March 10, 2025

What is Duty Drawback?

According to U.S. Customs and Border Protection, Drawback is the refund of certain duties, internal revenue taxes, and certain fees collected upon importing goods. Such refunds are only allowed upon the exportation or destruction of goods under U.S. Customs and Border Protection supervision. Duty Drawback is an incentive scheme that allows importers, exporters, and manufacturers the opportunity to recover customs duties in the United States.

Customs Drawback for U.S. imports - Three Key Areas

Manufacturing drawback (must be claimed within 5 years from the import date)

The Drawback might be claimed on an exported article under Customs Law in the United States if the article was manufactured using the importer’s material or components. Also, substituting domestically produced merchandise of the same kind and quality as imported duty-paid merchandise is allowed.

Unused merchandise (must be claimed within 5 years from the import date)

Unused Merchandise Drawback may be claimed on duty paid merchandise that is exported from the United States - provided that the merchandise has not been used in the United States.

Rejected Merchandise (must be claimed within 5 years from the import date)

Customs Law provides for duty drawback on merchandise which does not conform to sample or specification if exported under Customs supervision.

What are the benefits of Duty Drawback?

There are several benefits to looking into the Duty Drawback process for your organization, as it not only increases company revenue and improves cash flow but can equally enhance a company’s ability to be one step ahead of the competition.

Did you know that a company can retroactively claim drawback on exports shipped?
The Duty Drawback is payable to the exporter or destroyer of the imported articles. The exporter or destroyer may legally waive those rights to an importer or any intermediate party.

For all the latest news on Duty Drawback and to learn more about the customs drawback scheme get in touch, you can also read all our Trade Advisory updates 

Maximize your duty drawback with the experts

Our Automotive client was heavily impacted by Section 301 tariffs, which have been applied to imports into the United States of America on automotive parts sourced from China.

The significant increase in purchasing costs became a financial burden to the client, impacting not only cash flow but also bottom-line results. Read our case study here

Your Step-by-Step Guide to secure U.S. Duty Drawback

Step 1: Understand the Eligibility Criteria for Duty Drawback

Before starting the claim process, ensure your goods are eligible for Duty Drawback. The main criteria include: Exporter, Importer, Manufacturer, or Producer – with proper authorization and documentation. 

• Proper Documentation: You must have proper records of your import and export transactions.  
• Timely Filing: You must file duty drawback claims within a specific time frame. This is usually 5 years from the date you imported the goods. 

Step 2: Gather Required Documentation 

To make a duty drawback claim in the United States, you’ll need to provide various documents, including: 

• Import Entry Documentation  
• Export Documentation  
• Inventory/Manufacturing Inventory Movements  
• Part Number Level Data 

 These documents help establish a clear trail from importation to exportation. 

Step 3: Choose the Correct Type of Duty Drawback 

Typically, four major categories of types of duty drawback programs exist, and you need to select the one that fits your case: 

1. Unused Substitution  
2. Unused Direct ID  
3. Manufacturing Substitution  
4. Manufacturing Direct ID 

Ensure you understand which category your goods fall under before proceeding with your claim. 

Step 4: Complete the Duty Drawback Application 

To make your application in the United States,, you would use the CBP Form 7551 (or other relevant forms depending on the type of drawback). 

You will need to: 

• Fill out the form with accurate details about the goods being exported, the duties paid, and other relevant information.  
• Make sure to attach all the required documents.  
• Verify the form for accuracy to avoid delays or rejections. 

Tip: You can work with Crane Worldwide Logistics to ensure all paperwork is accurate and complete, get in touch. 

Step 5: Submit the Claim to Customs 

Once the application is complete, submit your application to customs authority for processing.  

Step 6: Keep Records for Future Claims 

Even after receiving your duty drawback, it's important to maintain accurate records of the entire process for future reference. These records will help streamline future claims and ensure compliance with customs regulations. 

Keep the following records: 

• Import and export documentation 
• Duty drawback claims and any correspondence with customs  
• Copies of refund checks or statements  

Maximize your Duty Drawback savings with the experts

At Crane Worldwide Logistics, we offer expert assistance in navigating the complexities of international trade and customs processes. Our team can help you: 

• Determine eligibility for duty drawback  
• Gather and prepare necessary documentation  
• File claims accurately and efficiently  
• Track the progress of your claim 

Contact Our Experts today. Crane Worldwide can help you simplify your duty drawback process. Ensure you receive the reimbursements you deserve at minimal cost.