Sec. 906. DRAWBACK AND REFUNDS
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## SEC. 906 DRAWBACK AND REFUNDS ###
(a)Articles Made From Imported Merchandise Section 313(a) of the Tariff Act of 1930 (19 U.S.C. 1313(a)) is amended by striking “the full amount of the duties paid upon the merchandise so used shall be refunded as drawback, less 1 per centum of such duties, except that such” and inserting “an amount calculated pursuant to regulations prescribed by the Secretary of the Treasury under subsection
(l)shall be refunded as drawback, except that”. ###
(b)Substitution for Drawback Purposes Section 313(b) of the Tariff Act of 1930 (19 U.S.C. 1313(b)) is amended— ####
(1)by striking “ If imported ” and inserting the following: > > #### “(1) In general > > If imported” > ; ####
(2)by striking “and any other merchandise (whether imported or domestic) of the same kind and quality are” and inserting “or merchandise classifiable under the same 8-digit HTS subheading number as such imported merchandise is”; ####
(3)by striking “three years” and inserting “5 years”; ####
(4)by striking “the receipt of such imported merchandise by the manufacturer or producer of such articles” and inserting “the date of importation of such imported merchandise”; ####
(5)by striking “an amount of drawback equal to” and all that follows through the end period and inserting “an amount calculated pursuant to regulations prescribed by the Secretary of the Treasury under subsection (l), but only if those articles have not been used prior to such exportation or destruction.”; and ####
(6)by adding at the end the following: > > #### “(2) Requirements relating to transfer of merchandise > > > ##### “(A) Manufacturers and producers > > Drawback shall be allowed under paragraph
(1)with respect to an article manufactured or produced using imported merchandise or other merchandise classifiable under the same 8-digit HTS subheading number as such imported merchandise only if the manufacturer or producer of the article received such imported merchandise or such other merchandise, directly or indirectly, from the importer. > > > ##### “(B) Exporters and destroyers > > Drawback shall be allowed under paragraph
(1)with respect to a manufactured or produced article that is exported or destroyed only if the exporter or destroyer received that article, directly or indirectly, from the manufacturer or producer. > > > ##### “(C) Evidence of transfer > > Transfers of merchandise under subparagraph
(A)and transfers of articles under subparagraph
(B)may be evidenced by business records kept in the normal course of business and no additional certificates of transfer or manufacture shall be required. > > > #### “(3) Submission of bill of materials or formula > > > ##### “(A) In general > > Drawback shall be allowed under paragraph
(1)with respect to an article manufactured or produced using imported merchandise or other merchandise classifiable under the same 8-digit HTS subheading number as such imported merchandise only if the person making the drawback claim submits with the claim a bill of materials or formula identifying the merchandise and article by the 8-digit HTS subheading number and the quantity of the merchandise. > > > ##### “(B) Bill of materials and formula defined > > In this paragraph, the terms ‘bill of materials’ and ‘formula’ mean records kept in the normal course of business that identify each component incorporated into a manufactured or produced article or that identify the quantity of each element, material, chemical, mixture, or other substance incorporated into a manufactured article. > > > #### “(4) Special rule for sought chemical elements > > > ##### “(A) In general > > For purposes of paragraph (1), a sought chemical element may be— > > > ###### “(i) > > considered imported merchandise, or merchandise classifiable under the same 8-digit HTS subheading number as such imported merchandise, used in the manufacture or production of an article as described in paragraph (1); and > > > ###### “(ii) > > substituted for source material containing that sought chemical element, without regard to whether the sought chemical element and the source material are classifiable under the same 8-digit HTS subheading number, and apportioned quantitatively, as appropriate. > > > ##### “(B) Sought chemical element defined > > In this paragraph, the term ‘sought chemical element’ means an element listed in the Periodic Table of Elements that is imported into the United States or a chemical compound consisting of those elements, either separately in elemental form or contained in source material.” > . ###
(c)Merchandise Not Conforming to Sample or Specifications Section 313(c) of the Tariff Act of 1930 (19 U.S.C. 1313(c)) is amended— ####
(1)in paragraph (1)— #####
(A)in subparagraph (C)(ii), by striking “under a certificate of delivery” each place it appears; #####
