Tariff & Customs Regulations Specialists

By Jill LaMadeleine 14 Dec, 2017

The Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA), went into law on February 24, 2016. The TFTEA amends drawback rules and removes some of the constraints on substitution drawback and overall makes filing easier. Essentially, it eliminates the “commercially interchangeable” standard for substitution and allows for filing drawback for any items classified under the same eight-digit tariff code. After several postponements, deployment is scheduled for February 24, 2018.

As we have been waiting for the Secretary of the Treasury and CBP to release the new regulations pertaining to TFTEA, ITM remains very active with the American Association of Exporters and Importers (AAEI) and NCBFFA Drawback Committees that are working with Customs. In fact, we participated in a meeting just this week.

While the implementation of TFTEA looms, there is very little information available from Customs about how the Regulations will be altered, the implementation of the changes necessary in the Automated Commercial Environment (ACE) system and how the process will specifically function.

ITM has have been following the developments closely, and while nothing is formal, there have been many inferences and suggestions as to what we can expect.

Using only the data available in ACE, U.S. Customs will not have access to specific invoice information. With the elimination of this data, they have proposed an implementation of an average price per line item being used as the unit price. This opens up a lot for discussion since an importer can bring many things in under the same HTS with significantly varying unit prices. Using the average will allow you to file with information available on ACE, but may award you substantially less or significantly more drawback to which you are entitled.

Further, there is discussion that TFTEA drawback will not allow the use of line items from entries that were used in claims prior to TFTEA. The elimination of certain data from inclusion in claims could not only present an accounting issue for some drawback filers and/or their providers but could also significantly affect drawback returns.

It is imperative that companies make preparations for the pending implementation of the changes, even though we remain unsure as to what they will specifically entail. ITM has already started to make accommodations based on the frequent meetings with the Drawback Committees and the limited information that has been provided by Customs. We are prepared to continue filings for our existing clients as well as help new ones navigate the changes without missing a beat.

Contact us now if you would like to ensure a smooth transition to TFTEA drawback or are interested in getting a program up and running under the new and more flexible standards.

By Jill LaMadeleine 13 Sep, 2017
Did you hear that Customs is simplifying the duty drawback regulations? Have you avoided starting a program because it’s too complicated, too frustrating or just too much work?

Effective February 24, 2018, it will be easier and less time consuming to file duty drawback. The new legislation:
  • Will rely upon the Harmonized Tariff Schedule Number (HTS number)
  • Eliminates the concept of commercial interchangeability entirely
  • Includes a provision that allows a claimant to file under the existing law during a one year transition period (until February 23, 2019)
For a free evaluation to determine if your company can share in the $2,000,000 that’s left unclaimed every year, contact us today !

Not Familiar with Duty Drawback? 
By Tracy Hudak 25 May, 2017
Join us on June 8th @ 2:00 pm (ET) for our new 20-minute webinar: Free Trade Agreements. In this informative webinar, Tracy Hudak will show you how to take full advantage of Free Trade Agreements.
By Jill LaMadeleine 01 Mar, 2017
Utilizing the benefits associated with Free Trade Agreements (FTA’s), is one of the best ways for U.S. exporters to sell their goods and services in foreign markets. Because there are fewer trade barriers, FTA’s enable U.S. companies to compete internationally. According to the International Trade Administration, 47% of U.S. goods that were exported in 2015 went to FTA partner countries. Those exports totaled $710 billion dollars. Many companies do not take advantage of the savings afforded them by participating in trade with FTA countries because they (1) are not aware of them, (2) do not understand them, or (3) do not have the resources to implement them.

Step 1:  In order to benefit from what a FTA has to offer, one must first know which countries actively participate in free trade with the U.S. To determine which FTA’s are currently in effect, click on the free trade agreement website link below where you can find a complete listing.

Step 2:  Understanding the details of a FTA is difficult. In order to take advantage of these agreements and benefit from the reduced duty payment, one must first understand the regulations and then perform the necessary qualification determination. This analysis begins with an understanding of the Harmonized Tariff Schedule (HTS), to ensure that the goods are properly classified.

Step 3:  Once the goods have been classified, the exporter must determine and understand the rules by which the good will qualify under the appropriate Harmonized Tariff heading. The qualification will involve either a tariff shift ( going from one HTS number to another as the result of a manufacturing process ), a determination of regional value content ( how much value is added during the manufacturing process ), or a combination of both.

