Where do we stand with TFTEA

The deadline for the implementation of the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA), is looming. Two years in the works, the final transition to TFTEA is set to occur on February 24, 2019.
Customs has maintained that the ultimate goal of TFTEA is to streamline and simplify the drawback process. At this time, there are no formal regulations in effect, but the guidelines have been released and reviewed extensively by the trade. After much conversation and deliberation, the trade was allowed and has formally submitted a response to Customs on these proposed regulations and now waits the allotted 90 days to find out how they have been received and what the final determinations will be.
While the initial overall plan with TFTEA was to file duty drawback using the HTS number (and eliminating the part number), it would appear that it may not be that easy after all.
For unused direct identification drawback, the proposed guidelines make reference to using an indicator in addition to the HTS number. It is our belief that this indicator will or can be the part number. Therefore, it would seem that we will still require the same data as before and continue to prepare the unused direct identification claims in essentially the same way with possibly some minor tweaks.

As for unused substitution and manufacturing drawback, that indicator does not come into play. As we transition to filing drawback according to the HTS number, as outlined in the current guidelines, we will potentially be restricted with entries that can be used. As currently written, entries that are used to file CORE claims (pre-TFTEA), are restricted or disallowed when it comes to TFTEA.
Also, we are led to believe that for unused substitution and manufacturing drawback, a claimant will need to consider not only the average value of the items on the line of the entry, but also the corresponding export value. They will need to use the “lesser of” the two when claiming drawback in order to not overclaim. The regulations will clarify these restriction and parameters. In the meantime, we are aware of the possibilities and planning accordingly.
While the guidelines provided a good sense of what we can expect with the regulations, until they are finalized and released we will not know for certain. As we continue to be involved in monthly teleconferences and conversations, ITM is fully prepared for the final implantation of TFTEA on February 24, 2019. Contact ITM today with any questions or concerns regarding TFTEA.