President Barack Obama signed the Act into law on February 24, 2016. These changes are significant for savvy importers. While TFTEA generally expands drawback rights, the NPR itself raises concerns for importers and exporters which may warrant submitting comments by 17 September 2018. TFTEA Drawback Simplification *P.L. Under the regulations, drawback granted on the export or destruction of substituted merchandise will be limited to the amount of taxes paid (and not returned by refund, credit or drawback) on the substituted merchandise. Duty drawback is under-utilized, partly because eligible U.S. companies do not know about it. [3] h�bbd``b`���A��,�k&���l��ă&F6% ���� ��w�O� tq download blanks on your PC or mobile device. 1700 0 obj <>stream [1]  Substitution drawback is permitted under the new regulations if “imported, duty-paid merchandise or merchandise classifiable under the same 8-digit HTSUS subheading number as the imported merchandise is used in the manufacture or production of articles within a period not to exceed 5 years from the date of such imported merchandise.”[2]  CBP is thereby adopting the new objective test for determining the interchangeability of a good, its kind, and quality. A Waiver of Prior Notice for Destruction has been added in §190.71. 906) – On February 24, 2016, the President signed Public Law 114-125, which enacted H.R. The NPR reflects a complete re-writing of existing customs drawback regulations in order to implement the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA). These regulations allow CBP to begin processing payments for Accelerated Payment (AP) on TFTEA drawback claims. TFTEA regulations were made final on December 18, 2018. TFTEA made numerous changes to simplify the drawback law, including standardizing the time frames for filing claims and modernizing recordkeeping requirements. Implementation Timeline for TFTEA Regulations 2/24/2016 TFTEA Passage 2/24/2018 Effective period 2/24/2018 to 2/23/2019 TFTEA “dual time period” 8/2/2018 Proposed regs Lawsuit 9/17/18 Public Comments Deadline 12/18/2018 new regs 2/24/2019 TFTEA only … Implementation Timeline for TFTEA Regulations 2/24/2016 TFTEA Passage 2/24/2018 Effective period 2/24/2018 to 2/23/2019 TFTEA “dual time period” 8/2/2018 Proposed regs Lawsuit 9/17/18 Public Comments Deadline 12/18/2018 new regs 2/24/2019 TFTEA only … On December 18, 2018, US Customs and Border Protection (CBP) published in the Federal Register, a final rule [CBP Dec. 18-15; USCBP-2018-0029] that adopts with changes proposed amendments to the CBP regulations implementing changes to the drawback regulations, as directed by the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA). A two-year effort between U.S. Customs and Border Protection and the import/export industry to update the nation’s two-centuries-old duty drawback program came to fruition on Tuesday with the agency’s publication of the final “modernized” drawback regulations. This amendment significantly expands the scope and ease of substitute drawback. TFTEA Drawback Claims Accelerated Payment Processing Regulations Are Now Effective December 17, 2018. The existing rulings were issued based on the requir… These regulations allow CBP to begin processing payments for Accelerated Payment (AP) on TFTEA drawback claims. Kristopher Chandler is an Associate with the Firm and may be reached at 614-223-9377 or kchandler@beneschlaw.com. The long-awaited TFTEA drawback regulations were published on December 18, 2018. The new regulations clarify the prohibition on the filing of substitution drawback claims for internal revenue excise tax in situations where no excise tax was paid upon the substituted merchandise or where the substituted merchandise is the subject of a different claim for refund or drawback of tax. An importer’s ability to claim substitute drawback has expanded, the period in which its inbound and outbound traffic must align has likewise expanded, and the opportunity to file electronically for duty drawback has arrived. In an Oct. 12 order, the CIT directed CBP to file final regulations with the Office of the Federal Register on or before Dec. 17. U.S. Customs and Border Protection (CBP) posted notice implementing changes to the drawback regulations adopted under a Final Rule which modernized the filing of drawback as directed by the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA). The Path to TFTEA 2 • TFTEA statute signed 2/24/16, effective 2/24/18 • Development of core drawback in ACE • Development of TFTEA drawback in ACE • Regulations delayed- Interim Guidance issued February 2018 • Deployment of core and TFTEA drawback in ACE … tftea drawback regulations. TFTEA included a provision for us to assess drawback modernization and identify industries affected by changes in eligibility for drawback refunds within 12 months from when the final regulations were issued. These regulations institute the new processes for drawback pursuant to the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA). We recently noted the dismay of duty drawback filers when Customs and Border Protection failed to publish regulations needed to process refunds under the new duty drawback rules of the Trade Facilitation and Trade Enforcement Act (TFTEA), which entered into force on February 24, 2018. The Working Group discussed this issue at length with CBP officials to explain why it’s important to continue Accelerated Payment in the interim. The impact may be experienced in the form of interests in documentation, recordkeeping, data management, tariff-level determinations of import and export needs, as well as the cadence of import and export flows. [3]  Additionally, the new CBP regulations require that all supporting records relating to drawback claims must be maintained for three (3) years from the date of the liquidation of the claim.[4]. Jonathan Todd is a Partner with the Transportation & Logistics Practice Group at Benesch, Friedlander, Coplan & Aronoff. “Our company worked closely with Customs to address those issues and in some cases even proposed fixes that Customs could implement,” Cerny said. Our services include all matters necessary to establish and run a sophisticated duty drawba… [1] Drawback Simplification Newsletter; Trade Facilitation and Trade Enforcement Act of 2015, U.S. Customs and Border Protection (June 2017). These regulations institute the new processes for drawback pursuant to the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA). Combining this with the fact that TFTEA claims will not be processed or liquidated, drawback payments will stop completely after February 24, 2019 if the regulations are not implemented by that time. For example, TFTEA and the proposed drawback regulations in 19 CFR part 190 will completely eliminate CBP Form 7552: Delivery Certificate for Purposes of Drawback, allowing trade members to instead keep evidence of transfers in their records kept in the normal course of business, and provide such evidence to CBP upon request. Claims vary depending on the type of drawback the claimant is filing under is.! 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