What is a specific manufacturing drawback?
- Unless a company is manufacturing, goods produced using the eleven imported materials specified in the General Manufacturing Drawback regulations, a manufacturer or producer of articles intended to be claimed for drawback shall apply for a Specific Manufacturing Drawback ruling.
- The contents of that application are specified in 19 CFR Section 191.8 with an example appearing in Appendix B of Section 191. This customs broker will prepare this application in consultation with the applicant company.
- The application includes such information as identity of the applicant, a description of the nature of applicant’s business, and a description of the manufacturing process. With respect to chemical manufacturing, this description must contain detailed information as to the exact chemical processes and reactions occurring at each phase of the manufacturing process.
- Descriptions of both the imported merchandise, with specifications and a description of the exported merchandise.
- A summary description of the records to be kept and the identity and address of the record keeper. It is critical that the inventory records be accurate and complete. At some point Customs and Border Protection will be conducting an audit of company records to support the drawback claims.
- After approval to operate a Specific Manufacturing Drawback program, drawback claims will be prepared and filed periodically by this Customs Broker and submitted to CBP for payment of claims.
- In conjunction with making application to operate a Specific Manufacturing Drawback program, an application to receive accelerated payment of drawback claim will be prepared and filed in the CBP Drawback Office. If approved, this will provide for payment of drawback within four to six weeks. Liquidation of each claim will take almost one year, so without accelerated payment approval, receipt of drawback payments could be delayed.
- Accelerated drawback payment requires a Customs Surety Bond in the amount of expected claim amounts for a one-year period. This Customs Broker will attend to the details of securing the bond and placing it on file with CBP.
- A manufacturing company participating in either form of Manufacturing Drawback should consider, at some point, participation in the Drawback Compliance Program. The drawback manufacturing company must demonstrate an understanding off the legal requirements of preparation of claims, the nature of the records produced and required to be maintained to substantiate claims. The advantage of participation is that if anon fraudulent error occurs or repeated violations, in lieu of monetary penalty, a written notification of violation will be issued. This Customs Broker will make application and insure that appropriate employees are completely advised of the requirements of this program.