PART 190—MODERNIZED DRAWBACK Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1202 (General Note 3(i), Harmonized Tariff Schedule of the United States), 1313, 1624; §§ 190.2, 190.10, 190.15, 190.23, 190.38, 190.51 issued under 19 U.S.C. 1508; § 190.84 also issued under 19 U.S.C. 1514; §§ 190.111, 190.112 also issued under 19 U.S.C. 1309; §§ 190.151(a)(1), 190.153, 190.157, 190.159 also issued under 19 U.S.C. 1557; §§ 190.182-190.186 also issued under 19 U.S.C. 81c; §§ 190.191-190.195 also issued under 19 U.S.C. 1593a. Source: 83 FR 64997, Dec. 18, 2018, unless otherwise noted. § 190.0 Scope. This part sets forth general provisions applicable to all drawback claims and specialized provisions applicable to specific types of drawback claims filed under 19 U.S.C. 1313, as amended. For drawback claims and specialized provisions applicable to specific types of drawback claims filed pursuant to 19 U.S.C. 1313, as it was in effect on or before February 24, 2016, please see part 191 of this chapter. Additional drawback provisions relating to the North American Free Trade Agreement (NAFTA) are contained in subpart E of part 181 of this chapter, and provisions relating to the Agreement Between the United States of America, the United Mexican States, and Canada (USMCA) are contained in subpart E of part 182 of this chapter. [83 FR 64997, Dec. 18, 2018, as amended by CBP Dec. 21-10, 86 FR 35594, July 6, 2021] § 190.0a Claims filed under NAFTA and USMCA. Claims for drawback filed under the provisions of part 181 or part 182 of this chapter must be filed separately from claims filed under the provisions of this part. [83 FR 64997, Dec. 18, 2018, as amended by CBP Dec. 21-10, 86 FR 35594, July 6, 2021] Subpart A—General Provisions § 190.1 Authority of the Commissioner of CBP. Pursuant to DHS Delegation number 7010.3, the Commissioner of CBP has the authority to prescribe, and pursuant to Treasury Order No. 100-16 (set forth in the appendix to part 0 of this chapter), the Secretary of the Treasury has the sole authority to approve, rules and regulations regarding drawback. § 190.2 Definitions. For the purposes of this part: Abstract. Abstract Act. Act, Bill of materials. Bill of materials Designated merchandise. Designated merchandise Destruction. Destruction destruction Direct identification drawback. Direct identification drawback see Document. document Drawback. Drawback claim. Drawback claim, Drawback entry. Drawback entry Drawback office. Drawback office Drawback product. drawback product see see Exportation. Exportation see Exporter. Exporter see exportation exporter exporter Filing. Filing Formula. Formula Fungible merchandise or articles. Fungible merchandise or articles General manufacturing drawback ruling. general manufacturing drawback ruling see Intermediate party. Manufacture or production. Manufacture or production Multiple products. Multiple products Per unit averaging. Per unit averaging see see Possession. Possession, Records. Records see Relative value. Relative value Schedule. schedule Schedule B. Schedule B Sought chemical element. sought chemical element, Specific manufacturing drawback ruling. specific manufacturing drawback ruling Substituted merchandise or articles. Substituted merchandise or articles (1) For manufacturing drawback pursuant to section 1313(b), substituted merchandise must be classifiable under the same 8-digit HTSUS subheading number as the designated imported merchandise; (2) For rejected merchandise drawback pursuant to section 1313(c)(2), substituted merchandise must be classifiable under the same 8-digit HTSUS subheading number and have the same specific product identifier (such as part number, SKU, or product code) as the designated imported merchandise; (3) For unused merchandise drawback pursuant to section 1313(j)(2), substituted merchandise must be classifiable under the same 8-digit HTSUS subheading number as the designated imported merchandise except for wine which may also qualify pursuant to § 190.32(d), but when the 8-digit HTSUS subheading number under which the imported merchandise is classified begins with the term “other,” then the other merchandise may be substituted for imported merchandise for drawback purposes if the other merchandise and such imported merchandise are classifiable under the same 10-digit HTSUS statistical reporting number and the article description for that 10-digit HTSUS statistical reporting number does not begin with the term “other”; but when the first 8 digits of the 10-digit Schedule B number applicable to the exported merchandise are the same as the first 8 digits of the HTSUS subheading number under which the imported merchandise is classified, the merchandise may be substituted (without regard to whether the Schedule B number corresponds to more than one 8-digit HTSUS subheading number); and (4) For substitution drawback of finished petroleum derivatives pursuant to section 1313(p), a substituted article must be of the same kind and quality as the qualified article for which it is substituted, that is, the articles must be commercially interchangeable or described in the same 8-digit HTSUS subheading number ( see Unused merchandise. Unused merchandise Verification. Verification Wine. Wine, see § 190.3 Duties, taxes, and fees subject or not subject to drawback. (a) Drawback is allowable pursuant to 19 U.S.C. 1313 on duties, taxes, and fees paid on imported merchandise which were imposed under Federal law upon entry or importation, including: (1) Ordinary customs duties, including: (i) Duties paid on an entry, or withdrawal from warehouse, for consumption for which liquidation has become final; (ii) Estimated duties paid on an entry, or withdrawal from warehouse, for consumption, for which liquidation has not become final, subject to the conditions and requirements of § 190.81(b); and (iii) Tenders of duties after liquidation of the entry, or withdrawal from warehouse, for consumption for which the duties are paid, subject to the conditions and requirements of § 190.81(c), including: (A) Voluntary tenders (for purposes of this section, a “voluntary tender” is a payment of duties on imported merchandise in excess of duties included in the liquidation of the entry, or withdrawal from warehouse, for consumption, provided that the liquidation has become final and that the other conditions of this section and § 190.81 are met); (B) Tenders of duties in connection with notices of prior disclosure under 19 U.S.C. 1592(c)(4); and (C) Duties restored under 19 U.S.C. 1592(d). (2) Marking duties assessed under section 304(c), Tariff Act of 1930, as amended (19 U.S.C. 1304(c)); (3) Internal revenue taxes which attach upon importation; (4) Merchandise processing fees ( see (5) Harbor maintenance taxes ( see (b) Drawback is not allowable on antidumping and countervailing duties which were imposed on any merchandise entered, or withdrawn from warehouse, for consumption ( see (c) Drawback is not allowed when the identified merchandise, the designated imported merchandise, or the substituted merchandise (when applicable), consists of an agricultural product which is duty-paid at the over-quota rate of duty established under a tariff-rate quota, except that: (1) Agricultural products as described in this paragraph are eligible for drawback under 19 U.S.C. 1313(j)(1); and (2) Tobacco otherwise meeting the description of agricultural products in this paragraph is eligible for drawback under 19 U.S.C. 1313(j)(1) or 19 U.S.C. 1313(a). § 190.4 Merchandise in which a U.S. Government interest exists. (a) Restricted meaning of Government. (b) Allowance of drawback. (1) Department, branch, agency, or instrumentality of the U.S. Government which purchased it; or (2) Supplier, or any of the parties specified in § 190.82, provided the claim is supported by documentation signed by a proper officer of the department, branch, agency, or instrumentality concerned certifying that the right to drawback was reserved by the supplier or other parties with the knowledge and consent of the department, branch, agency, or instrumentality. (c) Bond. § 190.5 Guantanamo Bay, insular possessions, trust territories. Guantanamo Bay Naval Station is considered foreign territory for drawback purposes and, accordingly, drawback may be permitted on articles shipped there from the customs territory of the United States. Drawback is not allowed, except on claims made under 19 U.S.C. 1313(j)(1), on articles shipped from the customs territory of the United States to the U.S. Virgin Islands, American Samoa, Wake Island, Midway Islands, Kingman Reef, Guam, Canton Island, Enderbury Island, Johnston Island, or Palmyra Island. See § 190.6 Authority to sign or electronically certify drawback documents. (a) Documents listed in paragraph (b) of this section must be signed or electronically certified only by one of the following: (1) The president, a vice president, secretary, treasurer, or any other employee legally authorized to bind the corporation; (2) A full partner of a partnership; (3) The owner of a sole proprietorship; (4) Any employee of the business entity with a power of attorney; (5) An individual acting on his or her own behalf; or (6) A licensed customs broker with a power of attorney to sign the applicable drawback document. (b) The following documents require execution in accordance with paragraph (a) of this section: (1) Drawback entries; (2) Notices of Intent to Export, Destroy, or Return Merchandise for Purposes of Drawback; (3) Certifications to assign the right to claim drawback ( see (4) Abstracts, schedules and extracts from monthly abstracts, and bills of materials and formulas, if not included as part of a drawback claim. (c) The following documents ( see (1) A letter of notification of intent to operate under a general manufacturing drawback ruling under § 190.7; (2) An application for a specific manufacturing drawback ruling under § 190.8; (3) An application for waiver of prior notice under § 190.91 or a 1-time waiver of prior notice under § 190.36; (4) An application for approval of accelerated payment of drawback under § 190.92; and (5) An application for certification in the Drawback Compliance Program under § 190.193. § 190.7 General manufacturing drawback ruling. (a) Purpose; eligibility. see (b) Procedures Publication. (2) Submission. (3) Information required. (i) Name and address of manufacturer or producer (if the manufacturer or producer is a separately-incorporated subsidiary of a corporation, the subsidiary corporation must submit a letter of notification in its own name); (ii) In the case of a business entity, the names of the persons listed in § 190.6(a)(1) through (6) who will sign drawback documents; (iii) Locations of the factories which will operate under the letter of notification; (iv) Identity (by T.D. or CBP Decision number and title) of the general manufacturing drawback ruling under which the manufacturer or producer will operate; (v) Description of the merchandise and articles, unless specifically described in the general manufacturing drawback ruling, and the applicable 8-digit HTSUS subheading number(s) for imported merchandise that will be designated as part of substitution manufacturing drawback claims; (vi) Description of the manufacturing or production process, unless specifically described in the general manufacturing drawback ruling; (vii) Basis of claim used for calculating drawback; and (viii) IRS (Internal Revenue Service) number (with suffix) of the manufacturer or producer. (c) Review and action by CBP. (1) Acknowledgment. (i) The letter of notification is complete ( i.e., (ii) The general manufacturing drawback ruling identified by the manufacturer or producer is applicable to the manufacturing or production process; (iii) The general manufacturing drawback ruling identified by the manufacturer or producer will be followed without variation; and (iv) The described manufacturing or production process is a manufacture or production as defined in § 190.2. (2) Computer-generated number. (3) Non-conforming letters of notification of intent. (d) Procedure to modify a general manufacturing drawback ruling. (e) Duration. § 190.8 Specific manufacturing drawback ruling. (a) Applicant. see (b) Sample application. (c) Content of application. (1) Name and address of the applicant; (2) Internal Revenue Service (IRS) number (with suffix) of the applicant; (3) Description of the type of business in which engaged; (4) Description of the manufacturing or production process, which shows how the designated and substituted merchandise is used to make the article that is to be exported or destroyed; (5) In the case of a business entity, the names of persons listed in § 190.6(a)(1) through (6) who will sign drawback documents; (6) Description of the imported merchandise including specifications and applicable 8-digit HTSUS subheading(s); (7) Description of the exported article and applicable 8-digit HTSUS subheadings; (8) How manufacturing drawback is calculated; (9) Summary of the records kept to support claims for drawback; and (10) Identity and address of the recordkeeper if other than the claimant. (d) Submission of application. (e) Review and action by CBP. (1) Approval. (2) Disapproval. (f) Schedules and supplemental schedules. (g) Procedure to modify a specific manufacturing drawback ruling Supplemental application. (2) Limited modifications. (A) The location of a factory, or the addition of one or more factories where the methods followed and records maintained are the same as those at another factory operating under the existing specific manufacturing drawback ruling of the manufacturer or producer; (B) The succession of a sole proprietorship, partnership or corporation to the operations of a manufacturer or producer; (C) A change in name of the manufacturer or producer; (D) A change in the persons who will sign drawback documents in the case of a business entity; (E) A change in the basis of claim used for calculating drawback; (F) A change in the decision to use or not to use an agent under § 190.9, or a change in the identity of an agent under that section; (G) A change in the drawback office where claims will be filed under the ruling ( see (H) An authorization to continue operating under a ruling approved under 19 CFR part 191 ( see (I) Any combination of the foregoing changes. (ii) A limited modification, as provided for in this paragraph (g)(2), must contain only the modifications to be made, in addition to identifying the specific manufacturing drawback ruling and being signed by an authorized person. To effect a limited modification, the manufacturer or producer must file with the drawback office(s) where claims were originally filed a letter stating the modifications to be made. The drawback office will promptly acknowledge acceptance of the limited modifications. (iii) To transfer a claim to another drawback office, the manufacturer or producer must file with the second drawback office where claims will be filed, a written application to file claims at that office, with a copy of the application and approval letter under which claims are currently filed. The manufacturer or producer must provide a copy of the written application to file claims at the new drawback office to the drawback office where claims are currently filed. (iv) To file a claim under this part based on a ruling approved under 19 CFR part 191, the manufacturer or producer must file a supplemental application for a limited modification no later than February 23, 2019, which provides the following: (A) Revised parallel columns with the required annotations for the applicable 8-digit HTSUS subheading number(s); (B) Revised bill of materials or formula with the required annotations for the applicable 8-digit HTSUS subheading number(s); and (C) A certification of continued compliance, which states: “The undersigned acknowledges the current statutory requirements under 19 U.S.C. 1313 and the regulatory requirements in 19 CFR part 190, and hereby certifies its continuing eligibility for operating under the manufacturing drawback ruling in compliance therewith.” (h) Duration. (1) No drawback claim is filed under the ruling for a period of 5 years and notice of termination is published in the Customs Bulletin; or (2) The manufacturer or producer to whom approval of the ruling was issued files a request to terminate the ruling, in writing, with CBP Headquarters (Attention: Entry Process and Duty Refunds Branch, Regulations and Rulings, Office of Trade). § 190.9 Agency. (a) General. see, (b) Requirements Contract. (i) Terms of compensation to show that the relationship is an agency rather than a sale; (ii) How transfers of merchandise and articles will be recorded by the principal and its agent; (iii) The work to be performed on the merchandise by the agent for the principal; (iv) The degree of control that is to be exercised by the principal over the agent's performance of work; (v) The party who is to bear the risk of loss on the merchandise while it is in the agent's custody; and (vi) The period that the contract is in effect. (2) Ownership of the merchandise by the principal. (3) Sales prohibited. (c) Specific manufacturing drawback rulings; general manufacturing drawback rulings Owner. (2) Agent. see see (d) Certificate Contents of certificate. (i) Quantity of merchandise transferred from the principal to the agent; (ii) Date of transfer of the merchandise from the principal to the agent; (iii) Date of manufacturing or production operations performed by the agent; (iv) Total quantity, description, and 10-digit HTSUS classification of merchandise appearing in or used in manufacturing or production operations performed by the agent; (v) Total quantity, description, and 10-digit HTSUS classification of articles produced in manufacturing or production operations performed by the agent; (vi) Quantity and 10-digit HTSUS classification of articles transferred from the agent to the principal; and (vii) Date of transfer of the articles from the agent to the principal. (2) Blanket certificate. § 190.10 Transfer of merchandise. (a) Ability to transfer merchandise. (i) Imports and pays duties, taxes, and/or fees on such imported merchandise; (ii) Receives such imported merchandise; (iii) In the case of 19 U.S.C. 1313(j)(2), receives such imported merchandise, substituted merchandise, or any combination of such imported and substituted merchandise; or (iv) Receives an article manufactured or produced under 19 U.S.C. 1313(a) and/or (b). (2) The transferring party must maintain records that: (i) Document the transfer of that merchandise or article; (ii) Identify such merchandise or article as being that to which a potential right to drawback exists; and (iii) Assign such right to the transferee ( see (b) Required records. (1) The party to whom the merchandise or articles are delivered; (2) Date of physical delivery; (3) Import entry number and entry line item number; (4) Quantity delivered and, for substitution claims, total quantity attributable to the relevant import entry line item number; (5) Total duties, taxes, and fees paid on, or attributable to, the delivered merchandise, and, for substitution claims, total duties, taxes, and fees paid on, or attributable to, the relevant import entry line item number; (6) Date of importation; (7) Port where import entry filed; (8) Person from whom received; (9) Description of the merchandise delivered; (10) The 10-digit HTSUS classification for the designated imported merchandise (such HTSUS number must be from the entry summary line item and other entry documentation for the merchandise); and (11) If the merchandise transferred is substituted for the designated imported merchandise under 19 U.S.C. 1313(j)(2), the 10-digit HTSUS classification of the substituted merchandise (as if it had been imported). (c) Line item designation for partial transfers of merchandise. See (d) Retention period. see (e) Submission to CBP. (f) Warehouse transfer and withdrawals. § 190.11 Valuation of merchandise. The values declared to CBP as part of a complete drawback claim pursuant to § 190.51 must be established as provided below. If the drawback eligible merchandise or articles are destroyed, then the value of the imported merchandise and any substituted merchandise must be reduced by the value of materials recovered during destruction in accordance with 19 U.S.C. 1313(x). (a) Designated imported merchandise. (1) Direct identification claims. (2) Substitution claims. (b) Exported merchandise or articles. see, (c) Destroyed merchandise or articles. (d) Substituted merchandise for manufacturing drawback claims. § 190.12 Claim filed under incorrect provision. A drawback claim filed under this part and pursuant to any provision of section 313 of the Act, as amended (19 U.S.C. 1313), may be deemed filed pursuant to any other provision thereof should the drawback office determine that drawback is not allowable under the provision as originally filed, but that it is allowable under such other provision. To be allowable under such other provision, the claim must meet each of the requirements of such provision. The claimant may raise alternative provisions prior to liquidation and by protest ( see § 190.13 Packaging materials. (a) Imported packaging material. (b) Packaging material manufactured in United States from imported materials. § 190.14 Identification of merchandise or articles by accounting method. (a) General. (b) Conditions and criteria for identification by accounting method. (1) The lots of merchandise or articles to be so identified must be fungible as defined in § 190.2; (2) The person using the identification method must be able to establish that inventory records (for example, material control records), prepared and used in the ordinary course of business, account for the lots of merchandise or articles to be identified as being received into and withdrawn from the same inventory. Even if merchandise or articles are received or withdrawn at different geographical locations, if such inventory records treat receipts or withdrawals as being from the same inventory, those inventory records may be used to identify the merchandise or articles under this section, subject to the conditions of this section. If any such inventory records (that is, inventory records prepared and used in the ordinary course of business) treat receipts and withdrawals as being from different inventories, those inventory records must be used and receipts into or withdrawals from the different inventories may not be accounted for together. If units of merchandise or articles can be specifically identified (for example, by serial number), the merchandise or articles must be specifically identified and may not be identified by accounting method, unless it is established that inventory records, prepared and used in the ordinary course of business, treat the merchandise or articles to be identified as being received into and withdrawn from the same inventory (subject to the above conditions); (3) Unless otherwise provided in this section or specifically approved by CBP (by a binding ruling under part 177 of this chapter), all receipts (or inputs) into and all withdrawals from the inventory must be recorded in the accounting record; (4) The records which support any identification method under this section are subject to verification by CBP ( see (5) Any accounting method which is used by a person for drawback purposes under this section must be used exclusively, without using other methods for a period of at least 1 year, unless approval is given by CBP for a shorter period. (c) Approved accounting methods. (1) First-in, first-out FIFO General. (ii) Example. (2) Last-in, first out LIFO General. (ii) Example. (3) Low-to-high General. (ii) Ordinary low-to-high Method. (B) Example. Date Receipt Withdrawals Jan. 2 100 (zero) Jan. 5 50 ($1.00) Jan. 15 50 (export). Jan. 20 50 ($1.01) Jan. 25 50 ($1.02) Jan. 28 50 (domestic). Jan. 31 50 ($1.03) Feb. 5 100 (export). Feb. 10 50 ($.95) Feb. 15 50 (export). Feb. 20 50 (zero) Feb. 23 50 (domestic). Feb. 25 50 ($1.05) Feb. 28 100 (export). Mar. 5 50 ($1.06) Mar. 10 50 ($.85) Mar. 15 50 (export). Mar. 21 50 (domestic). Mar. 20 50 ($1.08) Mar. 25 50 ($.90) Mar. 31 100 (export). Note to paragraph ( c ii The drawback attributable to the January 15 withdrawal for export is zero (the available receipt with the lowest drawback amount per unit is the January 2 receipt), the drawback attributable to the January 28 withdrawal for domestic shipment (no drawback) is zero (the remainder of the January 2 receipt), the drawback attributable to the February 5 withdrawal for export is $100.50 (the January 5 and January 20 receipts), the drawback attributable to the February 15 withdrawal for export is $47.50 (the February 10 receipt), the drawback attributable to the February 23 withdrawal for domestic shipment (no drawback) is zero (the February 20 receipt), the drawback attributable to the February 28 withdrawal for export is $102.50 (the January 25 and January 31 receipts), the drawback attributable to the