Most companies do not have the resources or the expertise to do the proper free trade analysis. Often companies will fill out the certificates of origin without a complete understanding of the rules and regulations. This can result in a Custom’s audit (by U.S. Customs or the Customs Officials of the country you are exporting to), a possible imposition of penalties and ultimately a disruption in your exporting and/or importing pattern.

These potential issues should not stop you from taking advantage of all that a FTA has to offer. For over 30 years, ITM has been helping companies save millions of dollars while ensuring complete compliance. The experienced staff at ITM has a vast knowledge of the Regulations and extensive experience with various FTA’s across a diverse variety of industries. We can help you navigate the process with minimal effort on your part.

Contact us at for a no cost analysis of your situation and a solid proposal to start saving you money.
By Jill LaMadeleine 27 Dec, 2016

  1. The first thing you will need to determine is the last time your imports were classified according to the Harmonized Tariff Schedule of the United States (HTSUS). Even though the HTSUS does not frequently change, U.S. Customs and Border Protection does issue rulings almost every day that can directly affect the classification and duty rates of imported merchandise.

  2. Perhaps simultaneously, you need to determine who did the classification of your imports. The classification of imported merchandise is very complex. It requires the cooperative effort of people that have technical knowledge of your merchandise as well as people that understand the HTSUS. Too often either the technical people classify the merchandise without expert knowledge of the HTSUS or your import broker does the classification without extensive knowledge of the merchandise.

  3. The classification of imported merchandise is more of an art than a science. It is very seldom that the exact parameters of your merchandise will be defined in the tariff. The determination of the correct tariff is not black or white but usually lies within the gray area. Rulings must be carefully checked, the explanatory notes (international guidelines) must be reviewed, and all technical aspects of the merchandise known.

Our experience has shown that about 90% of the merchandise imported into the United States is classified properly. This is because most of the importers are aware of the 3 key points mentioned above and do what’s necessary to minimize their duty obligations. In the other 10% of the cases, where the merchandise is misclassified, the importer is most likely paying more duty than is necessary. Under the law, it is the importers responsibility to classify their merchandise but most of them leave that task to their customs broker. The broker usually does not spend the time and/or does not have the technical ability to make the proper determination. In order to assess your situation, contact International Tariff Management and we will conduct a contingency based audit to help you possibly minimize your duty obligation.

By Jill LaMadeleine 30 Nov, 2016
The first thing you need to do is evaluate the connection between your imports and your exports. On a macro scale, you will need to determine the amount of duty you pay per year on imports (e.g. $250,000). Next, identify what percentage of your total sales is exported (e.g. 10%). Now multiply the percentage of exports times the amount of duty paid per year on imports, you will get a ball park estimate of your duty drawback recovery potential ($25,000 per year in this example). Of course every import is not exported, but this is a good calculation to use in order to establish a general starting point. The duty drawback regulations allow a claimant to go back 3 years when claiming drawback on exports, so using the example above this company would get an initial potential recovery of $75,000.

If after using the calculation method above, you find that pursuing a duty drawback program seems viable, the next aspect for consideration is the clarification of the exporter of record. By law, the exporter of record is the party entitled to claim duty drawback. If you are not the exporter of record, those rights can be transferred back to you by the exporter of record, but this is an additional step that warrants consideration.

The third point to assess is your company’s import history and available supporting documentation. You need not be the direct importer in order to claim duty drawback. If you obtain imported merchandise from a domestic third party, you can use that material in a duty drawback program by obtaining certificates of delivery. Again, this is an additional step in the process, one in which can be simplified by acquiring the services of a duty drawback professional.

Once you have determined that you have a viable duty drawback program, a potential claimant will need to obtain permission from U.S. Customs and Border Protection in order to file the duty drawback claims. These permission letters include accelerated payment, waiver of prior notice, and in the case of a manufacturing process, a specific or general drawback ruling. When the applications have been filed with Customs, the duty drawback claims can then be submitted. It is imperative that a claimant files the older exports first, most importantly because you will begin to lose the ability to claim them once you exceed the statutory 3-year period. Once your applications are approved, payment should be received from Customs in approximately 30 days.
By Tracy Hudak 18 Aug, 2016

In this informative webinar, Tracy Hudak will introduce you to the concept of Drawback and how to use it to get money back from the U.S. government.

By Jill LaMadeleine 16 May, 2016
Is this a pen or is it a chemical product?
More Posts

Contact Us

Request An Evaluation
Share by: