The objective is to create a repeatable process rather than reconstructing the entire program manually for every filing.

What Does the Client Need to Do During Setup?

J.M. Rodgers manages the technical drawback process, but client participation is important because the company controls much of the underlying business information.

Clients may be asked to:

Identify appropriate internal contacts
Provide requested import, export, and other transaction data
Explain product and supply-chain relationships
Provide manufacturing information when applicable
Help identify suppliers or customers involved in relevant transactions
Provide or obtain supporting business records
Clarify data discrepancies
Confirm business processes and assumptions
Notify J.M. Rodgers when material business processes change

Depending on the company, information may involve trade compliance, logistics, finance, manufacturing, purchasing, information technology, or other departments.

A clear internal point of contact can help make the implementation process more efficient.

Does a Company Need Perfect Data Before Starting?

No.

A company can begin evaluating drawback even when its data or documentation is not yet fully organized.

One purpose of the initial assessment is to identify:

What information is available
Where relevant data is stored
Which records can support potential claims
What information is missing
Whether missing information can be obtained
What processes may need to be established going forward

However, identifying a potential opportunity is different from substantiating a filed claim. Before drawback is ultimately claimed, the applicable eligibility, calculation, documentation, and recordkeeping requirements must be satisfied.

A documentation gap therefore does not necessarily end the evaluation, but it may need to be resolved before affected transactions can be included in a claim.

How Is the First Drawback Claim Prepared?

After the methodology, data, and documentation process are established, J.M. Rodgers can begin preparing the claim population.

Depending on the program, this can involve:

Identifying qualifying import transactions.
Identifying qualifying exports or destruction.
Applying the appropriate direct identification or substitution methodology.
Incorporating manufacturing information when applicable.
Evaluating merchandise transfers and drawback rights.
Calculating eligible duties, taxes, fees, and tariffs.
Reviewing supporting documentation.
Conducting internal claim review.
Preparing the electronic drawback entry.
Filing the claim with CBP.

The exact workflow varies because manufacturing, unused merchandise, rejected merchandise, and other programs have different requirements.

Can Accelerated Payment Be Set Up With the Program?

Yes, when appropriate.

Accelerated Payment allows an approved claimant to receive estimated drawback before final liquidation of the drawback entry. It requires a separate application and adequate bond coverage.

The application includes information about the claimant, expected drawback activity, merchandise, applicable drawback provisions, compliance procedures, recordkeeping, internal controls, and anticipated bond coverage. CBP must notify the applicant within 90 days of receiving the application whether it approves or denies it, or whether it is unable to act within that period and why.

J.M. Rodgers can help evaluate whether Accelerated Payment makes sense for the program and assist with the application and related setup.

For more information, see What Is Accelerated Payment for Duty Drawback?

What Happens After the First Claim Is Filed?

A drawback program does not end with the first filing.

Once the initial process is established, J.M. Rodgers can manage ongoing claim cycles using new qualifying transaction data.

Ongoing program management may include:

Processing new imports and exports
Preparing recurring claims
Reviewing claim data
Monitoring claim status
Supporting CBP requests
Maintaining documentation
Updating methodology as business activity changes
Evaluating new products and suppliers
Reviewing customer export activity
Evaluating new tariffs or duty exposure
Identifying additional recovery opportunities

This allows the drawback program to evolve with the client's business rather than remaining limited to the transactions identified during initial setup.

How Long Does It Take to Start a Duty Drawback Program?

There is no single implementation timeline.

A relatively straightforward unused merchandise program with organized electronic data may require less setup than a manufacturing program involving several facilities, complex bills of material, multiple data systems, substitution, or historical transactions.

Timing can also be affected by:

Data availability
Documentation quality
Number of products
Transaction volume
Manufacturing complexity
Required CBP rulings
Accelerated Payment setup
Bond arrangements
Historical claims approaching deadlines

J.M. Rodgers evaluates these factors before determining what will be required to implement a particular program.

For more information, see How Long Does the Duty Drawback Process Take?

What Size Drawback Programs Does J.M. Rodgers Typically Work With?

There is no statutory minimum refund amount required to qualify for duty drawback.

From a service-fit perspective, J.M. Rodgers generally focuses on standalone duty drawback programs with approximately $100,000 or more in estimated annual recovery because the value of the program needs to justify the data, compliance, and administrative work involved.

That is not an absolute minimum. A lower-recovery drawback program may still be a good fit when it is part of a broader relationship with J.M. Rodgers, such as customs brokerage or complementary trade services.

The potential recovery, complexity, available data, and overall relationship should be evaluated together rather than using refund value as the only criterion.

What If the Company Already Has a Drawback Program?

A company does not necessarily need to be new to drawback to work with J.M. Rodgers.

An existing program can be evaluated to determine:

Which drawback methodologies are currently being used
Whether qualifying activity may be missing
How historical claims have been handled
What data and documentation processes are already in place
Whether the current program can be transitioned
What outstanding claims or CBP matters exist

Transitioning an existing program requires additional planning so claim continuity, documentation, historical records, regulatory approvals, and outstanding activity are properly addressed.

For more information, see Can J.M. Rodgers Take Over an Existing Duty Drawback Program?

Next Steps

The first step in starting a duty drawback program with J.M. Rodgers is to determine whether a meaningful recovery opportunity exists and understand the data and transaction relationships behind it.

J.M. Rodgers can evaluate available import, export, manufacturing, supplier, customer, and duty information to identify potential eligibility, estimate recovery, determine the appropriate methodology, and outline what would be required to establish the program.

A company does not need to build the drawback program on its own before beginning that conversation. The initial evaluation is intended to determine what the program should look like.

Disclaimer

This information is general in nature and does not constitute legal advice. Duty drawback program requirements, methodologies, CBP applications, documentation, filing procedures, and potential recovery depend on the specific merchandise, transactions, business processes, and applicable regulations.