March 15 withdrawal for export is $42.50 (the March 10 receipt), the drawback attributable to the March 21 withdrawal for domestic shipment (no drawback) is $52.50 (the February 25 receipt), and the drawback attributable to the March 31 withdrawal for export is $98.00 (the March 25 and March 5 receipts). Remaining in inventory is the March 20 receipt of 50 units ($1.08 drawback/unit). Total drawback attributable to withdrawals for export in this example would be $391.00. (iii) Low-to-high method with established average inventory turn-over period Method. (B) Accounting for withdrawals for domestic shipments and for export (C) Establishment of inventory turn-over period. (D) Example. (iv) Low-to-high blanket method Method. (B) Accounting for withdrawals for domestic shipments and for export (C) Example. (4) Average General. (A) The total units of a particular receipt of the fungible merchandise in the inventory at the time of a withdrawal to; (B) The total units of all receipts of the fungible merchandise (including each receipt into inventory) at the time of the withdrawal; (C) Is applied to the withdrawal, so that the withdrawal consists of a proportionate quantity of units from each particular receipt and each receipt is correspondingly decreased. Withdrawals and corresponding decreases to receipts are rounded to the nearest whole number. (ii) Example. (5) Inventory turn-over for limited purposes. (i) The fact and date(s) of use in manufacture or production of the designated imported merchandise and other (substituted) merchandise ( see (ii) The fact and date(s) of manufacture or production of the exported or destroyed articles ( see (d) Approval of other accounting methods. see see (2) In order for a proposed accounting method to be approved by CBP for purposes of this section, it must meet the following criteria: (i) For purposes of calculations of drawback, the proposed accounting method must be either revenue neutral or favorable to the Government; and (ii) The proposed accounting method should be: (A) Generally consistent with commercial accounting procedures, as applicable for purposes of drawback; (B) Consistent with inventory or material control records used in the ordinary course of business by the person proposing the method; and (C) Easily administered by CBP. § 190.15 Recordkeeping. Pursuant to 19 U.S.C. 1508(c)(3), all records which pertain to the filing of a drawback claim or to the information contained in the records required by 19 U.S.C. 1313 in connection with the filing of a drawback claim must be retained for 3 years after liquidation of such claims or longer period if required by law (under 19 U.S.C. 1508, the same records may be subject to a different period for different purposes). Subpart B—Manufacturing Drawback § 190.21 Direct identification manufacturing drawback. Section 313(a) of the Act, as amended (19 U.S.C. 1313(a)), provides for drawback upon the exportation, or destruction under CBP supervision, of articles manufactured or produced in the United States with the use of imported merchandise, provided that those articles have not been used in the United States prior to such exportation or destruction. The amount of drawback allowable will not exceed 99 percent of the amount of duties, taxes, and fees paid with respect to the imported merchandise. However, duties may not be refunded upon the exportation or destruction of flour or by-products produced from imported wheat. Where two or more products result, drawback must be distributed among the products in accordance with their relative values, as defined in § 190.2, at the time of separation. Merchandise may be identified for drawback purposes under 19 U.S.C. 1313(a) in the manner provided for and prescribed in § 190.14. § 190.22 Substitution drawback. (a)(1) General Substitution standard. (ii) Allowable refund Exportation. ( 1 ( 2 (B) Destruction. ( 1 ( 2 (C) Federal excise tax. (2) Special rule for sought chemical elements Substitution standard. see (ii) Allowable refund. (b) Use by same manufacturer or producer at different factory. (c) Designation. (d) Designation by successor General rule. (2) Drawback successor. (i) All or substantially all of the rights, privileges, immunities, powers, duties, and liabilities of the predecessor; or (ii) The assets and other business interests of a division, plant, or other business unit of such predecessor, but only if in such transfer the value of the transferred realty, personalty, and intangibles (other than drawback rights, inchoate or otherwise) exceeds the value of all transferred drawback rights, inchoate or otherwise. (3) Certifications and required evidence Records of predecessor. (ii) Merchandise not otherwise designated. (iii) Value of transferred property. (iv) Review by CBP. (e) Multiple products General. see (2) Claims covering a manufacturing period. (3) Recordkeeping. § 190.23 Methods and requirements for claiming drawback. Claims must be based on one or more of the methods specified in paragraph (a) of this section and comply with all other requirements specified in this section. (a) Method of claiming drawback. Used in. see (2) Used in less valuable waste. (3) Relative value. (4) Appearing in. (b) Abstract or schedule. see see (c) Claim for waste. Valuable waste. (2) If claim for waste is waived. see § 190.24 Transfer of merchandise. Evidence of any transfers of merchandise ( see § 190.25 Destruction under CBP supervision. A claimant may destroy merchandise and obtain drawback by complying with the procedures set forth in § 190.71 relating to destruction. § 190.26 Recordkeeping. (a) Direct identification. Records required. (i) The date or inclusive dates of manufacture or production; (ii) The quantity, identity, and 8-digit HTSUS subheading number(s) of the imported duty-paid merchandise or drawback products used in or appearing in ( see (iii) The quantity, if any, of the non-drawback merchandise used, when these records are necessary to determine the quantity of imported duty-paid merchandise or drawback product used in the manufacture or production of the exported or destroyed articles or appearing in them; (iv) The quantity and description of the articles manufactured or produced; (v) The quantity of waste incurred, if applicable; and (vi) That the articles on which drawback is claimed were exported or destroyed within 5 years after the importation of the duty-paid merchandise, without having been used in the United States prior to such exportation or destruction. (If the articles were commingled after manufacture or production, their identity may be maintained in the manner prescribed in § 190.14.) (2) Accounting. (i) To determine, and the CBP official to verify, the applicable import entry and any transfers of the merchandise associated with the claim; and (ii) To identify with respect to that import entry, and any transfers of the merchandise, the imported merchandise or drawback products used in manufacture or production. (b) Substitution. (1) The quantity, identity, and specifications of the merchandise designated (imported duty-paid, or drawback product); (2) The quantity, identity, and specifications of the substituted merchandise before its use to manufacture or produce (or appearing in) the exported or destroyed articles; (3) That, within 5 years after the date of importation of the imported duty-paid merchandise, the manufacturer or producer used the designated merchandise in manufacturing or production and that during the same5-year period it manufactured or produced the exported or destroyed articles; and (4) If the designated merchandise is a sought chemical element, as defined in § 190.2, that was contained in imported material and a substitution drawback claim is made based on that chemical element: (i) The duties, taxes, and fees paid on the imported material must be apportioned among its constituent components. The claim on the chemical element that is the designated merchandise must be limited to the duty apportioned to that element on a unit-for-unit attribution using the unit of measure set forth in the HTSUS that is applicable to the imported material. If the material is a compound with other constituents, including impurities, and the purity of the compound in the imported material is shown by satisfactory analysis, that purity, converted to a decimal equivalent of the percentage, is multiplied against the entered amount of the material to establish the amount of pure compound. The amount of the element in the pure compound is to be determined by use of the atomic weights of the constituent elements and converting to the decimal equivalent of their respective percentages and multiplying that decimal equivalent against the above-determined amount of pure compound. (ii) The amount claimed as drawback based on the sought chemical element must be deducted from the amounts paid on the imported material that may be claimed on any other drawback claim. Example to paragraph (b)(4): (c) Valuable waste records. (d) Purchase of manufactured or produced articles for exportation or destruction. (e) Multiple claimants General. (2) Procedures Submission of letter. (ii) Blanket waivers and assignments of drawback rights. (f) Retention of records. § 190.27 Time limitations for manufacturing drawback. (a) Direct identification. (b) Substitution. (1) The designated merchandise is used in manufacture or production within 5 years after importation; (2) Within the 5-year period described in paragraph (b)(1) of this section, the exported or destroyed articles, or drawback products, were manufactured or produced; and (3) The completed articles must be exported or destroyed under CBP supervision within 5 years of the date of importation of the designated merchandise, or within 5 years of the earliest date of importation associated with a drawback product. (c) Drawback claims filed before specific or general manufacturing drawback ruling approved or acknowledged. § 190.28 Person entitled to claim manufacturing drawback. The exporter (or destroyer) will be entitled to claim drawback, unless the exporter (or destroyer), by means of a certification, assigns the right to claim drawback to the manufacturer, producer, importer, or intermediate party. Such certification must accompany each claim and also affirm that the exporter (or destroyer) has not claimed and will not itself claim drawback or assign the right to claim drawback on the particular exportation or destruction to any other party. The certification provided for under this section may be a blanket certification for a stated period. Drawback is paid to the claimant, who may be the manufacturer, producer, intermediate party, importer, or exporter (or destroyer). § 190.29 Certification of bill of materials or formula. At the time of filing a claim under 19 U.S.C. 1313(a) or (b), the claimant must certify the following: (a) The claimant is in possession of the applicable bill of materials or formula for the exported or destroyed article(s), which will be promptly provided upon request; (b) The bill of materials or formula identifies the imported and/or substituted merchandise and the exported or destroyed article(s) by their 8-digit HTSUS subheading numbers; and (c) The bill of materials or formula identifies the manufactured quantities of the imported and/or substituted merchandise and the exported or destroyed article(s). Subpart C—Unused Merchandise Drawback § 190.31 Direct identification unused merchandise drawback. (a) General. (b) Time of exportation or destruction. (c) Operations performed on imported merchandise. § 190.32 Substitution unused merchandise drawback. (a) General. see (b) Allowable refund Exportation. (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. (2) Destruction. (i) The amount of duties, taxes, and fees paid with respect to the imported merchandise (after the value of the imported merchandise has been reduced by the value of materials recovered during destruction as provided in 19 U.S.C. 1313(x)); or (ii) The amount of duties, taxes, and fees that would apply to the destroyed article if the destroyed article had been imported (after the value of the imported merchandise has been reduced by the value of materials recovered during destruction as provided in 19 U.S.C. 1313(x)). (3) Federal excise tax. (c) Determination of HTSUS classification for substituted merchandise. (d) Claims for wine Alternative substitution standard. (2) Allowable refund. (3) Required certification. (i) The claimant specifies on the drawback entry that the basis for substitution is the alternative substitution standard for wine; and (ii) The claimant provides a certification, as part of the complete claim ( see (A) The imported wine and the exported wine are a Class 1 grape wine (as defined in 27 CFR 4.21(a)(1)) of the same color ( i.e., (B) The imported wine and the exported wine are table wines (as defined in 27 CFR 4.21(a)(2)) and the alcoholic content does not exceed 14 percent by volume; and (C) The price variation between the imported wine and the exported wine does not exceed 50 percent. (e) Operations performed on substituted merchandise. (f) Designation by successor; 19 U.S.C. 1313(s) General rule. (i) Imported merchandise which the predecessor, before the date of succession, imported; or (ii) Imported and/or substituted merchandise that was transferred to the predecessor from the person who imported and paid duty on the imported merchandise. (2) Drawback successor. (i) All or substantially all of the rights, privileges, immunities, powers, duties, and liabilities of the predecessor; or (ii) The assets and other business interests of a division, plant, or other business unit of such predecessor, but only if in such transfer the value of the transferred realty, personalty, and intangibles (other than drawback rights, inchoate or otherwise) exceeds the value of all transferred drawback rights, inchoate or otherwise. (3) Certifications and required evidence Records of predecessor. (ii) Merchandise not otherwise designated. (iii) Value of transferred property. (iv) Review by CBP. § 190.33 Person entitled to claim unused merchandise drawback. (a) Direct identification. (2) The exporter or destroyer may waive the right to claim drawback and assign such right to the importer or any intermediate party. A drawback claimant under 19 U.S.C. 1313(j)(1) other than the exporter or destroyer must secure and retain a certification signed by the exporter or destroyer waiving the right to claim drawback, and stating that it did not and will not authorize any other party to claim the exportation or destruction for drawback ( see (b) Substitution. (i) In situations where the exporter or destroyer of the substituted merchandise is also the importer of the imported merchandise, that party will be entitled to claim drawback. (ii) In situations where the person who imported and paid the duty on the imported merchandise transfers the imported merchandise, substituted merchandise, or any combination of imported and substituted merchandise to the person who exports or destroys that merchandise, the exporter or destroyer will be entitled to claim drawback. (Any such transferred merchandise, regardless of its origin, will be treated as imported merchandise for purposes of drawback under 19 U.S.C. 1313(j)(2), and any retained merchandise will be treated as domestic merchandise.) (iii) In situations where the transferred merchandise described in paragraph (b)(1)(ii) of this section is the subject of further transfer(s), such transfer(s) must be documented by records, including records kept in the normal course of business, and the exporter or destroyer will be entitled to claim drawback (multiple substitutions are not permitted). (2) The exporter or destroyer may waive the right to claim drawback and assign such right to the importer or to any intermediate party, provided that the claimant had possession of the substituted merchandise prior to its exportation or destruction. A drawback claimant under 19 U.S.C. 1313(j)(2) other than the exporter or destroyer must secure and retain a certification signed by the exporter or destroyer that such party waived the right to claim drawback, and stating that it did not and will not authorize any other party to claim the exportation or destruction for drawback ( see § 190.34 Transfer of merchandise. Any transfer of merchandise ( see § 190.35 Notice of intent to export or destroy; examination of merchandise. (a) Notice. see (b) Required information. (c) Decision to examine or to waive examination. see see (d) Time and place of examination. (e) Extent of examination. § 190.36 Failure to file Notice of Intent to Export, Destroy, or Return Merchandise for Purposes of Drawback. (a) General; application. (1) Application. (i) Required information. (A) Name, address, and Internal Revenue Service (IRS) number (with suffix) of applicant; (B) Name, address, and IRS number(s) (with suffix(es)) of exporter(s), if applicant is not the exporter; (C) Export period covered by this application; (D) Commodity/product lines of imported and exported merchandise covered in this application (and the applicable HTSUS numbers); (E) The origin of the above merchandise; (F) Estimated number of export transactions covered in this application; (G) Estimated number of drawback claims and estimated time of filing those claims to be covered in this application; (H) The port(s) of exportation; (I) Estimated dollar value of potential drawback claims to be covered in this application; (J) The relationship between the parties involved in the import and export transactions; and (K) Provision(s) of drawback covered under the application; (ii) Written declarations regarding: (A) The reason(s) that CBP was not notified of the intent to export; and (B) Whether the applicant, to the best of its knowledge, will have future exportations or destructions on which unused merchandise drawback might be claimed; and (iii) A certification that the following documentary evidence will be made available for CBP to review upon request: (A) For the purpose of establishing that the imported merchandise was not used in the United States (for purposes of drawback under 19 U.S.C. 1313(j)(1)) or that the exported or destroyed merchandise was not used in the United States and satisfied the requirements for substitution with the imported merchandise (for purposes of drawback under 19 U.S.C. 1313(j)(2)), and, as applicable: ( 1 ( 2 ( 3 (B) Evidence establishing compliance with all other applicable drawback requirements. (2) One-time use. (3) Claims filed pending disposition of application. (b) CBP action. 1 3 (1) Information provided by the claimant in the written application; (2) Any of the information listed in paragraphs (a)(1)(iii)(A)( 1 3 (3) The applicant's prior record with CBP. (c) Time for CBP action. (d) Appeal of denial of application. (e) Future intent to export or destroy unused merchandise. see see see § 190.37 Destruction under CBP supervision. A claimant may destroy merchandise and obtain unused merchandise drawback by complying with the procedures set forth in § 190.71 relating to destruction. § 190.38 Recordkeeping. (a) Maintained by claimant; by others. (b) Accounting for the merchandise. (1) To determine, and CBP to verify, the applicable import entry or transfer(s) of drawback-eligible merchandise; (2) To determine, and CBP to verify, the applicable exportation or destruction; and (3) To identify, with respect to the import entry or any transfer(s) of drawback-eligible merchandise, the imported merchandise designated as the basis for the drawback claim. Subpart D—Rejected Merchandise § 190.41 Rejected merchandise drawback. Section 313(c) of the Act, as amended (19 U.S.C. 1313(c)), provides for drawback upon the exportation or destruction under CBP supervision of imported merchandise which has been entered, or withdrawn from warehouse, for consumption, duty-paid, and which: Does not conform to sample or specifications; has been shipped without the consent of the consignee; or has been determined to be defective as of the time of importation; or ultimately sold at retail by the importer or the person who received the merchandise from the importer, and for any reason returned to and accepted by the importer or the person who received the merchandise from the importer. The total amount of drawback allowable will be 99 percent of the amount of duties paid with respect to the imported, duty-paid merchandise. See § 190.42 Procedures and supporting documentation. (a) Time limit for exportation or destruction. (b) Required documentation. see see (1) Submit a statement signed by the importer and every other person, other than the ultimate purchaser, that owned the goods, that no other claim for drawback was made on the goods by any other person; and (2) Certify that records are available to support the statement required in paragraph (b)(1) of this section. (c) Notice. see (d) Required information. (e) Decision to waive examination. see see (f) Time and place of examination. (g) Extent of examination. (h) Drawback claim. see see (i) Exportation. see § 190.43 Unused merchandise drawback claim. Rejected merchandise may be the subject of an unused merchandise drawback claim under 19 U.S.C. 1313(j)(1), in accordance with subpart C of this part, to the extent that the merchandise qualifies therefor. § 190.44 [Reserved] § 190.45 Returned retail merchandise. (a) Special rule for substitution. (b) Eligibility requirements. (2) The claimant must also show by evidence satisfactory to CBP that drawback may be claimed by— (i) Designating an entry of merchandise that was imported within 1 year before the date of exportation or destruction of the merchandise described in paragraph (a) under CBP supervision. (ii) Certifying that the same 8-digit HTSUS subheading number and specific product identifier (such as part number, SKU, or product code) apply to both the merchandise designated for drawback (in the import documentation) and the returned merchandise. (c) Allowable refund. (d) Denial of claims. Subpart E—Completion of Drawback Claims § 190.51 Completion of drawback claims. (a) General Complete claim. (2) Drawback entry. (i) Claimant identification number; (ii) Broker identification number (if applicable); (iii) If requesting accelerated payment under § 190.92, surety code and bond type (and, for single transaction bonds, also the bond number and amount of bond); (iv) Port code for the drawback office where the claim is being filed; (v) Drawback entry number and provision(s) under which drawback is claimed; (vi) Statement of eligibility for applicable privileges (as provided for in subpart I of this part); (vii) Amount of refund claimed for each of relevant duties, taxes, and fees (calculated to two decimal places); (viii) For each designated import entry line item, the entry number and the line item number designating the merchandise, a description of the merchandise, a unique import tracing identification number(s) (ITIN) (used to associate the imported merchandise and any substituted merchandise with any intermediate products (if applicable) and the drawback-eligible exported or destroyed merchandise or finished article(s)), as well as the following information for the merchandise designated as the basis for the drawback claim: The 10-digit HTSUS classification, amount of duties paid, applicable entered value ( see (ix) For manufacturing claims under 19 U.S.C. 1313(a) or (b), each associated ruling number, along with the following information: Corresponding information for the factory location, the basis of the claim (as provided for in § 190.23), the date(s) of use of the imported and/or substituted merchandise in manufacturing or processing (or drawback product containing the imported or substituted merchandise), a description of and the 10-digit HTSUS classification for the drawback product or finished article that is manufactured or produced, the quantity and unit of measure for the drawback product or finished article that is manufactured or produced, the disposition of the drawback product or finished article that is manufactured or produced (transferred, exported, or destroyed), unique manufacture tracing identification number(s) (MTIN) (used to associate the manufactured merchandise, including any intermediate products, with the drawback-eligible exported or destroyed finished article(s)), and a certification from the claimant that provides as follows: “The article(s) described above were manufactured or produced and disposed of as stated herein in accordance with the drawback ruling on file with CBP and in compliance with applicable laws and regulations.”; (x) Indicate whether the designated imported merchandise, other substituted merchandise, or finished article (for manufacturing claims) was transferred to the drawback claimant prior to the exportation or destruction of the eligible merchandise, and for unused merchandise drawback claims under 19 U.S.C. 1313(j), provide a certification from the client that provides as follows: “The undersigned hereby certifies that the exported or destroyed merchandise herein described is unused in the United States and further certifies that this merchandise was not subjected to any process of manufacture or other operation except the allowable operations as provided for by regulation.”; (xi) Indicate whether the eligible merchandise was exported or destroyed and provide the applicable 10-digit HTSUS or Department of Commerce Schedule B classification, quantity, and unit of measure (the unit of measure specified must be the same as that which was required under the HTSUS for the designated imported merchandise in paragraph (viii) for substitution unused merchandise drawback claims) and, for claims under 19 U.S.C. 1313(c), specify the basis as one of the following: (A) Merchandise does not conform to sample or specifications; (B) Merchandise was defective at time of importation; (C) Merchandise was shipped without consent of the consignee; or (D) Merchandise sold at retail and returned to the importer or the person who received the merchandise from the importer; (xii) For eligible merchandise that was exported, the unique export identifier (the number used to associate the export transaction with the appropriate documentary evidence of exportation), export destination, name of exporter, the applicable comparative value pursuant to § 190.11(b) ( see (xiii) For eligible merchandise that was destroyed, the name of the destroyer and, if substituted, the applicable comparative value pursuant to § 190.11(c) ( see (xiv) For substitution unused merchandise drawback claims under 19 U.S.C. 1313(j)(2), a certification from the claimant that provides as follows: “The undersigned hereby certifies that the substituted merchandise is unused in the United States and that the substituted merchandise was in our possession prior to exportation or destruction.”; (xv) For NAFTA and USMCA drawback claims provided for in subpart E of parts 181 and 182, the foreign entry number and date of entry, the HTSUS classification for the foreign entry, the amount of duties paid for the foreign entry and the applicable exchange rate, and, if applicable, a certification from the claimant that provides as follows: “Same condition—The undersigned certifies that the merchandise herein described is in the same condition as when it was imported under the above import entry(s) and further certifies that this merchandise was not subjected to any process of manufacture or other operation except the allowable operations as provided for by regulation.”; and (xvi) All certifications required in this part and as otherwise deemed necessary by CBP to establish compliance with the applicable laws and regulations, as well as the following declaration: “The undersigned acknowledges statutory requirements that all records supporting the information on this document are to be retained by the issuing party for a period of 3 years from the date of liquidation of the drawback claim. All required documentation that must be uploaded in accordance with 19 CFR 190.51 will be provided to CBP within 24 hours of the filing of the drawback claim. The undersigned acknowledges that a false certification of the foregoing renders the drawback claim incomplete and subject to denial. The undersigned is fully aware of the sanctions provided in 18 U.S.C. 1001, and 18 U.S.C. 550, and 19 U.S.C. 1593a.” (3) Election of line item designation for imported merchandise. (4) Limitation on line item eligibility for imported merchandise. (b) Drawback due Claimant required to calculate drawback. (i) Direct identification. see (ii) Substitution. (2) Merchandise processing fee apportionment calculation. (i) Relative value ratio for each line item. The value of each line item of entered merchandise subject to a merchandise processing fee is calculated (to four decimal places) by dividing the value of the line item subject to the fee by the total value of entered merchandise subject to the fee. The result is the relative value ratio. (ii) Merchandise processing fee apportioned to each line item. To apportion the merchandise processing fee to each line item, the relative value ratio for each line item is multiplied by the merchandise processing fee paid. (iii) Amount of merchandise processing fee eligible for drawback per line item. The amount of merchandise processing fee apportioned to each line item is multiplied by 99 percent to calculate that portion of the fee attributable to each line item that is eligible for drawback. (iv) Amount of merchandise processing fee eligible for drawback per unit of merchandise. To calculate the amount of a merchandise processing fee eligible for drawback per unit of merchandise, the line item amount that is eligible for drawback is divided by the number of units covered by that line item (to two decimal places). (v) Limitation on amount of merchandise processing fee eligible for drawback for substitution claims. The amount of a merchandise processing fee eligible for drawback per unit of merchandise for drawback claims based upon substitution is subject to the limitations set forth in §§ 190.22(a)(1)(ii) (manufacturing claims) and 190.32(b) (unused merchandise claims), as applicable. Example 1: Line item 1—5,000 articles valued at $10 each total $50,000 Line item 2—6,000 articles valued at $15 each total $90,000 Line item 3—10,000 articles valued at $20 each total $200,000 Total units = 21,000 Total value = $340,000 Merchandise processing fee = $485 (for purposes of this example, the fee cap of $485 is assumed; see 19 CFR 24.23 for the current amount consistent with 19 U.S.C. 58c(a)(9)(B)(i)). Line item relative value ratios. Merchandise processing fee apportioned to each line item. Amount of merchandise processing fee eligible for drawback per line item. Amount of merchandise processing fee eligible for drawback per unit of merchandise. Example 2. This example illustrates the treatment of dutiable merchandise that is exempt from the merchandise processing fee and duty-free merchandise that is subject to the merchandise processing fee. Line item 1—700 meters of printed cloth valued at $10 per meter (total value $7,000) that is exempt from the merchandise processing fee under 19 U.S.C. 58c(b)(8)(B)(iii) Line item 2—15,000 articles valued at $100 each (total value $1,500,000) Line item 3—10,000 duty-free articles valued at $50 each (total value $500,000) The relative value ratios are calculated using line items 2 and 3 only, as there is no merchandise processing fee imposed by reason of importation on line item 1. Line item 2—1,500,000 ÷ 2,000,000 = .75 (line items 2 and 3 form the total value of the merchandise subject to the merchandise processing fee). Line item 3—500,000 ÷ 2,000,000 = .25. If the total merchandise processing fee paid was $485, the amount of the fee attributable to line item 2 is $363.75 (.75 × $485 = $363.75). The amount of the fee attributable to line item 3 is $121.25 (.25 × $485 = $121.25). The amount of merchandise processing fee eligible for drawback for line item 2 is $360.1125 (.99 × $363.75). The amount of fee eligible for line item 3 is $120.0375 (.99 × $121.25). The amount of drawback on the merchandise processing fee attributable to each unit of line item 2 is $.0240 ($360.1125 ÷ 15,000 = $.0240). The amount of drawback on the merchandise processing fee attributable to each unit of line item 3 is $.0120 ($120.0375 ÷ 10,000 = $.0120). If 1,000 units of line item 2 were exported, the drawback attributable to the merchandise processing fee is $24.00 ($.0240 × 1,000 = $24.00). (3) Calculations for all other duties, taxes, and fees General. (ii) Examples. Example 1: Ad valorem duty rate. Apportionment of the duties paid (and available for refund) will be based on the application of the duty rates to the per unit values of the imported merchandise. The per unit values are based on the invoice values unless the method of refund calculation is per unit averaging, which would require equal apportionment of the duties paid over the quantity of imported merchandise covered by the line item upon which the imported merchandise was reported on the import entry summary. As a result, the amount of duties available for refund will vary depending on the method used to calculate refunds. Example 2: Specific duty rate. No apportionment of the duties paid is required to determine the amount available for refund. A fixed duty rate is applicable to each unit of the imported merchandise based on quantity. This fixed rate will not vary based on the per unit values of the imported merchandise and, as a result, there is no impact on the amount of duties available for refunds (regardless of whether the refunds are calculated based on invoice values or per unit averaging). Example 3: Compound duty rate. A compound duty rate is a combination of an ad valorem duty rate and a specific duty rate, with both rates applied to the same imported merchandise. As a result, a combination of the calculations discussed in paragraphs (a) and (b) of this section will apply when calculating the amount of duties paid that are available for refund. (4) Limitation. (c) HTSUS classification or Schedule B commodity number s) General. (i) Designated imported merchandise. (ii) Substituted merchandise on manufacturing claims. (A) If the substituted merchandise was imported, the HTSUS classification applicable at the time of entry (e.g., as required to be reported on the applicable entry summary(s) and other entry documentation); or, (B) If the substituted merchandise was not imported, the HTSUS classification that would have been reported to CBP for the applicable entry summary(s) and other entry documentation, for the domestically produced substituted merchandise, at the time of entry of the designated imported merchandise. (iii) Exported merchandise or articles. see, (iv) Destroyed merchandise or articles. (A) if the HTSUS classification is reported, then it must be the HTSUS classification that would have been applicable to the destroyed merchandise or articles if they had been entered for consumption at the time of destruction; or (B) if the Schedule B commodity number is reported, then it must be the Schedule B commodity number that would have been reported for the destroyed merchandise or articles if the EEI had been required for an exportation at the time of destruction. (2) Changes to classification. (d) Method of filing. (e) Time of filing General. (i) Official date of filing. (ii) Abandonment. (iii) Special timeframes. (2) Major disaster. (i) The claimant establishes to the satisfaction of CBP that the claimant was unable to file the drawback claim because of an event declared by the President to be a major disaster, within the meaning given to that term in 42 U.S.C. 5122(2), on or after January 1, 1994; and (ii) The claimant files a request for such extension with CBP no later than 1 year from the last day of the 5-year period referred to in paragraph (e)(1) of this section. (3) Record retention. [83 FR 64997, Dec. 18, 2018, as amended by CBP Dec. 21-10, 86 FR 35594, July 6, 2021] § 190.52 Rejecting, perfecting or amending claims. (a) Rejecting the claim. see see (b) Perfecting the claim; additional evidence required. (1) Records or other documentary evidence of exportation, as provided for in § 190.72, which shows that the articles were shipped by the person filing the drawback entry, or a letter of endorsement from the exporter which must be attached to such records or other documentary evidence, showing that the party filing the entry is authorized to claim drawback and receive payment (the claimant must have on file and make available to CBP upon request, the endorsement from the exporter assigning the right to claim drawback); (2) A copy of the import entry and invoice annotated for the merchandise identified or designated; (3) A copy of the export invoice annotated to indicate the items on which drawback is being claimed; and (4) Records documenting the transfer of the merchandise including records kept in the normal course of business upon which the claim is based ( see (c) Amending the claim; supplemental filing. § 190.53 Restructuring of claims. (a) General. (1) The number of transactions of the claimant (imports and exports); (2) The value of the claims; (3) The frequency of claims; (4) The product or products being claimed; and (5) For 19 U.S.C. 1313(a) and 1313(b) claims, the provisions, as applicable, of the general manufacturing drawback ruling or the specific manufacturing drawback ruling. (b) Exemption from restructuring; criteria. (1) Complexities caused by multiple commodities or the applicable general manufacturing drawback ruling or the specific manufacturing drawback ruling; (2) Variable and conflicting manufacturing and inventory periods (for example, financial, accounting and manufacturing records maintained are significantly different); (3) Complexities caused by multiple manufacturing locations; (4) Complexities caused by difficulty in adjusting accounting and inventory records (for example, records maintained—financial or accounting—are significantly different); and/or (5) Complexities caused by significantly different methods of operation. Subpart F—Verification of Claims § 190.61 Verification of drawback claims. (a) Authority. (b) Method. (c) Liquidation. (d) Errors in specific or general manufacturing drawback rulings Specific manufacturing drawback ruling; action by CBP. see (2) General manufacturing drawback ruling. see (3) Action by CBP Headquarters. see § 190.62 Penalties. (a) Criminal penalty. (b) Civil penalty. § 190.63 Liability for drawback claims. (a) Liability of claimants. (b) Liability of importers. (1) The amount of duties, taxes, and fees that the person claimed with respect to the imported merchandise; or (2) The amount of duties, taxes, and fees that the importer authorized the other person to claim with respect to the imported merchandise. (c) Joint and several liability. Subpart G—Exportation and Destruction § 190.71 Drawback on articles destroyed under CBP supervision. (a) Procedure. (b) Evidence of destruction. (c) Completion of drawback entry. see see (d) Deduction for value of recovered materials. § 190.72 Proof of exportation. (a) Required export data. see (1) Date of export; (2) Name of exporter; (3) Description of the goods; (4) Quantity and unit of measure; (5) Schedule B number or HTSUS number; and (6) Country of ultimate destination. (b) Supporting documentary evidence. (1) Records or other documentary evidence of exportation (originals or copies) issued by the exporting carrier, such as a bill of lading, air waybill, freight waybill, Canadian Customs manifest, and/or cargo manifest; (2) Records from a CBP-approved electronic export system of the United States Government (§ 190.73); (3) Official postal records (originals or copies) which evidence exportation by mail (§ 190.74); (4) Notice of lading for supplies on certain vessels or aircraft (§ 190.112); or (5) Notice of transfer for articles manufactured or produced in the United States which are transferred to a foreign trade zone (§ 190.183). § 190.73 Electronic proof of exportation. Records kept through an electronic export system of the United States Government may be presented as actual proof of exportation only if CBP has officially approved the use of that electronic export system as proof of compliance for drawback claims. Official approval will be published as a general notice in the Customs Bulletin. § 190.74 Exportation by mail. If the merchandise on which drawback is to be claimed is exported by mail or parcel post, the official postal records (original or copies) which describe the mail shipment will be sufficient to prove exportation. The postal record must be identified on the drawback entry, and must be retained by the claimant in their records and made available to CBP upon request ( see § 190.75 Exportation by the Government. (a) Claim by U.S. Government. see (b) Claim by supplier. § 190.76 [Reserved] Subpart H—Liquidation and Protest of Drawback Entries § 190.81 Liquidation. (a) Time of liquidation. (1) Liquidation of the designated import entry or entries becomes final pursuant to paragraph (e) of this section; or (2) Deposit of estimated duties on the imported merchandise and before liquidation of the designated import entry or entries. (b) Claims based on estimated duties. see (2) However, if final liquidation of the import entry discloses that the total amount of import duty is different from the total estimated duties deposited, except in those cases when drawback is 100% of the duty, the party responsible for the payment of liquidated duties, as applicable, will: (i) Be liable for 1 percent of all increased duties found to be due on that portion of merchandise recorded on the drawback entry; or (ii) Be entitled to a refund of 1 percent of all excess duties found to have been paid as estimated duties on that portion of the merchandise recorded on the drawback entry. (c) Claims based on voluntary tenders or other payments of duties General. see (i) The tender or payment is specifically identified as duty on a specifically identified entry, or withdrawal from warehouse, for consumption; (ii) Liquidation of the specifically identified entry, or withdrawal from warehouse, for consumption became final prior to such tender or payment; and (iii) Liquidation of the drawback entry in which that specifically identified import entry, or withdrawal from warehouse, for consumption is designated has not become final. (2) Written request and waiver. (d) Claims based on liquidated duties. (e) Liquidation procedure. General. (2) Liquidation by operation of law. Liquidated import entries. see (ii) Unliquidated import entries. see (f) Relative value; multiple products Distribution. (2) Values. (g) Payment. § 190.82 Person entitled to claim drawback. Unless otherwise provided in this part ( see § 190.83 Person entitled to receive payment. Drawback is paid to the claimant ( see § 190.84 Protests. Procedures to protest the denial, in whole or in part, of a drawback entry must be in accordance with part 174 of this chapter (19 CFR part 174). Subpart I—Waiver of Prior Notice of Intent To Export or Destroy; Accelerated Payment of Drawback § 190.91 Waiver of prior notice of intent to export or destroy. (a) General Scope. (2) Effective date for claimants with existing approval. (3) Limited successorship for waiver of prior notice. see, (b) Application Who may apply. (2) Contents of application. (i) Required information: (A) Name, address, and Internal Revenue Service (IRS) number (with suffix) of applicant; (B) Name, address, and Internal Revenue Service (IRS) number (with suffix) of current exporter(s) or destroyer(s) (if more than 3 exporters or destroyers, such information is required only for the 3 most frequently used exporters or destroyers), if applicant is not the exporter or destroyer; (C) Export or destruction period covered by this application; (D) Commodity/product lines of imported and exported or destroyed merchandise covered by this application; (E) Origin of merchandise covered by this application; (F) Estimated number of export transactions or destructions during the next calendar year covered by this application; (G) Port(s) of exportation or location of destruction facilities to be used during the next calendar year covered by this application; (H) Estimated dollar value of potential drawback during the next calendar year covered by this application; (I) The relationship between the parties involved in the import and export transactions or destructions; and (J) Provision(s) of drawback covered by the application. (ii) A written declaration whether or not the applicant has previously been denied a waiver request, or had an approval of a waiver revoked, by any other drawback office, and whether the applicant has previously requested a 1-time waiver of prior notice under § 190.36, and whether such request was approved or denied; and (iii) A certification that the following documentary evidence will be made available for CBP review upon request: (A) For the purpose of establishing that the imported merchandise was not used in the United States (for purposes of drawback under 19 U.S.C. 1313(j)(1)) or that the exported or destroyed merchandise was not used in the United States and satisfies the requirements for substitution with the imported merchandise (for purposes of drawback under 19 U.S.C. 1313(j)(2)) or that the rejected merchandise that was exported or destroyed satisfies the relevant requirements (for purposes of drawback under 19 U.S.C. 1313(c)), and, as applicable: (1) (2) (3) (B) Any other evidence establishing compliance with other applicable drawback requirements, upon CBP's request under paragraph (b)(2)(iii) of this section. (3) Samples of records to accompany application. (c) Action on application CBP review. 1 3 (i) The presence or absence of unresolved CBP charges (duties, taxes, or other debts owed CBP); (ii) The accuracy of the claimant's past drawback claims; (iii) Whether waiver of prior notice was previously revoked or suspended; and (iv) The presence or absence of any failure to present merchandise to CBP for examination after CBP had timely notified the party filing a Notice of Intent to Export, Destroy, or Return Merchandise for Purposes of Drawback on CBP Form 7553 of CBP's intent to examine the merchandise ( see (2) Approval. (3) Denial. (d) Stay. (e) Proposed revocation. (f) Action by drawback office controlling. (g) Appeal of denial or challenge to proposed revocation. § 190.92 Accelerated payment. (a) General Scope. see, (2) Effective date for claimants with existing approval. (3) Limited successorship for approval of accelerated payment. see, (b) Application for approval; contents. (1) Required information. (i) Company name and address; (ii) Internal Revenue Service (IRS) number (with suffix); (iii) Identity (by name and title) of the person in claimant's organization who will be responsible for the drawback program; (iv) Description of the bond coverage the applicant intends to use to cover accelerated payments of drawback ( see (A) Identity of the surety to be used; (B) Dollar amount of bond coverage for the first year under the accelerated payment procedure; and (C) Procedures to ensure that bond coverage remains adequate (that is, procedures to alert the applicant when and if its accelerated payment potential liability exceeds its bond coverage); (v) Description of merchandise and/or articles covered by the application; (vi) Provision(s) of drawback covered by the application; and (vii) Estimated dollar value of potential drawback during the next 12-month period covered by the application. (2) Previous applications. (3) Certification of compliance. (4) Description of claimant's drawback program. (i) The name of the official in the claimant's organization who is responsible for oversight of the claimant's drawback program; (ii) The procedures and controls demonstrating compliance with the statutory and regulatory drawback requirements; (iii) The parameters of claimant's drawback recordkeeping program, including the retention period and method (for example, paper, electronic, etc.); (iv) A list of the records that will be maintained, including at least sample import documents, sample export documents or evidence of destruction, sample inventory and transportation documents (if applicable), sample laboratory or other documents establishing the qualification of merchandise or articles for substitution under the drawback law (if applicable), and sample manufacturing documents (if applicable); (v) The procedures that will be used to notify CBP of changes to the claimant's drawback program, variances from the procedures described in this application, and violations of the statutory and regulatory drawback requirements; and (vi) The procedures for an annual review by the claimant to ensure that its drawback program complies with the statutory and regulatory drawback requirements and that CBP is notified of any modifications from the procedures described in this application. (c) Sample application. (d) Bond required. (e) Action on application CBP review. (i) The presence or absence of unresolved CBP charges (duties, taxes, fees, or other debts owed CBP); (ii) The accuracy of the claimant's past drawback claims; and (iii) Whether accelerated payment of drawback or waiver of prior notice of intent to export was previously revoked or suspended. (2) Notification to applicant. (3) Approval. (4) Denial. (f) Revocation. (g) Action by drawback office controlling. (h) Appeal of denial or challenge to proposed revocation. (i) Payment. see § 190.93 Combined applications. An applicant for the procedures provided for in §§ 190.91 and 190.92 may apply for only one procedure, both procedures separately, or both procedures in one application package ( see Subpart J—Internal Revenue Tax on Flavoring Extracts and Medicinal or Toilet Preparations (Including Perfumery) Manufactured From Domestic Tax-Paid Alcohol § 190.101 Drawback allowance. (a) Drawback. (b) Shipment to Puerto Rico, the Virgin Islands, Guam, and American Samoa. § 