(B)in subparagraph (D)— ######
(i)by striking “3” and inserting “5”; and ######
(ii)by striking “the Customs Service” and inserting “U.S. Customs and Border Protection”; and #####
(C)in the flush text at the end, by striking “the full amount of the duties paid upon such merchandise, less 1 percent,” and inserting “an amount calculated pursuant to regulations prescribed by the Secretary of the Treasury under subsection (l)”; ####
(2)in paragraph (2), by striking “the Customs Service” and inserting “U.S. Customs and Border Protection”; and ####
(3)by amending paragraph
(3)to read as follows: > > #### “(3) Evidence of transfers > > Transfers of merchandise under paragraph
(1)may be evidenced by business records kept in the normal course of business and no additional certificates of transfer shall be required.” > . ###
(d)Proof of Exportation Section 313(i) of the Tariff Act of 1930 (19 U.S.C. 1313(i)) is amended to read as follows: > > ### “(i) Proof of Exportation > > A person claiming drawback under this section based on the exportation of an article shall provide proof of the exportation of the article. Such proof of exportation— > > > #### “(1) > > shall establish fully the date and fact of exportation and the identity of the exporter; and > > > #### “(2) > > may be established through the use of records kept in the normal course of business or through an electronic export system of the United States Government, as determined by the Commissioner of U.S. Customs and Border Protection.” > . ###
(e)Unused Merchandise Drawback Section 313(j) of the Tariff Act of 1930 (19 U.S.C. 1313(j)) is amended— ####
(1)in paragraph (1)— #####
(A)in subparagraph (A), in the matter preceding clause (i)— ######
(i)by striking “3-year” and inserting “5-year”; and ######
(ii)by inserting “and before the drawback claim is filed” after “the date of importation”; and #####
(B)in the flush text at the end, by striking “99 percent of the amount of each duty, tax, or fee so paid” and inserting “an amount calculated pursuant to regulations prescribed by the Secretary of the Treasury under subsection (l)”; ####
(2)in paragraph (2)— #####
(A)in the matter preceding subparagraph (A), by striking “paragraph (4)” and inserting “paragraphs (4), (5), and (6)”; #####
(B)in subparagraph (A), by striking “commercially interchangeable with” and inserting “classifiable under the same 8-digit HTS subheading number as”; #####
(C)in subparagraph (B)— ######
(i)by striking “3-year” and inserting “5-year”; and ######
(ii)by inserting “and before the drawback claim is filed” after “the imported merchandise”; #####
(D)in subparagraph (C)(ii), by striking subclause
(II)and inserting the following: > > ###### “(II) > > received the imported merchandise, other merchandise classifiable under the same 8-digit HTS subheading number as such imported merchandise, or any combination of such imported merchandise and such other merchandise, directly or indirectly from the person who imported and paid any duties, taxes, and fees imposed under Federal law upon importation or entry and due on the imported merchandise (and any such transferred merchandise, regardless of its origin, will be treated as the imported merchandise and any retained merchandise will be treated as domestic merchandise);” > ; and #####
(E)in the flush text at the end— ######
(i)by striking “the amount of each such duty, tax, and fee” and all that follows through “99 percent of that duty, tax, or fee” and inserting “an amount calculated pursuant to regulations prescribed by the Secretary of the Treasury under subsection
(l)shall be refunded as drawback”; and ######
(ii)by striking the last sentence and inserting the following: “Notwithstanding subparagraph (A), drawback shall be allowed under this paragraph with respect to wine if the imported wine and the exported wine are of the same color and the price variation between the imported wine and the exported wine does not exceed 50 percent. Transfers of merchandise may be evidenced by business records kept in the normal course of business and no additional certificates of transfer shall be required.”; ####
(3)in paragraph (3)(B), by striking “the commercially interchangeable merchandise” and inserting “merchandise classifiable under the same 8-digit HTS subheading number as such imported merchandise”; and ####
(4)by adding at the end the following: > > #### “(5) > > > #####
(A)> > For purposes of paragraph
(2)and except as provided in subparagraph (B), merchandise may not be substituted for imported merchandise for drawback purposes based on the 8-digit HTS subheading number if the article description for the 8-digit HTS subheading number under which the imported merchandise is classified begins with the term ‘other’. > > > ##### “(B) > > In cases described in subparagraph (A), merchandise may be substituted for imported merchandise for drawback purposes if— > > > ###### “(i) > > the other merchandise and such imported merchandise are classifiable under the same 10-digit HTS statistical reporting number; and > > > ###### “(ii) > > the article description for that 10-digit HTS statistical reporting number does not begin with the term ‘other’. > > > #### “(6) > > > #####
(A)> > For purposes of paragraph (2), a drawback claimant may use the first 8 digits of the 10-digit Schedule B number for merchandise or an article to determine if the merchandise or article is classifiable under the same 8-digit HTS subheading number as the imported merchandise, without regard to whether the Schedule B number corresponds to more than one 8-digit HTS subheading number. > > > ##### “(B) > > In this paragraph, the term ‘Schedule B’ means the Department of Commerce Schedule B, Statistical Classification of Domestic and Foreign Commodities Exported from the United States.” > . ###
(f)Liability for Drawback Claims Section 313(k) of the Tariff Act of 1930 (19 U.S.C. 1313(k)) is amended to read as follows: > > ### “(k) Liability for Drawback Claims > > > #### “(1) In general > > Any person making a claim for drawback under this section shall be liable for the full amount of the drawback claimed. > > > #### “(2) Liability of importers > > An importer shall be liable for any drawback claim made by another person with respect to merchandise imported by the importer in an amount equal to the lesser of— > > > ##### “(A) > > the amount of duties, taxes, and fees that the person claimed with respect to the imported merchandise; or > > > ##### “(B) > > the amount of duties, taxes, and fees that the importer authorized the other person to claim with respect to the imported merchandise. > > > #### “(3) Joint and several liability > > Persons described in paragraphs
(1)and
(2)shall be jointly and severally liable for the amount described in paragraph (2).” > . ###
(g)Regulations Section 313(l) of the Tariff Act of 1930 (19 U.S.C. 1313(l)) is amended to read as follows: > > ### “(l) Regulations > > > #### “(1) In general > > Allowance of the privileges provided for in this section shall be subject to compliance with such rules and regulations as the Secretary of the Treasury shall prescribe. > > > #### “(2) Calculation of drawback > > > ##### “(A) In general > > Not later than the date that is 2 years after the date of the enactment of the Trade Facilitation and Trade Enforcement Act of 2015, the Secretary shall prescribe regulations for determining the calculation of amounts refunded as drawback under this section. > > > ##### “(B) Claims with respect to unused merchandise > > The regulations required by subparagraph
(A)for determining the calculation of amounts refunded as drawback under this section shall provide for a refund of equal to 99 percent of the duties, taxes, and fees paid on the imported merchandise, which were imposed under Federal law upon entry or importation of the imported merchandise, and may require the claim to be based upon the average per unit duties, taxes, and fees as reported on the entry summary line item or, if not reported on the entry summary line item, as otherwise allocated by U.S. Customs and Border Protection, except that where there is substitution of the merchandise, then— > > > ###### “(i) > > in the case of an article that is exported, the amount of the refund shall be equal to 99 percent of the lesser of— > > > ###### “(I) > > the amount of duties, taxes, and fees paid with respect to the imported merchandise; or > > > ###### “(II) > > the amount of duties, taxes, and fees that would apply to the exported article if the exported article were imported; and > > > ###### “(ii) > > in the case of an article that is destroyed, the amount of the refund shall be an amount that is— > > > ###### “(I) > > equal to 99 percent of the lesser of— > > > ###### “(aa) > > the amount of duties, taxes, and fees paid with respect to the imported merchandise; and > > > ###### “(bb) > > the amount of duties, taxes, and fees that would apply to the destroyed article if the destroyed article were imported; and > > > ###### “(II) > > reduced by the value of materials recovered during destruction as provided in subsection (x). > > > ##### “(C) Claims with respect to manufactured articles into which imported or substitute merchandise is incorporated > > The regulations required by subparagraph
(A)for determining the calculation of amounts refunded as drawback under this section shall provide for a refund of equal to 99 percent of the duties, taxes, and fees paid on the imported merchandise incorporated into an article that is exported or destroyed, which were imposed under Federal law upon entry or importation of the imported merchandise incorporated into an article that is exported or destroyed, and may require the claim to be based upon the average per unit duties, taxes, and fees as reported on the entry summary line item, or if not reported on the entry summary line item, as otherwise allocated by U.S. Customs and Border Protection, except that where there is substitution of the imported merchandise, then— > > > ###### “(i) > > in the case of an article that is exported, the amount of the refund shall be equal to 99 percent of the lesser of— > > > ###### “(I) > > the amount of duties, taxes, and fees paid with respect to the imported merchandise; or > > > ###### “(II) > > the amount of duties, taxes, and fees that would apply to the substituted merchandise if the substituted merchandise were imported; and > > > ###### “(ii) > > in the case of an article that is destroyed, the amount of the refund shall be an amount that is— > > > ###### “(I) > > equal to 99 percent of the lesser of— > > > ###### “(aa) > > the amount of duties, taxes, and fees paid with respect to the imported merchandise; and > > > ###### “(bb) > > the amount of duties, taxes, and fees that would apply to the substituted merchandise if the substituted merchandise were imported; and > > > ###### “(II) > > reduced by the value of materials recovered during destruction as provided in subsection (x). > > > ##### “(D) Exceptions > > The calculations set forth in subparagraphs
(B)and
(C)shall not apply to claims for wine based on subsection (j)(2) and claims based on subsection
(p)and instead— > > > ###### “(i) > > for any drawback claim for wine based on subsection (j)(2), the amount of the refund shall be equal to 99 percent of the duties, taxes, and fees paid with respect to the imported merchandise, without regard to the limitations in subparagraphs (B)(i) and (B)(ii); and > > > ###### “(ii) > > for any drawback claim based on subsection (p), the amount of the refund shall be subject to the limitations set out in paragraph
(4)of that subsection and without regard to subparagraph (B)(i), (B)(ii), (C)(i), or (C)(ii). > > > #### “(3) Status reports on regulations > > Not later than the date that is one year after the date of the enactment of the Trade Facilitation and Trade Enforcement Act of 2015, and annually thereafter until the regulations required by paragraph
(2)are final, the Secretary shall submit to Congress a report on the status of those regulations.” > . ###
(h)Substitution of Finished Petroleum Derivatives Section 313(p) of the Tariff Act of 1930 (19 U.S.C. 1313(p)) is amended— ####
(1)by striking “Harmonized Tariff Schedule of the United States” each place it appears and inserting “HTS”; and ####
(2)in paragraph (3)(A)— #####
(A)in clause (ii)(III), by striking “, as so certified in a certificate of delivery or certificate of manufacture and delivery”; and #####
(B)in the flush text at the end— ######
(i)by striking “, so designated on the certificate of delivery or certificate of manufacture and delivery”; and ######
(ii)by striking the last sentence and inserting the following: “The party transferring the merchandise shall maintain records kept in the normal course of business to demonstrate the transfer.”. ###
(i)Packaging Material Section 313(q) of the Tariff Act of 1930 (19 U.S.C. 1313(q)) is amended— ####
(1)in paragraph (1), by striking “of 99 percent of any duty, tax, or fee imposed under Federal law on such imported material” and inserting “in an amount calculated pursuant to regulations prescribed by the Secretary of the Treasury under subsection (l)”; ####
(2)in paragraph (2), by striking “of 99 percent of any duty, tax, or fee imposed under Federal law on the imported or substituted merchandise used to manufacture or produce such material” and inserting “in an amount calculated pursuant to regulations prescribed by the Secretary of the Treasury under subsection (l)”; and ####
(3)in paragraph (3), by striking “they contain” each place it appears and inserting “it contains”. ###
(j)Filing of Drawback Claims Section 313(r) of the Tariff Act of 1930 (19 U.S.C. 1313(r)) is amended— ####
(1)in paragraph (1)— #####
(A)by striking the first sentence and inserting the following: “A drawback entry shall be filed or applied for, as applicable, not later than 5 years after the date on which merchandise on which drawback is claimed was imported.”; #####
(B)in the second sentence, by striking “3-year” and inserting “5-year”; and #####
(C)in the third sentence, by striking “the Customs Service” and inserting “U.S. Customs and Border Protection”; ####
(2)in paragraph (3)— #####
(A)in subparagraph (A)— ######
(i)in the matter preceding clause (i), by striking “The Customs Service” and inserting “U.S. Customs and Border Protection”; ######
(ii)in clauses
(i)and (ii), by striking “the Customs Service” each place it appears and inserting “U.S. Customs and Border Protection”; and ######
(iii)in clause (ii)(I), by striking “3-year” and inserting “5-year”; and #####
