Form 7512 Required for Drawback Claims on Goods Transported In-Bond, CBP Says
A tuna importer’s request for drawback should be rejected because the importer exported the tuna from a different port, yet didn’t file required documentation to transport the tuna between ports under bond, CBP said in a recent ruling (here). For merchandise transported in-bond before export, Form 7512 or its electronic equivalent is part of the proof of exportation required on drawback claims, CBP said in ruling HQ H284687.
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Jana Brands Worldwide (JBW) had applied for unused merchandise on tuna that had been held at the Port of Chicago after being rejected by the Food and Drug Administration. JBW had the tuna transported to the Port of Los Angeles for export. It said its customs broker had been directed by CBP Chicago to file paper Form 7512s for the in-bond transportation of the merchandise between the ports, but the forms allegedly submitted by the broker had no signature indicating CBP’s receipt. CBP took that to mean the 7512s had never been submitted.
After the goods arrived in Los Angeles and were subsequently exported, JBW filed its drawback claim with the Port of Houston. CBP Houston’s drawback office denied the claim “pursuant to [the Houston] office’s determination that the subject merchandise was not properly transported in-bond,” the ruling said. “Your office concluded that failure to transfer the subject merchandise in-bond by duly submitting CBP Form 7512s prevents JBW from satisfying all of the regulatory requirements for drawback eligibility, and JBW’s drawback claim was denied.”
JBW protested, and when the Port of Houston denied the protest, JBW requested further review. CBP headquarters agreed with the Port, finding Form 7512 are required in drawback claims wherein the merchandise was transported in-bond. Under the customs regulations, “CBP shall reject a drawback claim determined to be incomplete for failure to satisfy” the drawback requirements of 19 CFR 191. That includes “evidence of exportation,” consisting of “documentary evidence that must fully establish the date and fact of exportation,” CBP said.
“CBP Form 7512 is unambiguously required as acceptable proof of delivery of merchandise to the port of exportation if the in-bond movement constitutes an irregular delivery,” the agency said. “An irregular delivery occurs, as in this case, when CBP Form 7512 is not presented at the port of exportation and the port director is denied the ability to supervise the subject merchandise being laden for exportation,” it said. “Accordingly, an irregular delivery denies CBP the documentary evidence needed to fully establish that the goods it examined at a port were the same goods laden for exportation at a different port.” CBP Houston correctly denied JBW’s claim because it was based on an incomplete drawback application, the ruling said.