Duty drawback is a customs refund programme that allows eligible importers, exporters, or manufacturers to recover duties, taxes, or fees paid on imported goods that are later exported, destroyed, or used in exported products. In the United States, drawback can allow recovery of up to 99% of certain paid duties when requirements are met. Duty drawback helps companies reduce landed costs, improve cash flow, and avoid paying final import duty on goods that do not remain in the domestic market.
Duty drawback is the refund of customs duties, taxes, and fees paid on imported goods that are subsequently exported or destroyed. It is one of the most valuable trade cost recovery programs available to U.S. manufacturers and exporters.
Types of Duty Drawback
- Manufacturing drawback: duties refunded when imported materials are used to produce goods that are then exported
- Unused merchandise drawback: duties refunded when imported goods are exported without modification
- Rejected merchandise drawback: duties refunded on goods returned to the foreign supplier
How to File
- Claims must be filed within five years of the original import entry
- CBP refunds up to 99 percent of duties paid
- Claims require detailed record-keeping of imports, production, and exports
For related logistics context, see Dedola’s aftermarket auto parts logistics and glossary entries on Customs Entry, CBP, In-Bond Shipment, and First Sale Valuation.