190.102 Procedure. (a) General. see (b) Manufacturing record. (c) Additional information required on the manufacturer's application for a specific manufacturing drawback ruling. (d) Variance in alcohol content Variance of more than 5 percent. (2) Variance of 5 percent or less. (e) Time period for completing claims. (f) Filing of drawback entries on duty-paid imported merchandise and tax-paid alcohol. (g) Description of the alcohol. § 190.103 Additional requirements. (a) Manufacturer claims domestic drawback. (b) Manufacturer does not claim domestic drawback Submission of statement. (2) Contents of the statement. (i) Quantity and description of the exported products; (ii) Identity of the alcohol used by serial number of package or tank car; (iii) Name and registry number of the distilled spirits plant from which the alcohol was withdrawn; (iv) Date of withdrawal; (v) Serial number of the applicable record of tax determination ( see (vi) Drawback office where the claim will be filed. (3) Verification of receipt of the statement. § 190.104 Alcohol and Tobacco Tax and Trade Bureau (TTB) certificates. (a) Request. (b) Contents. (1) Quantity of alcohol in proof gallons; (2) Serial number of each package; (3) Amount of tax paid on the alcohol; (4) Name, registry number, and location of the distilled spirits plant; (5) Date of withdrawal; (6) Name of the manufacturer using the alcohol in producing the exported articles; (7) Address of the manufacturer and its manufacturing plant; and (8) Customs drawback office where the drawback claim will be processed. (c) Extract of TTB certificate. § 190.105 Liquidation. The drawback office will ascertain the final amount of drawback due by reference to the specific manufacturing drawback ruling under which the drawback claimed is allowable. § 190.106 Amount of drawback. (a) Claim filed with TTB. (b) Claim not filed with TTB. (c) No deduction of 1 percent. (d) Payment. Subpart K—Supplies for Certain Vessels and Aircraft § 190.111 Drawback allowance. Section 309 of the Act, as amended (19 U.S.C. 1309), provides for drawback on articles laden as supplies on certain vessels or aircraft of the United States or as supplies including equipment upon, or used in the maintenance or repair of, certain foreign vessels or aircraft. § 190.112 Procedure. (a) General. (b) Notice of lading. (c) Notice of lading. (d) Contents of notice. (1) The name of the vessel or identity of the aircraft on which articles were or are to be laden; (2) The number and kind of packages and their marks and numbers; (3) A description of the articles and their weight (net), gauge, measure, or number; and (4) The name of the exporter. (e) Declaration of Master or other officer Requirement. (2) Filing. (f) Information concerning class or trade. (g) Articles laden or installed on aircraft as equipment or used in the maintenance or repair of aircraft. (h) Fuel laden on vessels or aircraft as supplies Composite notice of lading. see (2) Contents of composite notice. (i) The identity of the vessel or aircraft; (ii) A description of the fuel supplies laden; (iii) The quantity laden; and (iv) The date of lading. (3) Declaration of owner or operator. (i) Desire to land articles covered by notice of lading. Subpart L—Meats Cured With Imported Salt § 190.121 Drawback allowance. Section 313(f) of the Act, as amended (19 U.S.C. 1313(f)), provides for the allowance of drawback upon the exportation of meats cured with imported salt. § 190.122 Procedure. Other provisions of this part relating to direct identification manufacturing drawback will apply to claims for drawback under this subpart insofar as applicable to and not inconsistent with the provisions of this subpart. § 190.123 Refund of duties. Drawback allowed under this subpart will be refunded in aggregate amounts of not less than $100 and will not be subject to the retention of 1 percent of duties paid. Subpart M—Materials for Construction and Equipment of Vessels and Aircraft Built for Foreign Account and Ownership § 190.131 Drawback allowance. Section 313(g) of the Act, as amended (19 U.S.C. 1313(g)), provides for drawback on imported materials used in the construction and equipment of vessels and aircraft built for foreign account and ownership, or for the government of any foreign country, notwithstanding that these vessels or aircraft may not be exported within the strict meaning of the term. § 190.132 Procedure. Other provisions of this part relating to direct identification manufacturing drawback will apply to claims for drawback filed under this subpart insofar as applicable to and not inconsistent with the provisions of this subpart. § 190.133 Explanation of terms. (a) Materials. (b) Foreign account and ownership. (c) Major conversion. see Subpart N—Foreign-Built Jet Aircraft Engines Processed in the United States § 190.141 Drawback allowance. Section 313(h) of the Act, as amended (19 U.S.C. 1313(h)), provides for drawback on the exportation of jet aircraft engines manufactured or produced abroad that have been overhauled, repaired, rebuilt, or reconditioned in the United States with the use of imported merchandise, including parts. § 190.142 Procedure. Other provisions of this part will apply to claims for drawback filed under this subpart insofar as applicable to and not inconsistent with the provisions of this subpart. § 190.143 Drawback entry. (a) Filing of entry. (b) Contents of entry. § 190.144 Refund of duties. Drawback allowed under this subpart will be refunded in aggregate amounts of not less than $100, and will not be subject to the deduction of 1 percent of duties paid. Subpart O—Merchandise Exported From Continuous CBP Custody § 190.151 Drawback allowance. (a) Eligibility of entered or withdrawn merchandise Under 19 U.S.C. 1557 a). (2) Under 19 U.S.C. 1313. see (b) Guantanamo Bay. § 190.152 Merchandise released from CBP custody. No remission, refund, abatement, or drawback of duty will be allowed under this subpart because of the exportation or destruction of any merchandise after its release from Government custody, except in the following cases: (a) When articles are exported or destroyed on which drawback is expressly provided for by law; (b) When prohibited articles have been regularly entered in good faith and are subsequently exported or destroyed pursuant to statute and regulations prescribed by the Secretary of the Treasury; or (c) When articles entered under bond are destroyed within the bonded period, as provided in 19 U.S.C. 1557(c), or destroyed within the bonded period by death, accidental fire, or other casualty, and satisfactory evidence of destruction is furnished to CBP ( see see § 190.153 Continuous CBP custody. (a) Merchandise released under an importer's bond and returned. (b) Merchandise released under Chapter 98, Subchapter XIII, Harmonized Tariff Schedule of the United States HTSUS). (c) Merchandise released from warehouse. (d) Merchandise not warehoused, examined elsewhere than in public stores General rule. (2) Merchandise upon the wharf. § 190.154 Filing the entry. (a) Direct export. (b) Merchandise transported to another port for exportation. § 190.155 Merchandise withdrawn from warehouse for exportation. The regulations in part 18 of this chapter concerning the supervision of lading and certification of exportation of merchandise withdrawn from warehouse for exportation without payment of duty will be followed to the extent applicable. § 190.156 Bill of lading. (a) Filing. (b) Contents. (c) Limitation of the bill of lading. (d) Inability to produce bill of lading. (e) Extracts of bills of lading. § 190.157 [Reserved] § 190.158 Procedures. When the drawback claim has been completed and the bill of lading filed, the reports of inspection and lading made, and the clearance of the exporting conveyance established by the record of clearance in the case of direct exportation or by certificate in the case of transportation and exportation, the drawback office will verify the importation by referring to the import records to ascertain the amount of duty paid on the merchandise exported. To the extent appropriate and not inconsistent with the provisions of this subpart, drawback entries will be liquidated in accordance with the provisions of § 190.81. § 190.159 Amount of drawback. Drawback due under this subpart will not be subject to the deduction of 1 percent. Subpart P—Distilled Spirits, Wines, or Beer Which Are Unmerchantable or Do Not Conform to Sample or Specifications § 190.161 Refund of taxes. Section 5062(c), Internal Revenue Code, as amended (26 U.S.C. 5062(c)), provides for the refund, remission, abatement or credit to the importer of internal revenue taxes paid or determined incident to importation, upon the exportation, or destruction under CBP supervision, of imported distilled spirits, wines, or beer found after entry to be unmerchantable or not to conform to sample or specifications and which are returned to CBP custody. § 190.162 Procedure. The export procedure will be the same as that provided in § 190.42 for rejected merchandise, except that the claimant must be the importer and must comply with all other provisions in this subpart. § 190.163 Documentation. (a) Entry. (b) Documentation. § 190.164 Return to CBP custody. There is no time limit for the return to CBP custody of distilled spirits, wine, or beer subject to refund of taxes under the provisions of this subpart. The claimant must return the merchandise to CBP custody prior to exportation or destruction and claims are subject to the filing deadline set forth in 19 U.S.C. 1313(r)(1). § 190.165 No exportation by mail. Merchandise covered by this subpart must not be exported by mail. § 190.166 Destruction of merchandise. (a) Action by the importer. (b) Action by CBP. § 190.167 Liquidation. No deduction of 1 percent of the internal revenue taxes paid or determined will be made in allowing entries under section 5062(c), Internal Revenue Code, as amended (26 U.S.C. 5062(c)). § 190.168 [Reserved] Subpart Q—Substitution of Finished Petroleum Derivatives § 190.171 General; drawback allowance. (a) General. (b) Allowance of drawback. (1) In cases where there is no manufacture, upon exportation of the imported article, an article of the same kind and quality, or any combination thereof; or (2) In cases where there is a manufacture or production, upon exportation of the manufactured or produced article, an article of the same kind and quality, or any combination thereof. (c) Calculation of drawback. (1) Per unit averaging calculation. (2) Limitations. (3) Federal excise tax. § 190.172 Definitions. The following are definitions for purposes of this subpart only: (a) Qualified article. Qualified article (b) Same kind and quality article. Same kind and quality article (c) Exported article. Exported article § 190.173 Imported duty-paid derivatives (no manufacture). When the basis for drawback under 19 U.S.C. 1313(p) is imported duty-paid petroleum derivatives (that is, not articles manufactured under 19 U.S.C. 1313(a) or (b)), the requirements for drawback are as follows: (a) Imported duty-paid merchandise. (b) Exported article. (c) Exporter. (1) Imported the qualified article in at least the quantity of the exported article; or (2) Purchased or exchanged (directly or indirectly) from an importer an imported qualified article in at least the quantity of the exported article; (d) Time of export. (e) Amount of drawback. § 190.174 Derivatives manufactured under 19 U.S.C. 1313(a) or (b). When the exported article which is the basis for a drawback claim under 19 U.S.C. 1313(p) is petroleum derivatives which were manufactured or produced in the United States and qualify for drawback under the manufacturing drawback law (19 U.S.C. 1313(a) or (b)), the requirements for drawback are as follows: (a) Merchandise. (1) Have been manufactured or produced as described in 19 U.S.C. 1313(a) or (b) from crude petroleum or a petroleum derivative; and (2) Be a “qualified article” as defined in § 190.172(a); (b) Exported article. (c) Exporter. (1) Manufactured or produced the qualified article in at least the quantity of the exported article; or (2) Purchased or exchanged (directly or indirectly) from a manufacturer or producer described in 19 U.S.C. 1313(a) or (b) the qualified article in at least the quantity of the exported article; (d) Manufacture in specific facility. (e) Time of export. (1) During the period provided for in the manufacturer's or producer's specific manufacturing drawback ruling ( see (2) Within 180 days after the close of the period in which the qualified article is manufactured or produced; and (f) Amount of drawback. § 190.175 Drawback claimant; maintenance of records. (a) Drawback claimant. (b) Transfer of merchandise General. (2) Article substituted for the qualified article. (ii) Subject to paragraph (b)(2)(iii) of this section, any intermediate party in the chain of commerce leading to the exporter from the manufacturer, producer, or importer of a qualified article may also transfer to the exporter or to another intermediate party an article of the same kind and quality as the article purchased or exchanged from the prior transferor (whether the manufacturer, producer, importer, or another intermediate transferor) in a quantity not greater than the quantity of the article purchased or exchanged. (iii) Under either paragraph (b)(2)(i) or (b)(2)(ii) of this section, the article transferred, regardless of its origin (imported, manufactured, substituted, or any combination thereof), will be the qualified article eligible for drawback for purposes of section 1313(p). (c) Maintenance of records. § 190.176 Procedures for claims filed under 19 U.S.C. 1313(p). (a) Applicability. (b) Administrative efficiency, frequency of claims, and restructuring of claims. (c) Imported duty-paid derivatives no manufacture). (1) The claim is filed on the drawback entry; and (2) The claimant provides a certification stating the basis (such as company records, or customer's written certification), for the information contained therein and certifying that: (i) The exported merchandise was exported within 180 days of entry of the designated, imported merchandise; (ii) The qualified article and the exported article are commercially interchangeable or both articles are subject to the same 8-digit HTSUS subheading number; (iii) To the best of the claimant's knowledge, the designated imported merchandise, the qualified article and the exported article have not served and will not serve as the basis of any other drawback claim; (iv) Evidence in support of the certification will be retained by the person providing the certification for 3 years after liquidation of the claim; and (v) Such evidence will be available for verification by CBP. (d) Derivatives manufactured under 19 U.S.C. 1313(a) or (b). (1) The claim is filed on the drawback entry; (2) All documents required to be filed with a manufacturing claim under 19 U.S.C. 1313(a) or (b) are filed with the claim; (3) The claim identifies the specific refinery or production facility at which the derivatives were manufactured or produced; (4) The claim states the period of manufacture for the derivatives; and (5) The claimant provides a certification stating the basis (such as company records or a customer's written certification), for the information contained therein and certifying that: (i) The exported merchandise was exported during the manufacturing period for the qualified article or within 180 days after the close of that period; (ii) The qualified article and the exported article are commercially interchangeable or both articles are classifiable under the same 8-digit HTSUS subheading number; (iii) To the best of the claimant's knowledge, the designated imported merchandise, the qualified article and the exported article have not served and will not serve as the basis of any other drawback claim; (iv) Evidence in support of the certification will be retained by the person providing the certification for 3 years after liquidation of the claim; and (v) Such evidence will be available for verification by CBP. Subpart R—Merchandise Transferred to a Foreign Trade Zone From Customs Territory § 190.181 Drawback allowance. The fourth proviso of section 3 of the Foreign Trade Zones Act of June 18, 1934, as amended (19 U.S.C. 81c), provides that merchandise transferred to a foreign trade zone for the sole purpose of exportation, storage or destruction (except destruction of distilled spirits, wines, and fermented malt liquors), will be considered to be exported for the purpose of drawback, provided there is compliance with the regulations of this subpart. § 190.182 Zone-restricted merchandise. Merchandise in a foreign trade zone for the purposes specified in § 190.181 will be given status as zone-restricted merchandise on proper application ( see § 190.183 Articles manufactured or produced in the United States. (a) Procedure for filing documents. (b) Notice of transfer Evidence of export. (2) Filing procedures. (3) Contents of notice. (i) Number and location of the foreign trade zone; (ii) Number and kind of packages and their marks and numbers; (iii) Description of the articles, including weight (gross and net), gauge, measure, or number; and (iv) Name of the transferor. (c) Action of foreign trade zone operator. see (d) Drawback entries. Declaration of Transfer to a Foreign Trade Zone I,________ ________(member of firm, officer representing corporation, agent, or attorney), of ________, declare that, to the best of my knowledge and belief, the particulars of transfer stated in this entry, the notices of transfer, and receipts are correct, and that the merchandise was transferred to a foreign trade zone for the sole purpose of exportation, destruction, or storage, not to be removed from the foreign trade zone for domestic consumption. Dated: Transferor or agent § 190.184 Merchandise transferred from continuous CBP custody. (a) Procedure for filing claims. (b) Drawback entry. (c) Certification by zone operator. see (d) Modification of drawback entry Indication of transfer. (2) Endorsement. Certification by Foreign Trade Zone Operator The merchandise described in the entry was received from ________ on ________, 20____ in Foreign Trade Zone No. ____, (City and State) Exceptions (Name and title) By (Name of operator) (3) Transferor's declaration. Transferor's Declaration I, ________ ________, of the firm of ________, declare that the merchandise described in this entry was duly entered at the customhouse on arrival at this port; that the duties thereon have been paid as specified in this entry; and that it was transferred to Foreign Trade Zone No. ____, located at ____, (City and State) for the sole purpose of exportation, destruction, or storage, not to be removed from the foreign trade zone for domestic consumption. I further declare that to the best of my knowledge and belief, this merchandise is in the same quantity, quality, value, and package, unavoidable wastage and damage excepted, as it was at the time of importation; that no allowance nor reduction of duties has been made for damage or other cause except as specified in this entry; and that no part of the duties paid has been refunded by drawback or otherwise. Dated: Transferor § 190.185 Unused merchandise drawback and merchandise not conforming to sample or specification, shipped without consent of the consignee, found to be defective as of the time of importation, or returned after retail sale. (a) Procedure for filing claims. (b) Drawback entry. (c) Certification by zone operator. (d) Modification of drawback entry Indication of transfer. (2) Endorsement. Certification by Foreign Trade Zone Operator The merchandise described in this entry was received from ________ on ________, 20 ____, in Foreign Trade Zone No. ____, ____ (City and State). Exceptions: (Name of operator) By (Name and title) (3) Transferor's declaration. Transferor's Declaration I, ________ of the firm of ________, declare that the merchandise described in the within entry was duly entered at the customhouse on arrival at this port; that the duties thereon have been paid as specified in this entry; and that it was transferred to Foreign Trade Zone No. ____, located at ______ (City and State) for the sole purpose of exportation, destruction, or storage, not to be removed from the foreign trade zone for domestic consumption. I further declare that to the best of my knowledge and belief, said merchandise is the same in quantity, quality, value, and package as specified in this entry; that no allowance nor reduction in duties has been made; and that no part of the duties paid has been refunded by drawback or otherwise. Dated: Transferor § 190.186 Person entitled to claim drawback. The person named in the foreign trade zone operator's certification on the notice of transfer or the drawback entry, as applicable, will be considered to be the transferor. Drawback may be claimed by, and paid to, the transferor. Subpart S—Drawback Compliance Program § 190.191 Purpose. This subpart sets forth the requirements for the drawback compliance program in which claimants and other parties in interest, including customs brokers, may participate after being certified by CBP. Participation in the program is voluntary. Under the program, CBP is required to inform potential drawback claimants and related parties clearly about their rights and obligations under the drawback law and regulations. Reduced penalties and/or warning letters may be issued once a party has been certified for the program, and is in general compliance with the appropriate procedures and requirements thereof. § 190.192 Certification for compliance program. (a) General. (b) Core requirements of program. (1) Understands the legal requirements for filing claims, including the nature of the records that are required to be maintained and produced and the time periods involved; (2) Has in place procedures that explain the CBP requirements to those employees involved in the preparation of claims, and the maintenance and production of required records; (3) Has in place procedures regarding the preparation of claims and maintenance of required records, and the production of such records to CBP; (4) Has designated a dependable individual or individuals who will be responsible for compliance under the program, and maintenance and production of required records; (5) Has in place a record maintenance program approved by CBP regarding original records, or if approved by CBP, alternative records or recordkeeping formats for other than the original records; and (6) Has procedures for notifying CBP of variances in, or violations of, the drawback compliance program or other alternative negotiated drawback compliance program, and for taking corrective action when notified by CBP of violations and problems regarding such program. (c) Broker certification. see § 190.193 Application procedure for compliance program. (a) Who may apply. (b) Place of filing. (c) Letter of application; contents. see (1) Name of applicant, address, IRS number (with suffix), and the type of business in which engaged, as well as the name(s) of the individual(s) designated by the applicant to be responsible for compliance under the program; (2) A description of the nature of the applicant's drawback program, including the type of drawback in which involved (such as, manufacturing, or unused or rejected merchandise), and the applicant's particular role(s) in the drawback claims process (such as claimant and/or importer, manufacturer or producer, agent-manufacturer, complementary recordkeeper, subcontractor, intermediate party (possessor or purchaser), or exporter (or destroyer)); and (3) Size of applicant's drawback program. For example, if the applicant is a claimant, the number of claims filed over the previous 12-month period should be included, along with the number estimated to be filed over the next 12-month period, and the estimated amount of drawback to be claimed annually. Other parties should describe the extent to which they are involved in drawback activity, based upon their particular role(s) in the drawback process; for example, manufacturers should explain how much manufacturing they are engaged in for drawback, such as the quantity of drawback product produced on an annual basis. (d) Application package. (1) The name and title of the official in the applicant's organization who is responsible for oversight of the applicant's drawback program, and the name and title, with mailing address and, if available, fax number and email address, of the person(s) in the applicant's organization responsible for the actual maintenance of the applicant's drawback program; (2) If the applicant is a manufacturer and the drawback involved is manufacturing drawback, a copy of the letter of notification of intent to operate under a general manufacturing drawback ruling or the application for a specific manufacturing drawback ruling ( see (3) A description of the applicant's drawback recordkeeping program, including the retention period and method (for example, paper, and