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CBP Issues Drawback Info for Exports to Chile

September 20, 2013 by Tim Warren|Customs

Drawback claims made on goods exported to Chile after January 1, 2012 are subject to U.S.-Chile Free Trade Agreement special treatment as described in 19 U.S.C. 1313(j)(4)(B) and 1313(n), said CBP in a CSMS message. U.S. duty drawback on exportations to Chile started being phased out January 1, 2012, for the following types of drawback:

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  • Manufacturing -- 1313(a) and 1313(b)
  • Substitution Unused Merchandise-- 1313(j)(2)
  • Substitution of Finished Petroleum Derivatives -- 1313(p)
  • Packaging Material -- 1313(q)

The phase-out in duty drawback is as follows:

  • Exportations from Jan 1, 2012 - Dec. 31, 2012 are reduced to 75% of eligible drawback
  • Exportations from Jan 1, 2013 - Dec. 31, 2013 are reduced to 50% of eligible drawback
  • Exportations from Jan 1, 2014 - Dec. 31, 2014 are reduced to 25% of eligible drawback
  • Exportations on or after Jan 1, 2015 are reduced to zero drawback

Unused merchandise direct identification drawback 1313(j)(1) remains eligible for drawback and is not subject to the free trade agreement reductions.

Filing Instructions

  1. Drawback claims involving goods exported to Chile must be submitted separately from all other types of drawback claims and should be marked “Chile FTA” in conspicuous letters on the top of the first page or the front of the folder.
  2. ABI claims should be transmitted at the calculated amount (original duty amount prior to the reduction).
  3. The total drawback claimed on the CBP 7551 should be the reduced duty/fee amount.
  4. The calculation worksheet must include a column representing the calculated duty/fees (amount before the duty reduction) and a column with the actual duty/fees claimed (amount after the duty/fee reduction):
    • 99% of duty on the ABI transmission
    • 75% of duty and fees on the 7551 (or applicable duty reduction based on year)
    • 75% (for 2012 claims) and 99% of duty and fees on the calculation worksheet and coding sheet

(CBP's Chile Drawback and Duty Deferral Program site is here).