What is Duty Drawback?

What Is Duty Drawback?

Duty drawback is a refund program administered by U.S. Customs and Border Protection (CBP). When a company imports merchandise and pays duties or tariffs, it may be eligible to recover up to 99 percent of those payments if:

The goods are exported
The goods are destroyed under Customs supervision
Imported materials are used to manufacture products that are exported

The program exists to promote U.S. exports and maintain global competitiveness.

How Much Can Be Recovered?

Eligible companies can recover up to 99 percent of:

Section 301 tariffs
Section 232 tariffs
Most standard import duties
Merchandise Processing Fees in certain cases

The potential financial impact is significant, especially for high-volume importers.

How Far Back Can You File?

Companies can file duty drawback claims retroactively for exports made within the past five years from the date of export. This means many companies may have substantial unclaimed refunds.

Who Qualifies for Duty Drawback?

Companies may qualify if they:

Import goods and later export them
Manufacture products in the U.S. using imported materials and export the finished goods
Purchase duty-paid goods domestically that are later exported
Destroy imported goods under Customs supervision

Manufacturers, distributors, petroleum refiners, and global suppliers commonly qualify.

Types of Duty Drawback

Manufacturing Drawback

Available when imported materials are used in the manufacture of exported products. Can be filed under Substitution or Direct Identification methodologies.

Unused Merchandise Drawback

Applies when imported goods are exported in the same condition, without being used in the U.S.

Destruction Drawback

Available when imported goods are destroyed under CBP supervision rather than exported.

Finished Petroleum Derivatives Drawback

Applies to certain petroleum-based exports under specific regulatory frameworks.

Why Is Duty Drawback Complex?

Duty drawback requires:

Accurate import and export matching
Bills of material and production records
Compliance with strict CBP timelines
Proper classification and substitution methodology
Audit-ready documentation

Errors can result in claim rejection, delays, or increased audit scrutiny.

How J.M. Rodgers Maximizes Duty Drawback Refunds

J.M. Rodgers has been in business since 1952 and operates under ISO 9001:2015 certification within a Continuous Process Improvement environment.

Our approach includes:

Proprietary, in-house drawback software capable of handling complex claims
Internal audit procedures that mirror CBP Desk Reviews
Deep supply chain analysis to identify refund opportunities, including domestic supplier programs
Electronic filing and monitoring of all claims
Dedicated drawback specialists led by licensed customs brokers
Full audit support during CBP reviews at no additional fee

We systematically evaluate import data, export records, product lines, and electronic documentation to develop and execute a customized drawback program for each client.

How Long Does the Process Take?

The timeline depends on claim type and documentation quality. Once data integration and methodology are established, claims can be filed on a recurring basis. J.M. Rodgers provides customized reporting, including monthly reporting by drawback type and aggregate recovery metrics.

Is Duty Drawback Worth It?

For companies paying significant tariffs or duties, drawback can materially reduce the cost of goods sold and improve cash flow. Many companies are unaware that they qualify or underestimate the size of potential refunds.

If you are unsure whether your company qualifies, J.M. Rodgers offers a complimentary evaluation to assess eligibility and refund potential.

Next Steps

To determine whether your company qualifies for duty drawback recovery, contact J.M. Rodgers for a confidential assessment.

Disclaimer

This information is general in nature and does not constitute legal advice. Duty drawback eligibility depends on specific facts and documentation.

What is Duty Drawback?

Duty drawback is a U.S. Customs program that allows companies to recover up to 99 percent of duties, taxes, and certain fees paid on imported goods when those goods are later exported or destroyed. It is one of the most powerful mechanisms available to offset tariff exposure and reduce landed cost.