electronic); (4) A list of the records that will be maintained, including at least sample import documents, sample export or destruction documents, sample inventory and transportation documents (if applicable), sample laboratory or other documents establishing the qualification of merchandise or articles for substitution under the drawback law (if applicable), and sample manufacturing documents (if applicable); (5) A description of the applicant's specific procedures for: (i) How drawback claims are prepared (if the applicant is a claimant); and (ii) How the applicant will fulfill any requirements under the drawback law and regulations applicable to its role in the drawback program; (6) A description of the applicant's procedures for notifying CBP of variances in, or violations of, its drawback compliance program or negotiated alternative drawback compliance program, and procedures for taking corrective action when notified by CBP of violations or other problems in such program; and (7) A description of the applicant's procedures for annual review to ensure that its drawback compliance program meets the statutory and regulatory drawback requirements and that CBP is notified of any modifications from the procedures described in this application. § 190.194 Action on application to participate in compliance program. (a) Review by drawback office General. see (2) Criteria for CBP review. (i) The presence or absence of unresolved customs charges (duties, taxes, fees, or other debts owed CBP); (ii) The accuracy of the claimant's past drawback claims; and (iii) Whether accelerated payment of drawback or waiver of prior notice of intent to export was previously revoked or suspended. (b) Approval. (c) Benefits of participation in program. see (d) Denial. (e) Certification removal Grounds for removal. (i) The certification privilege was obtained through fraud or mistake of fact; (ii) The program participant is no longer in compliance with the customs laws and CBP regulations, including the requirements set forth in § 190.192; (iii) The program participant has repeatedly filed false drawback claims or false or misleading documentation or other information relating to such claims; or (iv) The program participant is convicted of any felony or has committed acts which would constitute a misdemeanor or felony involving theft, smuggling, or any theft-connected crime. (2) Removal procedure. (3) Effect of removal. (f) Appeal of certification denial or removal Appeal of certification denial. (2) Appeal of certification removal. § 190.195 Combined application for certification in drawback compliance program and waiver of prior notice and/or approval of accelerated payment of drawback. An applicant for certification in the drawback compliance program may also, in the same application, apply for waiver of prior notice of intent to export or destroy and accelerated payment of drawback, under subpart I of this part. Alternatively, an applicant may separately apply for certification in the drawback compliance program and either or both waiver of prior notice and accelerated payment of drawback. In the former instance, the intent to apply for certification and waiver of prior notice and/or approval of accelerated payment of drawback must be clearly stated. In all instances, all of the requirements for certification and the procedure applied for must be met (for example, in a combined application for certification in the drawback compliance program and both procedures, all of the information required for certification and each procedure, all required sample documents for certification and each procedure, and all required certifications must be included with the application). Appendix A to Part 190—General Manufacturing Drawback Rulings Table of Contents I. General Instructions II. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) (T.D. 81-234; T.D. 83-123) III. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) or 1313(b) for Agents (T.D. 81-181) IV. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) for Burlap or Other Textile Material (T.D. 83-53) V. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for Component Parts (T.D. 81-300) VI. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) for Flaxseed (T.D. 83-80) VII. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) for Fur Skins or Fur Skin Articles (T.D. 83-77) VIII. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for Orange Juice (T.D. 85-110) IX. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for Petroleum or Petroleum Derivatives (T.D. 84-49) X. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for Piece Goods (T.D. 83-73) XI. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for Raw Sugar (T.D. 83-59) XII. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for Steel (T.D. 81-74) XIII. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for Sugar (T.D. 81-92) XIV. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) for Woven Piece Goods (T.D. 83-84) I. General Instructions A. There follow various general manufacturing drawback rulings which have been designed to simplify drawback procedures. Any person that can comply with the conditions of any one of these rulings may notify a CBP drawback office of its intention to operate under the ruling ( see [email protected] [email protected] [email protected] [email protected]. Such letter of notification must include the following information: 1. Name and address of manufacturer or producer; 2. IRS (Internal Revenue Service) number (with suffix) of manufacturer or producer; 3. Location[s] of factory[ies] which will operate under the general ruling; 4. If a business entity, names of persons who will sign drawback documents ( see 5. Identity (by T.D. number and title, as stated in this Appendix) of general manufacturing drawback ruling under which the manufacturer or producer intends to operate; 6. Description of the merchandise and articles, unless specifically described in the general manufacturing drawback ruling, and 8-digit HTSUS subheading number, and the quantity of the merchandise; 7. Only for General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for Petroleum or Petroleum Derivatives, the name of each article to be exported or, if the identity of the product is not clearly evident by its name, what the product is, and the abstract period to be used for each refinery (monthly or other specified period (not to exceed 1 year)), subject to the conditions in the General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for Petroleum or Petroleum Derivatives, I. Procedures and Records Maintained, 4(a) or (b); 8. Basis of claim used for calculating drawback; and 9. Description of the manufacturing or production process, unless specifically described in the general manufacturing drawback ruling. For the General Manufacturing Drawback Ruling under § 1313(a), the General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for Component Parts, and the General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) or 1313(b) for Agents, if the drawback office has doubts as to whether there is a manufacture or production, as defined in § 190.2, the manufacturer or producer will be asked to provide details of the operation purported to be a manufacture or production. 10. For the General Manufacturing Drawback Ruling where substituted merchandise will be used, include the bill of materials, and/or formulas annotated with the 8-digit HTSUS classifications. B. These general manufacturing drawback rulings supersede general “contracts” previously published under the following Treasury Decisions (T.D.s): 81-74, 81-92, 81-181, 81-234, 81-300, 83-53, 83-59, 83-73, 83-77, 83-80, 83-84, 83-123, 84-49, and 85-110. Anyone currently operating under any of the above-listed Treasury Decisions will automatically be covered by the superseding general ruling, including all privileges of the previous “contract”. II. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) (T.D. 81-234; T.D. 83-123) A. Imported Merchandise or Drawback Products 1 1 Imported merchandise or drawback products are used in the manufacture of the exported articles upon which drawback claims will be based. B. Exported Articles on Which Drawback Will Be Claimed Exported articles on which drawback will be claimed must be manufactured in the United States using imported merchandise or drawback products. C. General Statement The manufacturer or producer manufactures or produces for its own account. The manufacturer or producer may manufacture or produce articles for the account of another or another manufacturer or producer may manufacture or produce for the account of the manufacturer or producer under contract within the principal and agency relationship outlined in T.D.s 55027(2) and 55207(1) ( see D. Process of Manufacture or Production The imported merchandise or drawback products will be used to manufacture or produce articles in accordance with § 190.2. E. Multiple Products 1. Relative Values Drawback law mandates the assignment of relative values when two or more products necessarily are produced concurrently in the same operation. If multiple products are produced records, which may include records kept in the normal course of business, will be maintained of the market value of each product at the time it is first separated in the manufacturing process. 2. Appearing-In Method The appearing-in basis may not be used if multiple products are produced. F. Loss or Gain Records, which may include records kept in the normal course of business, will be maintained showing the extent of any loss or gain in net weight or measurement of the imported merchandise, caused by atmospheric conditions, chemical reactions, or other factors. G. [Reserved] H. Stock in Process Stock in process does not result; or if it does result, details will be given in claims as filed, and it will not be included in the computation of the merchandise used to manufacture the finished articles on which drawback is claimed. I. Waste No drawback is payable on any waste which results from the manufacturing operation. Unless the claim for drawback is based on the quantity of merchandise appearing in the exported articles, records will be maintained to establish the value, quantity, and disposition of any waste that results from manufacturing the exported articles. If no waste results, records will be maintained to establish that fact. J. Procedures and Records Maintained Records, which may include records kept in the normal course of business, will be maintained to establish: 1. That the exported articles on which drawback is claimed were produced with the use of the imported merchandise, and 2. The quantity of imported merchandise 2 2 (To obtain drawback the claimant must establish that the completed articles were exported within 5 years after importation of the imported merchandise. Records establishing compliance with these requirements must be available for audit by CBP during business hours. Drawback is not payable without proof of compliance). K. Inventory Procedures The inventory records of the manufacturer or producer must show how the drawback recordkeeping requirements set forth in 19 U.S.C. 1313(a) and part 190 of the CBP Regulations will be met, as discussed under the heading Procedures and Records Maintained. If those records do not establish satisfaction of all legal requirements, drawback cannot be paid. L. Basis of Claim for Drawback Drawback will be claimed on the full quantity of merchandise used in producing the exported articles only if there is no waste or valueless or unrecovered waste in the manufacturing operation. A drawback claim may be based on the quantity of eligible merchandise that appears in the exported articles, regardless of whether there is waste, and no records of waste need be maintained. If there is valuable waste recovered from the manufacturing operation and records are kept which show the quantity and value of the waste, drawback may be claimed on the quantity of eligible material used to produce the exported articles less the amount of that merchandise which the value of the waste would replace. M. General Requirements The manufacturer or producer must: 1. Comply fully with the terms of this general ruling when claiming drawback; 2. Open its factory and records for examination at all reasonable hours by authorized Government officers; 3. Keep its drawback related records and supporting data for at least 3 years from the date of liquidation of any drawback claim predicated in whole or in part upon this general ruling; 4. Keep its letter of notification of intent to operate under this general ruling current by reporting promptly to the drawback office which liquidates its claims any changes in the information required by the General Instructions of this Appendix (I. General Instructions, 1 through 10), the corporate name, or corporate organization by succession or reincorporation; 5. Keep a copy of this general ruling on file for ready reference by employees and require all officials and employees concerned to familiarize themselves with the provisions of this general ruling; and 6. Issue instructions to insure proper compliance with title 19, United States Code, section 1313, part 190 of the CBP Regulations and this general ruling. III. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) or 1313(b) for Agents (T.D. 81-181) Manufacturers or producers operating under this general manufacturing drawback ruling must comply with T.D.s 55027(2) and 55207(1), and 19 U.S.C. 1313(b), if applicable, as well as 19 CFR part 190 ( see A. Name and Address of Principal B. Process of Manufacture or Production The imported merchandise or drawback products or other substituted merchandise will be used to manufacture or produce articles in accordance with § 190.2. C. Procedures and Records Maintained Records, which may include records kept in the normal course of business, will be maintained to establish: 1. Quantity, identity, and 8-digit HTSUS subheading number of merchandise transferred from the principal to the agent; 2. Date of transfer of the merchandise from the principal to the agent; 3. Date of manufacturing or production operations performed by the agent; 4. Total quantity and description of merchandise (including 8-digit HTSUS subheading number) appearing in or used in manufacturing or production operations performed by the agent; 5. Total quantity and description of articles (including 8-digit HTSUS subheading number) produced in manufacturing or production operations performed by the agent; 6. Quantity, identity, and 8-digit HTSUS subheading number of articles transferred from the agent to the principal; and 7. Date of transfer of the articles from the agent to the principal. D. General Requirements The manufacturer or producer will: 1. Comply fully with the terms of this general ruling when manufacturing or producing articles for account of the principal under the principal's general manufacturing drawback ruling or specific manufacturing drawback ruling, as appropriate; 2. Open its factory and records for examination at all reasonable hours by authorized Government officers; 3. Keep its drawback related records and supporting data for at least 3 years from the date of liquidation of any drawback claim predicated in whole or in part upon this general ruling; 4. Keep its letter of notification of intent to operate under this general ruling current by reporting promptly to the drawback office which liquidates the claims any changes in the information required by the General Instructions of this Appendix (I. General Instructions, 1 through 10), the corporate name, or corporate organization by succession or reincorporation; 5. Keep a copy of this general ruling on file for ready reference by employees and require all officials and employees concerned to familiarize themselves with the provisions of this general ruling; and 6. Issue instructions to help ensure proper compliance with title 19, United States Code, section 1313, part 190 of the CBP Regulations and this general ruling. IV. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) for Burlap or Other Textile Material (T.D. 83-53) Drawback may be allowed under 19 U.S.C. 1313(a) upon the exportation of bags or meat wrappers manufactured with the use of imported burlap or other textile material, subject to the following special requirements: A. Imported Merchandise or Drawback Products 1 1 Imported merchandise or drawback products (burlap or other textile material) are used in the manufacture of the exported articles upon which drawback claims will be based. B. Exported Articles on Which Drawback Will Be Claimed Exported articles on which drawback will be claimed must be manufactured in the United States using imported merchandise or drawback products. C. General Statement The manufacturer or producer manufactures or produces for its own account. The manufacturer or producer may manufacture or produce articles for the account of another, or another manufacturer or producer may manufacture or produce for the account of the manufacturer or producer under contract within the principal and agency relationship outlined in T.D.s 55027(2) and 55207(1) ( see D. Process of Manufacture or Production The imported merchandise or drawback products will be used to manufacture or produce articles in accordance with § 190.2. E. Multiple Products Not applicable. F. Loss or Gain Not applicable. G. Waste No drawback is payable on any waste which results from the manufacturing operation. Unless the claim for drawback is based on the quantity of merchandise appearing in the exported articles, records will be maintained to establish the value, quantity, and disposition of any waste that results from manufacturing the exported articles. If no waste results, records will be maintained to establish that fact. H. Procedures and Records Maintained Records, which may include records kept in the normal course of business, will be maintained to establish: 1. That the exported articles on which drawback is claimed were produced with the use of the imported merchandise; and 2. The quantity of imported merchandise 2 2 To obtain drawback, the claimant must establish that the completed articles were exported within 5 years after importation of the imported merchandise. Records establishing compliance with these requirements will be available for audit by CBP during business hours. Drawback is not payable without proof of compliance. I. Inventory Procedures The inventory records of the manufacturer or producer must show how the drawback recordkeeping requirements set forth in 19 U.S.C. 1313(a) and part 190 of the CBP Regulations will be met, as discussed under the heading “Procedures and Records Maintained”. If those records do not establish compliance with all legal requirements, drawback cannot be paid. Each lot of imported material received by a manufacturer or producer must be given a lot number and kept separate from other lots until used. The records of the manufacturer or producer must show, as to each manufacturing lot or period of manufacture, the 8-digit HTSUS classification, the quantity of material used from each imported lot, and the number of each kind and size of bags or meat wrappers obtained. All bags or meat wrappers manufactured or produced for the account of the same exporter during a specified period may be designated as one manufacturing lot. All exported bags or meat wrappers must be identified by the exporter. J. Basis of Claim for Drawback Drawback will be claimed on the quantity of merchandise used in producing the exported articles only if there is no waste or valueless or unrecovered waste in the manufacturing operation. Drawback may be claimed on the quantity of eligible merchandise that appears in the exported articles, regardless of whether there is waste, and no records of waste need be maintained. If there is valuable waste recovered from the manufacturing operation, and records are kept which establish the quantity and value of the waste, drawback may be claimed on the quantity of eligible material used to produce the exported articles, less the amount of that merchandise which the value of the waste would replace. K. General Requirements The manufacturer or producer must: 1. Comply fully with the terms of this general ruling when claiming drawback; 2. Open its factory and records for examination at all reasonable hours by authorized Government officers; 3. Keep its drawback related records and supporting data for at least 3 years from the date of liquidation of any drawback claim predicated in whole or in part upon this general ruling; 4. Keep its letter of notification of intent to operate under this general ruling current by reporting promptly to the drawback office which liquidates its claims any changes in the information required by the General Instructions of this Appendix (I. General Instructions, 1 through 10), the corporate name, or corporate organization by succession or reincorporation. 5. Keep a copy of this general ruling on file for ready reference by employees and require all officials and employees concerned to familiarize themselves with the provisions of this general ruling; and 6. Issue instructions to help ensure proper compliance with 19, United States Code, § 1313, part 190 of the CBP Regulations and this general ruling. V. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for Component Parts (T.D. 81-300) A. Same 8-Digit HTSUS Classification (Parallel Columns) Imported merchandise or drawback products 1 Duty-paid, duty-free, or domestic merchandise classifiable under the same 8-digit HTSUS subheading number as that designated which will be used in the production of the exported products. Component parts identified by individual part numbers and 8-digit HTSUS subheading number Component parts classifiable under the same 8-digit HTSUS subheading number and identified with the same individual part numbers as those in the column immediately to the left. The designated components must be manufactured in accordance with the same specifications and from the same materials, 1 B. Exported Articles on Which Drawback Will Be Claimed The exported articles will have been manufactured in the United States using components described in the Parallel Columns above. C. General Statement The manufacturer or producer manufactures or produces for its own account. The manufacturer or producer may manufacture or produce articles for the account of another or another manufacturer or producer may manufacture or produce for the account of the manufacturer or producer under contract within the principal and agency relationship outlined in T.D.s 55027(2) and 55207(1) ( see D. Process of Manufacture or Production The components described in the Parallel Columns will be used to manufacture or produce articles in accordance with § 190.2. E. Multiple Products Not applicable. F. Waste No drawback is payable on any waste which results from the manufacturing operation. Unless the claim for drawback is based on the quantity of components appearing in the exported articles, records will be maintained to establish the value (or the lack of value), quantity, and disposition of any waste that results from manufacturing the exported articles. If no waste results, records will be maintained to establish that fact. G. [Reserved] H. Procedures and Records Maintained Records, which may include records kept in the normal course of business, will be maintained to establish: 1. The identity and 8-digit HTSUS classification of the designated merchandise; 2. The quantity of merchandise classifiable under the same 8-digit HTSUS classification as the designated merchandise 2 2 3. That, within 5 years after the date of importation of the designated merchandise, the manufacturer or producer used the merchandise to produce articles. During the same 5-year period, the manufacturer or producer produced 3 3 I. Inventory Procedures The inventory records of the manufacturer or producer must show how the drawback recordkeeping requirements set forth in 19 U.S.C. 1313(b) and part 190 of the CBP Regulations will be met, as discussed under the heading “Procedures and Records Maintained”. If those records do not establish satisfaction of all legal requirements, drawback cannot be paid. J. Basis of Claim for Drawback Drawback will be claimed on the quantity of eligible components used in producing the exported articles only if there is no waste or valueless or unrecovered waste in the manufacturing operation. Drawback may be claimed on the quantity of eligible components that appear in the exported articles, regardless of whether there is waste, and no records of waste need be maintained. If there is valuable waste recovered from the manufacturing operation and records are kept which show the quantity and value of the waste, drawback may be claimed on the quantity of eligible components used to produce the exported articles less the amount of those components which the value of the waste would replace. K. General Requirements The manufacturer or producer will: 1. Comply fully with the terms of this general ruling when claiming drawback; 2. Open its factory and records for examination at all reasonable hours by authorized Government officers; 3. Keep its drawback related records and supporting data for at least 3 years from the date of liquidation of any drawback claim predicated in whole or in part upon this general ruling; 4. Keep its letter of notification of intent to operate under this general ruling current by reporting promptly to the drawback office which liquidates its claims any changes in the information required by the General Instructions of this Appendix (I. General Instructions, 1 through 10), the corporate name, or corporate organization by succession or reincorporation; 5. Keep a copy of this general ruling on file for ready reference by employees and require all officials and employees concerned to familiarize themselves with the provisions of this general ruling; and 6. Issue instructions to insure proper compliance with title 19, United States Code, section 1313, part 190 of the CBP Regulations and this general ruling. VI. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) for Flaxseed (T.D. 83-80) Drawback may be allowed under the provision of 19 U.S.C. 1313(a) upon the exportation of linseed oil, linseed oil cake, and linseed oil meal, manufactured or produced with the use of imported flaxseed, subject to the following special requirements: A. Imported Merchandise or Drawback Products 1 1 Imported merchandise or drawback products (flaxseed) are used in the manufacture of the exported articles upon which drawback claims will be based. B. Exported Articles on Which Drawback Will Be Claimed Exported articles on which drawback will be claimed must be manufactured in the United States using imported merchandise or drawback products. C. General Statement The manufacturer or producer manufactures or produces for its own account. The manufacturer or producer may manufacture or produce articles for the account of another or another manufacturer or producer may manufacture or produce for the account of the manufacturer or producer under contract within the principal and agency relationship outlined in T.D.s 55027(2) and 55207(1) ( see D. Process of Manufacture or Production The imported merchandise or drawback products will be used to manufacture or produce articles in accordance with § 190.2. E. Multiple Products Drawback law mandates the assignment of relative values when two or more products necessarily are produced concurrently in the same operation. If multiple products are produced records will be maintained of the market value of each product at the time it is first separated in the manufacturing process (when a claim covers a manufacturing period, the entire period covered by the claim is the time of separation of the products and the value per unit of product is the market value for the period ( see F. Loss or Gain Records will be maintained showing the extent of any loss or gain in net weight or measurement of the imported merchandise, caused by atmospheric conditions, chemical reactions, or other factors. G. Waste No drawback is payable on any waste which results from the manufacturing operation. Unless the claim for drawback is based on the quantity of merchandise appearing in the exported articles, records will be maintained to establish the value, quantity, and disposition of any waste that results from manufacturing the exported articles. If no waste results, records will be maintained to establish that fact. H. Procedures and Records Maintained Records, which may include records kept in the normal course of business, will be maintained to establish: 1. That the exported articles on which drawback is claimed were produced with the use of the imported merchandise; and 2. The quantity of imported merchandise 2 2 To obtain drawback the claimant must establish that the completed articles were exported within 5 years after importation of the imported merchandise. Records establishing compliance with these requirements will be available for audit by CBP during business hours. Drawback is not payable without proof of compliance. I. Inventory Procedures The inventory records of the manufacturer or producer must show how the drawback recordkeeping requirements set forth in 19 U.S.C. 1313(a) and part 190 of the CBP Regulations will be met, as discussed under the heading “Procedures and Records Maintained”. If those records do not establish satisfaction of all legal requirements, drawback cannot be paid. The inventory records of the manufacturer or producer will show: The inclusive dates of manufacture; the quantity, identity, value, and 8-digit HTSUS classification of the imported flaxseed or screenings, scalpings, chaff, or scourings used; the quantity by actual weight and value, if any, of the material removed from the foregoing by screening prior to crushing; the quantity and kind of domestic merchandise added, if any; the quantity by actual weight or gauge and value of the oil, cake, and meal obtained; and the quantity and value, if any, of the waste incurred. The quantity of imported flaxseed, screenings, scalpings, chaff, or scourings used or of material removed will not be estimated nor computed on the basis of the quantity of finished products obtained, but will be determined by actually weighing the said flaxseed, screenings, scalpings, chaff, scourings, or other material; or, at the option of the crusher, the quantities of imported materials used may be determined from CBP weights, as shown by the import entry covering such imported materials, and the Government weight certificate of analysis issued at the time of entry. The entire period covered by an abstract will be deemed the time of separation of the oil and cake covered thereby. If the records of the manufacturer or producer do not show the quantity of oil cake used in the manufacture or production of the exported oil meal, and the quantity of oil meal obtained, the net weight of the oil meal exported will be regarded as the weight of the oil cake used in the manufacture thereof. If various tanks are used for the storage of imported flaxseed, the mill records must establish the tank or tanks in which each lot or cargo is stored. If raw or processed oil manufactured or produced during different periods of manufacture is intermixed in storage, a record must be maintained showing the quantity, identity, and 8-digit HTSUS classification of oil so intermixed. The identity of the merchandise or articles in either instance must be in accordance with § 190.14. J. Basis of Claim for Drawback Drawback will be claimed on the quantity of merchandise used in producing the exported articles only if there is no waste or valueless or unrecovered waste in the manufacturing operation. Drawback may be claimed on the quantity of eligible merchandise that appears in the exported articles, regardless of whether there is waste, and no records of waste need be maintained. If there is valuable waste recovered from the manufacturing operation and records are kept which show the quantity and value of the waste, drawback may be claimed on the quantity of eligible material used to produce the exported articles, less the amount of that merchandise which the value of the waste would replace. K. General Requirements The manufacturer or producer will: 1. Comply fully with the terms of this general ruling when claiming drawback; 2. Open its factory and records for examination at all reasonable hours by authorized Government officers; 3. Keep its drawback related records and supporting data for at least 3 years from the date of liquidation of any drawback claim predicated in whole or in part upon this general ruling; 4. Keep its letter of notification of intent to operate under this general ruling current by reporting promptly to the drawback office which liquidates its claims any changes in the information required by the General Instructions of this Appendix (I. General Instructions, 1 through 10), the corporate name, or corporate organization by succession or reincorporation. 5. Keep a copy of this general ruling on file for ready reference by employees and require all officials and employees concerned to familiarize themselves with the provisions of this general ruling; and 6. Issue instructions to insure proper compliance with 19, United States Code, § 1313, part 190 of the CBP Regulations and this general ruling. VII. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) for Fur Skins or Fur Skin Articles (T.D. 83-77) Drawback may be allowed under 19 U.S.C. 1313(a) upon the exportation of dressed, redressed, dyed, redyed, bleached, blended, or striped fur skins or fur skin articles manufactured or produced by any one, or a combination, of the foregoing processes, with the use of fur skins or fur skin articles, such as plates, mats, sacs, strips, and crosses, imported in a raw, dressed, or dyed condition, subject to the following special requirements: A. Imported Merchandise or Drawback Products 1 1 Imported merchandise or drawback products (fur skins or fur skin articles) are used in the manufacture of the exported articles upon which drawback claims will be based. B. Exported Articles on Which Drawback Will Be Claimed Exported articles on which drawback will be claimed must be manufactured in the United States using imported merchandise or drawback products. C. General Statement The manufacturer or producer manufactures or produces for its own account. The manufacturer or producer may manufacture or produce articles for the account of another or another manufacturer or producer may manufacture or produce for the account of the manufacturer or producer under contract within the principal and agency relationship outlined in T.D.s 55027(2) and 55207(1) ( see D. Process of Manufacture or Production The imported merchandise or drawback products will be used to manufacture or produce articles in accordance with § 190.2. Drawback will not be allowed under this general manufacturing drawback ruling when the process performed results only in the restoration of the merchandise to its condition at the time of importation. E. Multiple Products Not applicable. F. Loss or Gain Records will be maintained showing the extent of any loss or gain in net weight or measurement of the imported merchandise, caused by atmospheric conditions, chemical reactions, or other factors. G. Waste No drawback is payable on any waste which results from the manufacturing operation. Unless the claim for drawback is based on the quantity of merchandise appearing in the exported articles, records will be maintained to establish the value, quantity, and disposition of any waste that results from manufacturing the exported articles. If no waste results, records will be maintained to establish that fact. H. Procedures and Records Maintained Records, which may include records kept in the normal course of business, will be maintained to establish: 1. That the exported articles on which drawback is claimed were produced with the use of the imported merchandise; and 2. The quantity of imported merchandise 2 2 To obtain drawback the claimant must establish that the completed articles were exported within 5 years after importation of the imported merchandise. Records establishing compliance with these requirements will be available for audit by CBP during business hours. Drawback is not payable without proof of compliance. I. Inventory Procedures The inventory records of the manufacturer or producer must show how the drawback recordkeeping requirements set forth in 19 U.S.C. 1313(a) and part 190 of the CBP Regulations will be met, as discussed under the heading “Procedures and Records Maintained”. If those records do not establish satisfaction of all legal requirements, drawback cannot be paid. The records of the manufacturer or producer must show, as to each lot of fur skins and/or fur skin articles used in the manufacture or production of articles for exportation with benefit of drawback, the lot number and date or inclusive dates of manufacture or production, the quantity, identity, description, and 8-digit HTSUS classification of the imported merchandise used, the condition in which imported, the process or processes applied thereto, the quantity, description, and 8-digit HTSUS classification of the finished articles obtained, and the quantity of imported pieces rejected, if any, or spoiled in manufacture or production. J. Basis of Claim for Drawback Drawback will be claimed on the quantity of merchandise used in producing the exported articles only if there is no waste or valueless or unrecovered waste in the manufacturing operation. Drawback may be claimed on the quantity of eligible merchandise that appears in the exported articles, regardless of whether there is waste, and no records of waste need be maintained. If there is valuable waste recovered from the manufacturing operation and records are kept which show the quantity and value of the waste, drawback may be claimed on the quantity of eligible material used to produce the exported articles, less the amount of that merchandise which the value of the waste would replace. (If rejects and/or spoilage are incurred, the quantity of imported merchandise used will be determined by deducting from the quantity of fur skins or fur skin articles put into manufacture or production the quantity of such rejects and/or spoilage.) K. General Requirements The manufacturer or producer will: 1. Comply fully with the terms of this general ruling when claiming drawback; 2. Open its factory and records for examination at all reasonable hours by authorized Government officers; 3. Keep its drawback related records and supporting data for at least 3 years from the date of liquidation of any drawback claim predicated in whole or in part upon this general ruling; 4. Keep its letter of notification of intent to operate under this general ruling current by reporting promptly to the drawback office which liquidates its claims any changes in the information required by the General Instructions of this Appendix (I. General Instructions, 1 through 10), the corporate name, or corporate organization by succession or reincorporation. 5. Keep a copy of this general ruling on file for ready reference by employees and require all officials and employees concerned to familiarize themselves with the provisions of this general ruling; and 6. Issue instructions to insure proper compliance with 19, United States Code, § 1313, part 190 of the CBP Regulations and this general ruling. VIII. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for Orange Juice (T.D. 85-110) A. Same 8-Digit HTSUS Classification (Parallel Columns) Imported merchandise or drawback products 1 Duty-paid, duty-free, or domestic merchandise, classifiable under the same 8-digit HTSUS subheading number as that designated which will be used in the production of the exported products. Concentrated orange juice for manufacturing (of not less than 55° Brix), as defined in the standard of identity of the Food and Drug Administration (21 CFR 146.53), which meets the Grade A standard of the U.S. Dept. of Agriculture (7 CFR 52.1557, Table IV) Concentrated orange juice for manufacturing as described in the left-hand parallel column. The imported merchandise designated on drawback claims must be classifiable under the same 8-digit HTSUS classification as the merchandise used in producing the exported articles on which drawback is claimed. 1 B. Exported Articles on Which Drawback Will Be Claimed 1. Orange juice from concentrate (reconstituted juice). 2. Frozen concentrated orange juice. 3. Bulk concentrated orange juice. C. General Statement The manufacturer or producer manufactures or produces for its own account. The manufacturer or producer may manufacture or produce articles for the account of another or another manufacturer or producer may manufacture or produce for the account of the manufacturer or producer under contract within the principal and agency relationship outlined in T.D.s 55027(2) and 55207(1) ( see D. Process of Manufacture or Production 1. Orange juice from concentrate (reconstituted juice). Concentrated orange juice for manufacturing is reduced to a desired 11.8° Brix by a blending process to produce orange juice from concentrate. The following optional blending processes may be used: i. The concentrate is blended with fresh orange juice (single strength juice); or ii. The concentrate is blended with essential oils, flavoring components, and water; or iii. The concentrate is blended with water and is heat treated to reduce the enzymatic activity and the number of viable microorganisms. 2. Frozen concentrated orange juice. Concentrated orange juice for manufacturing is reduced to a desired degree Brix of not less than 41.8° Brix by the following optional blending processes: i. The concentrate is blended with fresh orange juice (single strength juice); or ii. The concentrate is blended with essential oils and flavoring components and water. 3. Bulk concentrated orange juice. Concentrated orange juice for manufacturing is blended with essential oils and flavoring components which would enable another processor such as a dairy to prepare finished frozen concentrated orange juice or orange juice from concentrate by merely adding water to the (intermediate) bulk concentrated orange juice. E. Multiple Products, Waste, Loss or Gain Not applicable. F. [Reserved] G. Procedures and Records Maintained Records, which may include records kept in the normal course of business, will be maintained to establish: 1. The 8-digit HTSUS classification and identity of the designated merchandise; 2. The quantity of merchandise classifiable under the same 8-digit HTSUS classification as the designated merchandise 2 2 3. That, within 5 years after the date of importation of the designated merchandise, the manufacturer or producer used the designated merchandise to produce articles. During the same 5-year period, the manufacturer or producer produced 3 3 To obtain drawback it must be established that the completed articles were exported within 5 years after the importation of the imported merchandise. Records establishing compliance with these requirements must be available for audit by CBP during business hours. No drawback is payable without proof of compliance. H. Inventory Procedures The inventory records of the manufacturer or producer must show how the drawback recordkeeping requirements set forth in 19 U.S.C. 1313(b) and part 190 of the CBP Regulations will be met, as discussed under the heading “Procedures and Records Maintained”, and will show what components were blended with the concentrated orange juice for manufacturing. If those records do not establish satisfaction of all legal requirements drawback cannot be paid. I. Basis of Claim for Drawback The basis of claim for drawback will be the quantity of concentrated orange juice for manufacturing used in the production of the exported articles. It is understood that when fresh orange juice is used as “cutback”, it will not be included in the “pound solids” when computing the drawback due. J. General Requirements The manufacturer or producer will: 1. Comply fully with the terms of this general ruling when claiming drawback; 2. Open its factory and records for examination at all reasonable hours by authorized Government officers; 3. Keep its drawback related records and supporting data for at least 3 years from the date of liquidation of any drawback claim predicated in whole or in part upon this general ruling; 4. Keep its letter of notification of intent to operate under this general ruling current by reporting promptly to the drawback office which liquidates its claims any changes in the information required by the General Instructions of this Appendix (I. General Instructions, 1 through 10), the corporate name, or corporate organization by succession or reincorporation; 5. Keep a copy of this general ruling on file for ready reference by employees and require all officials and employees concerned to familiarize themselves with the provisions of this general ruling; and 6. Issue instructions to insure proper compliance with title 19, United States Code, section 1313, part 190 of the CBP Regulations and this general ruling. IX. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for Petroleum or Petroleum Derivatives (T.D. 84-49) A. Same 8-Digit HTSUS Classification (Parallel Columns) Imported merchandise or drawback products 1 Duty-paid, duty-free, or domestic merchandise, classifiable under the same 8-digit HTSUS subheading number as that designated which will be used in the production of the exported products. B. Exported Articles Produced From Fractionation 1 1. Motor Gasoline 2. Aviation Gasoline 3. Special Naphthas 4. Jet Fuel 5. Kerosene & Range Oils 6. Distillate Oils 7. Residual Oils 8. Lubricating Oils 9. Paraffin Wax 10. Petroleum Coke 11. Asphalt 12. Road Oil 13. Still Gas 14. Liquified Petroleum Gas 15. Petrochemical Synthetic Rubber 16. Petrochemical Plastics & Resins 17. All Other Petrochemical Products C. Exported Articles on Which Drawback Will Be Claimed See D. General Statement The manufacturer or producer manufactures or produces for its own account. The manufacturer or producer may manufacture or produce articles for the account of another or another manufacturer or producer may manufacture or produce for the account of the manufacturer or producer under contract within the principal and agency relationship outlined in T.D.s 55027(2) and 55207(1) ( see E. Process of Manufacture or Production Heated crude oil is charged to an atmospheric distillation tower where it is subjected to fractionation. The charge to the distillation tower consists of a single crude oil, or of commingled crudes which are fed to the tower simultaneously or after blending in a tank. During fractionation, components of different boiling ranges are separated. F. Multiple Products 1. Relative Values Fractionation results in 17 products. In order to insure proper distribution of drawback to each of these products, the manufacturer or producer agrees to record the relative values at the time of separation. The entire period covered by an abstract is to be treated as the time of separation. The value per unit of each product will be the average market value for the abstract period. 2. Producibility The manufacturer or producer can vary the proportionate quantity of each product. The manufacturer or producer understands that drawback is payable on exported products only to the extent that these products could have been produced from the designated merchandise. The records of the manufacturer or producer must show that all of the products exported, for which drawback will be claimed under this general manufacturing drawback ruling could, have been produced concurrently on a practical operating basis from the designated merchandise. The manufacturer or producer agrees to establish the amount to be designated by reference to the Industry Standards of Potential Production published in T.D. 66-16. 2 2 There are no valuable wastes as a result of the processing. G. Loss or Gain Because the manufacturer or producer keeps records on a volume basis rather than a weight basis, it is anticipated that the material balance will show a volume gain. For the same reason, it is possible that occasionally the material balance will show a volume loss. Fluctuations in type of crude used, together with the type of finished product desired make an estimate of an average volume gain meaningless. However, records will be kept to show the amount of loss or gain with respect to the production of export products. H. Exchange The use of any domestic merchandise acquired in exchange for imported merchandise that meets the same kind and quality specifications contained in the Parallel Columns of this general ruling shall be treated as use of the imported merchandise. I. Procedures and Records Maintained Records, which may include records kept in the normal course of business, will be maintained to establish: 1. The identity, and 8-digit HTSUS classification of the merchandise designated; 2. The quantity of merchandise classifiable under the same 8-digit HTSUS classification as the designated merchandise used to produce the exported articles. 3. That, within 5 years after importation, the manufacturer or producer used the designated merchandise to produce articles. During the same 5-year period, the manufacturer or producer produced the exported articles. 4(a). The manufacturer or producer agrees to use a 28-31 day period (monthly) abstract period for each refinery covered by this general manufacturing drawback ruling, or (b). The manufacturer or producer agrees to use an abstract period (not to exceed 1 year) for each refinery covered by this general manufacturing drawback ruling. The manufacturer or producer certifies that if it were to file abstracts covering each manufacturing period, of not less than 28 days and not more than 31 days (monthly) within the longer period, in no such monthly abstract would the quantity of designated merchandise exceed the material introduced into the manufacturing process during that monthly period. (Select (a) or (b), and state which is selected in the application, and, if (b) is selected, specify the length of the particular abstract period chosen (not to exceed 1 year ( see 5. On each abstract of production the manufacturer or producer agrees to show the value per barrel to five decimal places. 