(B)in subparagraph (B), by striking “the periods of time for retaining records set forth in subsection
(t)of this section and” and inserting “the period of time for retaining records set forth in”; and ####
(3)by adding at the end the following: > > #### “(4) > > All drawback claims filed on and after the date that is 2 years after the date of the enactment of the Trade Facilitation and Trade Enforcement Act of 2015 shall be filed electronically.” > . ###
(k)Designation of Merchandise by Successor Section 313(s) of the Tariff Act of 1930 (19 U.S.C. 1313(s)) is amended— ####
(1)in paragraph (2), by striking subparagraph
(B)and inserting the following: > > ##### “(B) > > subject to paragraphs
(5)and
(6)of subsection (j), imported merchandise, other merchandise classifiable under the same 8-digit HTS subheading number as such imported merchandise, or any combination of such imported merchandise and such other merchandise, that the predecessor received, before the date of succession, from the person who imported and paid any duties, taxes, and fees due on the imported merchandise;” > ; and ####
(2)in paragraph (4), by striking “certifies that” and all that follows and inserting “certifies that the transferred merchandise was not and will not be claimed by the predecessor.”. ###
(l)Drawback Certificates Section 313 of the Tariff Act of 1930 (19 U.S.C. 1313) is amended by striking subsection (t). ###
(m)Drawback for Recovered Materials Section 313(x) of the Tariff Act of 1930 (19 U.S.C. 1313(x)) is amended by striking “and (c)” and inserting “(c), and (j)”. ###
(n)Definitions Section 313 of the Tariff Act of 1930 (19 U.S.C. 1313) is amended by adding at the end the following: > > ### “(z) Definitions > > In this section: > > > #### “(1) Directly > > The term ‘directly’ means a transfer of merchandise or an article from one person to another person without any intermediate transfer. > > > #### “(2) HTS > > The term ‘HTS’ means the Harmonized Tariff Schedule of the United States. > > > #### “(3) Indirectly > > The term ‘indirectly’ means a transfer of merchandise or an article from one person to another person with one or more intermediate transfers.” > . ###
(o)Recordkeeping Section 508(c)(3) of the Tariff Act of 1930 (19 U.S.C. 1508(c)(3)) is amended by striking “payment” and inserting “liquidation”. ###
(p)Government Accountability Office Report ####
(1)In general Not later than one year after the issuance of the regulations required by subsection (l)(2) of section 313 of the Tariff Act of 1930, as added by subsection
(g)of this section, the Comptroller General of the United States shall submit to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives a report on the modernization of drawback and refunds under section 313 of the Tariff Act of 1930, as amended by this section. ####
(2)Contents The report required by paragraph
(1)shall include the following: #####
(A)An assessment of the modernization of drawback and refunds under section 313 of the Tariff Act of 1930, as amended by this section. #####
(B)A description of drawback claims that were permissible before the effective date provided for in subsection
(q)that are not permissible after that effective date and an identification of industries most affected. #####
(C)A description of drawback claims that were not permissible before the effective date provided for in subsection
(q)that are permissible after that effective date and an identification of industries most affected. ###
(q)Effective Date **[**[19 U.S.C. 1313 note](/us/usc/t19/s1313)**]** ####
(1)In general The amendments made by this section shall— #####
(A)take effect on the date of the enactment of this Act; and #####
(B)except as provided in paragraph (3), apply to drawback claims filed on or after the date that is 2 years after such date of enactment. ####
(2)Reporting of operability of automated commercial environment computer system Not later than one year after the date of the enactment of this Act, and not later than 2 years after such date of enactment, the Secretary of the Treasury shall submit to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives a report on— #####
(A)the date on which the Automated Commercial Environment will be ready to process drawback claims; and #####
(B)the date on which the Automated Export System will be ready to accept proof of exportation under subsection
(i)of section 313 of the Tariff Act of 1930, as amended by subsection
(d)of this section. ####
(3)Transition rule During the one-year period beginning on the date that is 2 years after the date of the enactment of this Act, a person may elect to file a claim for drawback under— #####
(A)section 313 of the Tariff Act of 1930, as amended by this section; or #####
(B)section 313 of the Tariff Act of 1930, as in effect on the day before the date of the enactment of this Act.
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