How to set up duty drawback tracking

What is duty drawback and why it matters

Duty drawback is a refund of customs duties, taxes, and fees paid on imported goods that are subsequently exported or destroyed. Under U.S. law (19 U.S.C. 1313), importers can recover up to 99% of duties paid. For companies with significant import and export volumes, duty drawback can represent millions of dollars in recoverable costs that many businesses leave on the table.

Step 1: Determine your drawback eligibility

Before configuring TIM for drawback tracking, determine which type of drawback applies to your operations. The three main types are: manufacturing drawback (imported materials used to produce exported goods), unused merchandise drawback (imported goods exported in the same condition), and substitution drawback (domestically sourced goods substituted for imported goods).

• Manufacturing drawback: You import raw materials, manufacture products, and export the finished goods
• Unused merchandise drawback: You import goods and re-export them without use in the United States
• Substitution drawback: You import goods and export commercially interchangeable domestic goods

Step 2: Configure drawback profiles in TIM

In TIM, navigate to Settings and select Duty Drawback. Create a new drawback profile by specifying the type of drawback, the HTS codes of your imported materials, and the Schedule B codes of your exported products. TIM will use this profile to automatically identify potential drawback opportunities.

1. Open TIM and navigate to Settings > Duty Drawback
2. Click 'Create drawback profile'
3. Select the drawback type: Manufacturing, Unused, or Substitution
4. Enter the HTS codes of your imported goods
5. Enter the Schedule B codes of your exported products
6. Define the manufacturing yield or conversion ratio if applicable
7. Save the profile

Step 3: Link import and export entries

TIM can automatically match import entries to export entries based on your drawback profile. For manufacturing drawback, the system tracks the materials from import through production to export. For unused merchandise, it matches the same product imported and exported. Review the automatic matches and confirm or adjust them.

Step 4: Calculate potential recovery

Once import and export entries are linked, TIM calculates the potential duty recovery for each matched set. The calculation considers the duties paid on the import entry, the applicable drawback rate (typically 99%), and any exclusions or limitations. The dashboard shows both individual and aggregate recovery amounts.

Step 5: Generate drawback claims

When you are ready to file, TIM generates the drawback claim documentation in the format required by CBP. This includes the drawback entry (CBP Form 7551), the certificate of manufacturing or certificate of delivery, and all supporting import and export documentation.

1. Select the matched entries you want to include in the claim
2. Click 'Generate drawback claim'
3. Review the auto-populated CBP Form 7551
4. Verify the duty amounts and calculations
5. Attach any required supporting documents
6. Submit the claim through TIM or download for manual filing

Step 6: Monitor claim status

After filing, track the status of your drawback claims in TIM's drawback dashboard. CBP typically processes claims within 3 to 6 months. TIM will notify you when a claim is approved, when additional documentation is requested, or when a claim is denied so you can take corrective action.

Best practices for maximizing drawback recovery

• File claims regularly rather than letting them accumulate
• Maintain accurate and detailed records of all imports and exports
• Review TIM's unmatched entries report monthly to identify missed opportunities
• Consider substitution drawback if you use both imported and domestic materials
• Work with your customs broker to ensure all entries are properly classified