Trade Remedies & Import Compliance
Duty Drawback
Also known as: Drawback
Duty drawback is a refund mechanism that returns most of the customs duties, taxes, and certain fees paid on imported goods when those goods, or articles manufactured from them, are subsequently exported or destroyed. By recovering duty on inputs that ultimately leave the country, drawback restores the competitiveness of exporters and prevents domestic value-adders from being penalized for using imported materials. Programs typically cover unused merchandise, rejected goods, and manufacturing drawback, each with its own documentation and recordkeeping demands, and because claims can reach back over multiple years the potential recoveries are often substantial for high-volume traders.
Real money left on the table, usually because it looks administratively daunting. Import, then export the same goods or goods made from them, and drawback returns 99% of the ordinary duty and of Section 301 duty. Section 232 duty is carved out and is not refundable — for a metals importer that is most of the bill, and the difference is worth establishing before you build a program around it.
Where it matters for compliance
- Claims are subject to statutory time limits running from importation.
- Direct-identification claims need an evidenced link between the imported article and the exported one. Substitution claims match at the 8-digit tariff level instead, with no physical link. Either way it is a records exercise.
Related terms
Reviewed by a licensed customs broker. Definitions are general information, not legal or customs advice for a particular shipment. Duty rates, tariff programs and agency requirements change frequently.