6. The manufacturer or producer agrees to file claims in the format set forth in exhibits A through F which are attached to this general manufacturing drawback ruling. The manufacturer or producer realizes that to obtain drawback the claimant must establish that the completed articles were exported within 5 years after importation of the imported merchandise. Records establishing compliance with these requirements will be available for audit by CBP during business hours. It is understood that drawback is not payable without proof of compliance. Records will be kept in accordance with T.D. 84-49, as amended by T.D. 95-61. J. Residual Rights It is understood that the refiner can reserve as the basis for future payment the right to drawback only on the number of barrels of raw material computed by subtracting from Line E the larger of Lines A or B, of a given Exhibit E. It is further understood that this right to future payment can be claimed only against products concurrently producible with the products listed in Column 21, in the quantities shown in Column 22 of such Exhibit E. Such residual right can be transferred to another refinery of the same refiner only when Line B of Exhibit E is larger than Line A. Unless the number of residual barrels is specifically computed, and rights thereto are expressly reserved on Exhibit E, such residual rights will be deemed waived. The procedure the manufacturer or producer must follow in preparing drawback entries claiming this residual right is illustrated in the attached sample Exhibit E-1. It is understood that claims involving residual rights must be filed only at the port where the Exhibit E reserving such right was filed. K. Inventory Procedures The manufacturer or producer realizes that inventory control is of major importance. In accordance with the normal accounting procedures of the manufacturer or producer, each refinery prepares a monthly stock and yield report, which accounts for inventories, production, and disposals, from time of receipt to time of disposition. This provides an audit trail of all products. The above-noted records will provide the required audit trail from the initial source documents to the drawback claims of the manufacturer or producer and will support adherence with the requirements discussed under the heading Procedures and Records Maintained. L. Basis of Claim for Drawback The amount of raw material on which drawback may be based will be computed by multiplying the quantity of each product exported by the drawback factor for that product. The amount of raw material which may be designated as the basis for drawback on the exported products produced at a given refinery and covered by a drawback entry must not exceed the quantity of such raw material used at the refinery during the abstract period or periods from which the exported products were produced. The quantity of raw material to be designated as the basis for drawback on exported products must be at least as great as the quantity of raw material which would be required to produce the exported products in the quantities exported. M. Agreements The manufacturer or producer specifically agrees that it will: 1. Comply fully with the terms of this general ruling when claiming drawback; 2. Open its refinery and records for examination at all reasonable hours by authorized Government officers; 3. Keep its drawback related records and supporting data for at least 3 years from the date of liquidation of any drawback claim predicated in whole or in part upon this application; 4. Keep this application current by reporting promptly to the drawback office which liquidates its claims any changes in the information required by the General Instructions of this Appendix (I. General Instructions, 1 through 10), the corporate name, or corporate organization by succession or reincorporation; 5. Keep a copy of this general ruling on file for ready reference by employees and require all officials and employees concerned to familiarize themselves with the provisions of this general ruling; and 6. Issue instructions to insure proper compliance with title 19, United States Code, section 1313, part 190 of the CBP Regulations and this general ruling. Exhibit C—Inventory Control Sheet: ABC Oil Co., Inc.; Beaumont, Texas Refinery, Period From January 1, 2019 to January 31, 2019 [All quantities exclude non-petroleum additives] Aviation gasoline Residual oils Lubricating oils Petrochemicals, all other Bbls. Drawback Bbls. Drawback Bbls. Drawback Bbls. Drawback (10) Opening Inventory 11,218 1.00126 21,221 .45962 9,242 4.52178 891 1.00244 (11) Production 108,269 1.01300 308,002 .43642 292,492 4.64041 7,996 1.07895 (11-A) Receipts (12) Exports 11,218 1.00126 21,221 .45962 8,774 4.52178 195 1.00244 (13) Drawback Deliveries 696 1.00244 (14) Domestic Shipments 97,863 1.01300 180,957 .43642 468 4.52178 6,867 1.07895 (15) Closing Inventory 10,230 1.01300 22,648 .43642 14,206 4.64041 810 1.07895 Line (10)—Opening inventory from previous period's closing inventory. Line (11)—From production period under consideration. Line (11-A)—Product received from other sources. Line (12)—From earliest on hand (inventory or production). Totals from drawback entry or entries recapitulated ( see Line (13)—Deliveries for export or for designation against further manufacture—earliest on hand after exports are deducted. Line (14)—From earliest on hand after lines (12) and (13) are deducted. Line (15)—Balance on hand. Exhibit E (Combination)—Producibility Test for Products Exported (Including Drawback Deliveries) ABC Oil Co., Inc.; Beaumont, Texas Refinery, Period from January 1, 2019 to January 31, 2019 [Type and class of raw material designated—Crude, Class III] Product Quantity in barrels Industry Quantity of raw Drawback Crude allowed (21) (22) (23) (24) (19) (20) Aviation Gasoline 1 1 1 40 28,045 1.00126 11,232 Residual Oils 1 1 1 83 25,567 .45962 9,754 Lubricating Oils 1 1 50 17,548 4.52178 39,674 Petrochemicals, Other 1 1 29 672 1.00244 195 Petrochemicals, Other 2 2 29 2,400 1.00244 698 Petrochemicals, Other 2 2 319 29 1,100 1.07895 344 Total 146,996 107,636 1 2 A—Crude allowed (column 20: 107,636 bbls. (106,594 for export, plus 1,042 for drawback deliveries)). B—Total quantity exported (including drawback deliveries) (column 22): 146,996. C—Largest quantity of raw material needed to produce an individual exported product ( see D—The excess of raw material over the largest of lines A, B, or C, required to produce concurrently on a practical operating basis, using the most efficient processing equipment existing within the domestic industry, the exported articles (including drawback deliveries) in the quantities exported (or delivered): None. E—Minimum quantity of raw material required to be designated (which is A, B, or C, whichever is largest, plus D, if applicable): 151,347 bbs. I hereby certify that all the above drawback deliveries and products exported by the Beaumont refinery of ABC Oil Co., Inc. during the period from January 1, 2019 to January 31, 2019, could have been produced concurrently on a practical operating basis from 151,347 barrels of imported Class III crude against which drawback is claimed. Exhibit F—Designations for Drawback Claim, ABC Oil Co., Inc.; Beaumont, Texas Refinery [Period from January 1, 2019 to January 31, 2019] Entry No. Date of Kind of materials Quantity of materials in barrels Date received Date consumed Rate of duty 26192 04/13/17 Class III Crude 75,125 04/13/17 May 2017 $.1050 23990 08/04/18 ......do 37,240 08/04/18 Oct. 2018 .1050 22517 10/05/18 ......do 38,982 10/05/18 Nov. 2018 .1050 X. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for Piece Goods (T.D. 83-73) A. Same 8-Digit HTSUS Classification (Parallel Columns) Imported merchandise or drawback products 1 Duty-paid, duty-free or domestic merchandise classifiable under the same 8-digit HTSUS subheading number as that designated which will be used in the production of the exported products. Piece goods. Piece goods. The piece goods used in manufacture will be classifiable under the same 8-digit HTSUS classification as the piece goods designated as the basis of claim for drawback, and are used interchangeably without change in manufacturing processes or resultant products (including, if applicable, multiple products), or wastes. Some tolerances between imported-designated piece goods and the used-exported piece goods will be permitted to accommodate variations which are normally found in piece goods. These tolerances are no greater than the tolerances generally allowed in the industry for piece goods classifiable under the same 8-digit HTSUS classification as follows: 1 1. A 4% weight tolerance so that the piece goods used in manufacture will be not more than 4% lighter or heavier than the imported piece goods which will be designated; 2. A tolerance of 4% in the aggregate thread count per square inch so that the piece goods used in manufacture will have an aggregate thread count within 4%, more or less of the aggregate thread count of the imported piece goods which will be designated. In each case, the average yarn number of the domestic piece goods will be the same or greater than the average yarn number of the imported piece goods designated, and in each case, the substitution and tolerance will be employed only within the same family of fabrics, i.e., B. Exported Articles on Which Drawback Will Be Claimed Finished piece goods. C. General Statement The manufacturer or producer manufactures or produces for its own account. The manufacturer or producer may manufacture or produce articles for the account of another or another manufacturer or producer may manufacture or produce for the account of the manufacturer or producer under contract within the principal and agency relationship outlined in T.D.s. 55027(2) and 55207(1) ( see D. Process of Manufacture or Production Piece goods are subject to any one of the following finishing productions: 1. Bleaching, 2. Mercerizing, 3. Dyeing, 4. Printing, 5. A combination of the above, or 6. Any additional finishing processes. E. Multiple Products Not applicable. F. Waste Rag waste may be incurred. No drawback is payable on any waste which results from the manufacturing operation. Unless the claim for drawback is based on the quantity of merchandise appearing in the exported articles, the records of the manufacturer or producer must show the quantity of rag waste, if any, and its value. In instances where rag waste occurs and it is impractical to account for the actual quantity of rag waste incurred, it may be assumed that such rag waste constituted 2% of the piece goods put into the finishing processes. If necessary to establish the quantity of merchandise (eligible piece goods) appearing in the exported articles, such waste records must also be kept. G. Shrinkage, Gain, and Spoilage Unless the claim for drawback is based on the quantity of merchandise appearing in the exported articles, the records of the manufacturer or producer must show the yardage lost by shrinkage or gained by stretching during manufacture or production, and the quantity of remnants resulting and of spoilage incurred, if any. If necessary to establish the quantity of merchandise (eligible piece goods) appearing in the exported articles, such records for shrinkage, gain and spoilage will also be kept. H. [Reserved] I. Procedures and Records Maintained Records, which may include records kept in the normal course of business, will be maintained to establish: 1. The identity and 8-digit HTSUS classification of the designated merchandise; 2. The quantity of merchandise classifiable under the same 8-digit HTSUS classification as the designated merchandise 2 2 3. That, within 5 years after the date of importation of the designated merchandise, the manufacturer or producer used the merchandise to produce articles. During the same 5-year period, the manufacturer or producer produced 3 3 To obtain drawback the claimant must establish that the completed articles were exported within 5 years after the importation of the imported merchandise. Records establishing compliance with these requirements will be available for audit by CBP during business hours. Drawback is not payable without proof of compliance. J. Inventory Procedures The inventory records of the manufacturer or producer must show how the drawback recordkeeping requirements set forth in 19 U.S.C. 1313(b) and part 190 of the CBP Regulations will be met, as discussed under the heading “Procedures and Records Maintained”. If those records do not establish satisfaction of all legal requirements, drawback cannot be paid. K. Basis of Claim for Drawback Drawback will be claimed on the quantity of eligible piece goods used in producing the exported articles only if there is no waste or valueless or unrecovered waste in the manufacturing operation. Drawback may be claimed on the quantity of eligible piece goods that appears in the exported articles, regardless of whether there is waste, and no records of waste need be maintained. If there is valuable waste recovered from the manufacturing operation and records are kept which show the quantity and value of the waste from each lot of piece goods, drawback may be claimed on the quantity of eligible piece goods used to produce the exported articles less the amount of piece goods which the value of the waste would replace. L. General Requirements The manufacturer or producer will: 1. Comply fully with the terms of this general ruling when claiming drawback; 2. Open its factory and records for examination at all reasonable hours by authorized Government officers; 3. Keep its drawback related records and supporting data for at least 3 years from the date of liquidation of any drawback claim predicated in whole or in part upon this general ruling; 4. Keep its letter of notification of intent to operate under this general ruling current by reporting promptly to the drawback office which liquidates its claims any changes in the information required by the General Instructions of this Appendix (I. General Instructions, 1 through 10), the corporate name, or corporate organization by succession or reincorporation; 5. Keep a copy of this general ruling on file for ready reference by employees and require all officials and employees concerned to familiarize themselves with the provisions of this general ruling; and 6. Issue instructions to insure proper compliance with title 19, United States Code, section 1313, part 190 of the CBP Regulations and this general ruling. XI. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for Raw Sugar (T.D. 83-59) Drawback may be allowed under 19 U.S.C. 1313(b) upon the exportation of hard or soft refined sugars and sirups manufactured from raw sugar, subject to the following special requirements: A. The drawback allowance must not exceed an amount calculated pursuant to regulations prescribed by the Secretary of the Treasury, of the duties, taxes, and fees paid on a quantity of raw sugar designated by the refiner which contains a quantity of sucrose not in excess of the quantity required to manufacture the exported sugar or sirup, ascertained as provided in this general rule. B. The refined sugars and sirups must have been manufactured with the use of duty-paid, duty-free, or domestic sugar, or combinations thereof, within 5 years after the date of importation, and must have been exported within 5 years from the date of importation of the designated sugar. C. All granulated sugar testing by the polariscope 99.5 [degrees] and over will be deemed hard refined sugar. All refined sugar testing by the polariscope less than 99.5 [degrees] will be deemed soft refined sugar. All “blackstrap,” “unfiltered sirup,” and “final molasses” will be deemed sirup. D. The imported duty-paid sugar selected by the refiner as the basis for the drawback claim (designated sugar) must be classifiable under the same 8-digit HTSUS classification as that used in the manufacture of the exported refined sugar or sirup and must have been used within 5 years after the date of importation. Duty-paid sugar which has been used at a plant of a refiner within 5 years after the date on which it was imported by such refiner may be designated as the basis for the allowance of drawback on refined sugars or sirups manufactured at another plant of the same refiner. E. For the purpose of distributing the drawback, relative values must be established between hard refined (granulated) sugar, soft refined (various grades) sugar, and sirups at the time of separation. The entire period covered by an abstract will be deemed the time of separation of the sugars and sirups covered by such abstract. F. The sucrose allowance per pound on hard refined (granulated) sugar established by an abstract, as provided for in this general ruling, will be applied to hard refined sugar commercially known as loaf, cut loaf, cube, pressed, crushed, or powdered sugar manufactured from the granulated sugar covered by the abstract. G. The sucrose allowance per gallon on sirup established by an abstract, as provided for in this general ruling, will be applied to sirup further advanced in value by filtration or otherwise, unless such sirup is the subject of a special manufacturing drawback ruling. H. As to each lot of imported or domestic sugar used in the manufacture of refined sugar or sirup on which drawback is to be claimed, the raw stock records must show the refiner's raw lot number, the number and character of the packages, the settlement weight in pounds, the settlement polarization, and the 8-digit HTSUS classification. Such records covering imported sugar must show, in addition to the foregoing, the import entry number, date of importation, name of importing carrier, country of origin, the Government weight, and the Government polarization. I. The melt records must show the date of melting, the number of pounds of each lot of raw sugar melted, and the full analysis at melting. J. There must be kept a daily record of final products boiled showing the date of the melt, the date of boiling, the magma filling serial number, the number of the vacuum pan or crystallizer filling, the date worked off, and the sirup filling serial number. K. The sirup manufacture records must show the date of boiling, the period of the melt, the sirup filling serial number, the number of barrels in the filling, the magma filling serial number, the quantity of sirup, its disposition in tanks or barrels and the refinery serial manufacture number. L. The refined sugar stock records must show the refinery serial manufacture number, the period of the melt, the date of manufacture, the grade of sugar produced, its polarization, the number and kind of packages, and the net weight. When soft sugars are manufactured, the commercial grade number and quantity of each must be shown. M. Each lot of hard or soft refined sugar and each lot of sirup manufactured, regardless of the character of the containers or vessels in which it is packed or stored, must be marked immediately with the date of manufacture and the refinery manufacture number applied to it in the refinery records provided for and shown in the abstract, as provided for in this general ruling, from such records. If all the sugar or sirup contained in any lot manufactured is not intended for exportation, only such of the packages as are intended for exportation need be marked as prescribed above, provided there is filed with the drawback office immediately after such marking a statement showing the date of manufacture, the refinery manufacture number, the number of packages marked, and the quantity of sugar or sirup contained therein. No drawback will be allowed in such case on any sugar or sirup in excess of the quantity shown on the statement as having been marked. If any packages of sugar or sirup so marked are repacked into other containers, the new containers must be marked with the marks which appeared on the original containers and a revised statement covering such repacking and remarking must be filed with the drawback office. If sirups from more than one lot are stored in the same tank, the refinery records must show the refinery manufacture number and the quantity of sirup from each lot contained in such tank. N. An abstract from the foregoing records covering manufacturing periods of not less than 1 month nor more than 3 months, unless a different period will have been authorized, must be filed when drawback is to be claimed on any part of the refined sugar or sirup manufactured during such period. Such abstract must be filed by each refiner with the drawback office where drawback claims are filed on the basis of this general ruling. Such abstract must consist of: (1) A raw stock record (accounting for Refiner's raw lot No., Import entry No., Packages No. and kind, Pounds, Polarization, By whom imported or withdrawn, Date of importation, Date of receipt by refiner, Date of melt, Importing carrier, Country of origin); (2) A melt record [number of pounds in each lot melted] (accounting for Lot No. Pounds, and Polarization degrees and pounds sucrose); (3) Sirup stock records (accounting for Date of boiling, Refinery serial manufacture No., Quantity of sirup in gallons, and Pounds sucrose contained therein); (4) Refined sugar stock record (accounting for Refinery serial production No., Date of manufacture, Hard or soft refined, Polarization and No., Net weight in pounds); (5) Recapitulation (consisting of (in pounds): (a) Sucrose in process at beginning of period, (b) sucrose melted during period, (c) sucrose in process at end of period, (d) sucrose used in manufacture, and (e) sucrose contained in manufacture, in which item (a) plus item (b), minus item (c), should equal item (d)); and (6) A statement as follows: I, ________, the ________ refiner at the ________ refinery of ________, located at ________, do solemnly and truly declare that each of the statements contained in the foregoing abstract is true to the best of my knowledge and belief and can be verified by the refinery records, which have been kept in accordance with Treasury Decision 83-59 and Appendix A of 19 CFR part 190 and which are at all times open to the inspection of CBP. Date Signature O. The refiner must file with each abstract a statement, showing the average market values of the products specified in the abstract and including a statement as follows: I, ________, (Official capacity) of the ________ (Refinery), do solemnly and truly declare that the values shown above are true to the best of my knowledge and belief, and can be verified by our records. Date Signature P. At the end of each calendar month the refiner must furnish to the drawback office a statement showing the actual sales of sirup and the average market values of refined sugars for the calendar month. Q. The sucrose allowance to be applied to the various products based on the abstract and statement provided for in this general ruling will be in accordance with the example set forth in Treasury Decision 83-59. R. [Reserved] S. Drawback entries under this general ruling must state the polarization in degrees and the sucrose in pounds for the designated imported sugar. Drawback claims under this general ruling must include a statement as follows: I, ________, the ________ of ________, located at ________ declare that the sugar (or sirup) described in this entry, was manufactured by said company at its refinery at ________ and is part of the sugar (or sirup) covered by abstract No. ____, filed at the port of ________; that, subject to 19 U.S.C. 1508 and 1313(t), the refinery and other records of the company verifying the statements contained in said abstract are now and at all times hereafter will be open to inspection by CBP. I further declare that the above-designated imported sugar (upon which the duties have been paid) was received by said company on ________ and was used in the manufacture of sugar and sirup during the period covered by abstract No. ____, CBP No. ____, on file with the port director at ________. I further declare that the sugar or sirup specified therein was exported as stated in the entry. Date Signature T. General Statement. The refiner manufactures or produces for its own account. The refiner may manufacture or produce articles for the account of another or another manufacturer or producer may manufacture or produce for the refiner's account under contract within the principal and agency relationship outlined in T.D.s 55027(2) and 55207(1) ( see U. Waste. No drawback is payable on any waste which results from the manufacturing operation. Unless drawback claims are based on the “appearing in” method, records will be maintained to establish the value (or the lack of value), quantity, and disposition of any waste that results from manufacturing the exported articles. If no waste results, records to establish that fact will be maintained. V. Loss or Gain. The refiner will maintain records showing the extent of any loss or gain in net weight or measurement of the sugar caused by atmospheric conditions, chemical reactions, or other factors. W. [Reserved] X. Procedures and Records Maintained. Records, which may include records kept in the normal course of business, will be maintained to establish: 1. The identity and 8-digit HTSUS classification of the designated merchandise; 2. The quantity of merchandise classifiable under the same 8-digit HTSUS classification as the designated merchandise 1 1 3. That, within 5 years of the date of importation of the designated merchandise, the refiner used the designated merchandise to produce articles. During the same 5-year period, the refiner produced 2 2 To obtain drawback the claimant must establish that the completed articles were exported within 5 years after the importation of the imported merchandise. Records establishing compliance with these requirements will be available for audit by CBP during business hours. Drawback is not payable without proof of compliance. Y. General requirements. The refiner will: 1. Comply fully with the terms of this general ruling when claiming drawback; 2. Open its factory and records for examination at all reasonable hours by authorized Government officers; 3. Keep its drawback related records and supporting data for at least 3 years from the date of liquidation of any drawback claim predicated in whole or in part upon this general ruling; 4. Keep its letter of notification of intent to operate under this general ruling current by reporting promptly to the drawback office which liquidates its claims any changes in the information required by the General Instructions of this Appendix (I. General Instructions, 1 through 10), the corporate name, or corporate organization by succession or reincorporation; 5. Keep a copy of this general ruling on file for ready reference by employees and require all officials and employees concerned to familiarize themselves with the provisions of this general ruling; and 6. Issue instructions to insure proper compliance with title 19, United States Code, section 1313, part 190 of the CBP Regulations and this general ruling. XII. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for Steel (T.D. 81-74) A. Same 8-Digit HTSUS Classification (Parallel Columns) Imported merchandise or drawback products 1 Duty-paid, duty-free or domestic merchandise classifiable under the same 8-digit HTSUS subheading number as that designated which will be used in the production of the exported products. Steel of one general class, e.g., an ingot, falling within on SAE, AISI, or ASTM 2 Steel of the same general class, specification, and grade as the steel in the column immediately to the left hereof. 1. The duty-paid, duty-free, or domestic steel used instead of the imported, duty-paid steel (or drawback products) will be interchangeable for manufacturing purposes with the duty-paid steel. To be interchangeable a steel must be able to be used in place of the substituted steel without any additional processing step in the manufacture of the article on which drawback is to be claimed. 1 2 2. Because the duty-paid steel (or drawback products) that is to be designated as the basis for drawback is dutiable according to its value, the amount of duty can vary with its size (gauge, width, or length) or composition (e.g., chrome content). If such variances occur, designation will be by “price extra,” and in no case will drawback be claimed in a greater amount than that which would have accrued to that steel used in manufacture of or appearing in the exported articles. Price extra is not available for coated or plated steel, covered in paragraph 4, infra, insofar as the coating or plating is concerned. 3. If the steel is coated or plated with a base metal, in addition to meeting the requirements for uncoated or unplated steel set forth in the Parallel Columns, the base-metal coating or plating on the duty-paid, duty-free, or domestic steel used in place of the duty-paid steel (or drawback products) will have the same composition and thickness as the coating or plating on the duty-paid steel. If the coated or plated duty-paid steel is within an SAE, AISI, ASTM specification, then any duty-paid, duty-free, or domestic coated or plated steel must be covered by the same specification and grade (if two or more grades are in the specification). B. Exported Articles on Which Drawback Will Be Claimed The exported articles will have been manufactured in the United States using steels described in the Parallel Columns above. C. General Statement The manufacturer or producer manufactures or produces for its own account. The manufacturer or producer may manufacture or produce articles for the account of another or another manufacturer or producer may manufacture or produce for the account of the manufacturer or producer under contract within the principal and agency relationship outlined in T.D.s 55027(2) and 55207(1) ( see D. Process of Manufacture or Production The steel described in the Parallel Columns will be used to manufacture or produce articles in accordance with § 190.2. E. Multiple Products Not applicable. F. Waste No drawback is payable on any waste which results from the manufacturing operation. Unless the claim for drawback is based on the quantity of steel appearing in the exported articles, records will be maintained to establish the value (or the lack of value), quantity, and disposition of any waste that results from manufacturing the exported articles. If no waste results, records to establish that fact will be maintained. G. Loss or Gain The manufacturer or producer will maintain records showing the extent of any loss or gain in net weight or measurement of the steel caused by atmospheric conditions, chemical reactions, or other factors. H. [Reserved] I. Procedures and Records Maintained Records, which may include records kept in the normal course of business, will be maintained to establish: 1. The identity and 8-digit HTSUS classification of the designated merchandise; 2. The quantity of merchandise of the designated merchandise 3 3 3. That, within 5 years of the date of importation of the designated merchandise, the manufacturer or producer used the merchandise to produce articles. During the same 5-year period, the manufacturer or producer produced 4 4 To obtain drawback the claimant must establish that the completed articles were exported within 5 years after the importation of the imported merchandise. Records establishing compliance with these requirements will be available for audit by CBP during business hours. Drawback is not payable without proof of compliance. J. Inventory Procedures The inventory records of the manufacturer or producer must show how the drawback recordkeeping requirements set forth in 19 U.S.C. 1313(b) and part 190 of the CBP Regulations will be met, as discussed under the heading “Procedures and Records Maintained.” If those records do not establish satisfaction of all legal requirements, drawback cannot be paid. K. Basis of Claim for Drawback Drawback will be claimed on the quantity of steel used in producing the exported articles only if there is no waste or valueless or unrecovered waste in the manufacturing operation. Drawback may be claimed on the quantity of eligible steel that appears in the exported articles, regardless of whether there is waste, and no records of waste need be maintained. If there is valuable waste recovered from the manufacturing operation and records are kept which show the quantity and value of the waste from each lot of steel, drawback may be claimed on the quantity of eligible steel used to produce the exported articles less the amount of that steel which the value of the waste would replace. L. General Requirements The manufacturer or producer will: 1. Comply fully with the terms of this general ruling when claiming drawback; 2. Open its factory and records for examination at all reasonable hours by authorized Government officers; 3. Keep its drawback related records and supporting data for at least 3 years from the date of liquidation of any drawback claim predicated in whole or in part upon this general ruling; 4. Keep its letter of notification to operate under this general ruling current by reporting promptly to the drawback office which liquidates its claims any changes in the information required by the General Instructions of this Appendix (I. General Instructions, 1 through 10), the corporate name, or corporate organization by succession or reincorporation; 5. Keep a copy of this general ruling on file for ready reference by employees and require all officials and employees concerned to familiarize themselves with the provisions of this general ruling; and 6. Issue instructions to insure proper compliance with title 19, United States Code, section 1313, part 190 of the CBP Regulations and this general ruling. XIII. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for Sugar (T.D. 81-92) A. Same 8-Digit HTSUS Classification (Parallel Columns) Imported merchandise or drawback products 1 Duty-paid, duty-free or domestic merchandise classifiable under the same 8-digit HTSUS subheading number as that designated which will be used in the production of the exported products. 1. Granulated or liquid sugar for manufacturing, containing sugar solids of not less than 99.5 sugar degrees. 1. Granulated or liquid sugar for manufacturing, containing sugar solids of less than 99.5 sugar degrees. 2. Granulated or liquid sugar for manufacturing, containing sugar solids of not less than 99.5 sugar degrees. 2. Granulated or liquid sugar for manufacturing, containing sugar solids of less than 99.5 sugar degrees. The sugars listed 1 B. Exported Articles on Which Drawback Will Be Claimed Edible substances (including confectionery) and/or beverages and/or ingredients therefor. C. General Statement The manufacturer or producer manufactures or produces for its own account. The manufacturer or producer may manufacture or produce articles for the account of another or another manufacturer or producer may manufacture or produce for the account of the manufacturer or producer under contract within the principal and agency relationship outlined in T.D.s 55027(2) and 55207(1) ( see D. Process of Manufacture or Production The sugars are subjected to one or more of the following operations to form the desired product(s): 1. Mixing with other substances, 2. Cooking with other substances, 3. Boiling with other substances, 4. Baking with other substances, 5. Additional similar processes. E. Multiple Products Not applicable. F. Waste No drawback is payable on any waste which results from the manufacturing operation. Unless the claim for drawback is based on the quantity of sugar appearing in the exported articles, records will be maintained to establish the value (or the lack of value), quantity, disposition of any waste that results from manufacturing the exported articles. If no waste results, records to establish that fact will be maintained. G. Loss or Gain The manufacturer or producer will maintain records showing the extent of any loss or gain in net weight or measurement of the sugar caused by atmospheric conditions, chemical reactions, or other factors. H. [Reserved] I. Procedures and Records Maintained Records, which may include records kept in the normal course of business, will be maintained to establish: 1. The identity and 8-digit HTSUS classification of the designated merchandise; 2. The quantity of merchandise classifiable under the same 8-digit HTSUS classification as the designated merchandise 2 2 3. That, within 5 years of the date of importation of the designated merchandise, the manufacturer or producer used the merchandise to produce articles. During the same 5-year period, the manufacturer or producer produced 3 3 To obtain drawback the claimant must establish that the completed articles were exported within 5 years after the importation of the imported merchandise. Records establishing compliance with these requirements will be available for audit by CBP during business hours. Drawback is not payable without proof of compliance. J. Inventory Procedures The inventory records of the manufacturer or producer, will show how the drawback recordkeeping requirements set forth in 19 U.S.C. 1313(b) and part 190 of the CBP Regulations will be met, as discussed under the heading “Procedures and Records Maintained.” If those records do not establish satisfaction of all legal requirements, drawback cannot be paid. K. Basis of Claim for Drawback Drawback will be claimed on the quantity of sugar used in producing the exported articles only if there is no waste or valueless or unrecovered waste in the manufacturing operation. Drawback may be claimed on the quantity of eligible sugar that appears in the exported articles regardless of whether there is waste, and no records of waste need be maintained. If there is valuable waste recovered from the manufacturing operation and records are kept which show the quantity and value of the waste, drawback may be claimed on the quantity of eligible material used to produce the exported articles less the amount of that sugar which the value of the waste would replace. L. General Requirements The manufacturer or producer will: 1. Comply fully with the terms of this general ruling when claiming drawback; 2. Open its factory and records for examination at all reasonable hours by authorized Government officers; 3. Keep its drawback related records and supporting data for at least 3 years from the date of liquidation of any drawback claim predicated in whole or in part upon this general ruling; 4. Keep its letter of notification of intent to operate under this general ruling current by reporting promptly to the drawback office which liquidates its claims any changes in the information required by the General Instructions of this Appendix (I. General Instructions, 1 through 10), the corporate name, or corporate organization by succession or reincorporation; 5. Keep a copy of this general ruling on file for ready reference by employees and require all officials and employees concerned to familiarize themselves with the provisions of this general ruling; and 6. Issue instructions to insure proper compliance with title 19, United States Code, section 1313, part 190 of the CBP Regulations and this general ruling. XIV. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) for Woven Piece Goods (T.D. 83-84) Drawback may be allowed under 19 U.S.C. 1313(a) upon the exportation of bleached, mercerized, printed, dyed, or redyed piece goods manufactured or produced by any one or a combination of the foregoing processes with the use of imported woven piece goods, subject to the following special requirements: A. Imported Merchandise or Drawback Products 1 1 Imported merchandise or drawback products (woven piece goods) are used in the manufacture of the exported articles upon which drawback claims will be based. B. Exported Articles on Which Drawback Will Be Claimed Exported articles on which drawback will be claimed must be manufactured in the United States using imported merchandise or drawback products. C. General Statement The manufacturer or producer manufactures or produces for its own account. The manufacturer or producer may manufacture or produce articles for the account of another or another manufacturer or producer may manufacture or produce for the account of the manufacturer or producer under contract within the principal and agency relationship outlined in T.D.s 55027(2) and 55207(1) ( see D. Process of Manufacture or Production The imported merchandise or drawback products will be used to manufacture or produce articles in accordance with § 190.2. The piece goods used in manufacture or production under this general manufacturing drawback ruling may also be subjected to one or more finishing processes. Drawback will not be allowed under this general manufacturing drawback ruling when the process performed results only in the restoration of the merchandise to its condition at the time of importation. E. Multiple Products Not applicable. F. Waste Rag waste may be incurred. No drawback is payable on any waste which results from the manufacturing operation. Unless the claim for drawback is based on the quantity of merchandise appearing in the exported articles, the records of the manufacturer or producer must show the quantity of rag waste, if any, its value, and its disposition. If no waste results, records will be maintained to establish that fact. In instances where rag waste occurs and it is impractical to account for the actual quantity of rag waste incurred, it may be assumed that such rag waste constituted 2% of the woven piece goods put into process. If necessary to establish the quantity of merchandise (eligible piece goods) appearing in the exported articles, such waste records will also be kept. G. Shrinkage, Gain, and Spoilage Unless the claim for drawback is based on the quantity of merchandise appearing in the exported articles, the records of the manufacturer or producer must show the yardage lost by shrinkage or gained by stretching during manufacture, and the quantity of remnants resulting and of spoilage incurred, if any. If necessary to establish the quantity of merchandise (eligible piece goods) appearing in the exported articles, such records for shrinkage, gain, and spoilage will also be kept. H. Procedures and Records Maintained Records, which may include records kept in the normal course of business, will be maintained to establish: 1. That the exported articles on which drawback is claimed were produced with the use of the imported merchandise; and 2. The quantity of imported merchandise 2 2 To obtain drawback the claimant must establish that the completed articles were exported within 5 years after importation of the imported merchandise. Records establishing compliance with these requirements will be available for audit by CBP during business hours. Drawback is not payable without proof of compliance. I. Inventory Procedures The inventory records of the manufacturer or producer must show how the drawback recordkeeping requirements set forth in 19 U.S.C. 1313(a) and part 190 of the CBP Regulations will be met, as discussed under the heading “Procedures and Records Maintained”. If those records do not establish satisfaction of all legal requirements, drawback cannot be paid. The records of the manufacturer or producer must show, as to each lot of piece goods manufactured or produced for exportation with benefit of drawback, the lot number and the date or inclusive dates of manufacture or production, the quantity, identity, value, and 8-digit HTSUS classification of the imported (or drawback product) piece goods used, the condition in which imported or received (whether in the gray, bleached, dyed, or mercerized), the working allowance specified in the contract under which they are received, the process or processes applied thereto, and the quantity and description of the piece goods obtained. The records must also show the yardage lost by shrinkage or gained by stretching during manufacture or production, and the quantity of remnants resulting and of spoilage incurred. J. Basis of Claim for Drawback Drawback will be claimed on the quantity of merchandise used in producing the exported articles only if there is no waste or valueless or unrecovered waste in the manufacturing operation. Drawback may be claimed on the quantity of eligible merchandise that appears in the exported articles, regardless of whether there is waste, and no records of waste need be maintained. If there is valuable waste recovered from the manufacturing operation and records are kept which show the quantity and value of the waste, drawback may be claimed on the quantity of eligible material used to produce the exported articles, less the amount of that merchandise which the value of the waste would replace. (If remnants and/or spoilage occur during manufacture or production, the quantity of imported merchandise used will be determined by deducting from the quantity of piece goods received and put into manufacture or production the quantity of such remnants and/or spoilage. The remaining quantity will be reduced by the quantity thereof which the value of the rag waste, if any, would replace.) K. General Requirements The manufacturer or producer will: 1. Comply fully with the terms of this general ruling when claiming drawback; 2. Open its factory and records for examination at all reasonable hours by authorized Government officers; 3. Keep its drawback related records and supporting data for at least 3 years from the date of liquidation of any drawback claim predicated in whole or in part upon this general ruling; 4. Keep its letter of notification of intent to operate under this general ruling current by reporting promptly to the drawback office which liquidates its claims any changes in the information required by the General Instructions of this Appendix (I. General Instructions, 1 through 10), the corporate name, or corporate organization by succession or reincorporation. 5. Keep a copy of this general ruling on file for ready reference by employees and require all officials and employees concerned to familiarize themselves with the provisions of this general ruling; and 6. Issue instructions to insure proper compliance with 19 U.S.C. 1313, part 190 of the CBP Regulations and this general ruling. Appendix B to Part 190—Sample Formats for Applications for Specific Manufacturing Drawback Rulings Table of Contents I. General II. Format for Application for Specific Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) and 1313(b) (Combination) III. Format for Application for Specific Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) IV. Format for Application for Specific Manufacturing Drawback Ruling Under 19 U.S.C. 1313(d) V. Format for Application for Specific Manufacturing Drawback Ruling Under 19 U.S.C. 1313(g) I. General Applications for specific manufacturing drawback rulings using these sample formats must be submitted to, reviewed, and approved by CBP Headquarters. See [email protected]. II. Format for Application for Specific Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) and 1313(b) (Combination). COMPANY LETTERHEAD (Optional) U.S. Customs and Border Protection, Entry Process and Duty Refunds, Regulations and Rulings, Office of Trade, 90 K Street NE—10th Floor (Mail Stop 1177), Washington, DC 20229-1177. Dear Sir or Madam: We, (Applicant's Name), a (State, e.g., Delaware) corporation (or other described entity) submit this application for a specific manufacturing drawback ruling that our manufacturing operations qualify for drawback under title 19, United States Code, §§ 1313(a) & (b), and part 190 of the CBP Regulations. We request that CBP authorize drawback on the basis of this application. NAME AND ADDRESS AND IRS NUMBER (WITH SUFFIX) OF APPLICANT (Section 190.8(a) of the CBP Regulations provides that each manufacturer or producer of articles intended for exportation with the benefit of drawback must apply for a specific manufacturing drawback ruling, unless operating under a general manufacturing drawback ruling under § 190.7 of the CBP Regulations. CBP will not approve an application which shows an unincorporated division or company as the applicant ( see LOCATION OF FACTORY (Provide the address of the factory(s) where the process of manufacture or production will take place. Indicate if the factory is a different legal entity from the applicant, and indicate if operating under an Agent's general manufacturing drawback ruling.) PERSONS WHO WILL SIGN DRAWBACK DOCUMENTS (List persons legally authorized to bind the corporation who will sign drawback documents. Section 190.6 of the CBP Regulations permits only the president, vice president, secretary, treasurer, and any employee legally authorized to bind the corporation to sign for a corporation. In addition, a person within a business entity with a customs power of attorney for the company may sign. A customs power of attorney may also be given to a licensed customs broker. This heading should be changed to Names of Partners or Proprietor in the case of a partnership or sole proprietorship, respectively ( see GENERAL STATEMENT (The following questions must be answered:) 1. Who will be the importer of the designated merchandise? (If the applicant will not always be the importer of the designated merchandise, specify that the applicant understand its obligations to maintain records to support the transfer under § 190.10, and its liability under § 190.63.) 2. Will an agent be used to process the designated or the substituted merchandise into articles? (If an agent is to be used, the applicant must state it will comply with T.D.s 55027(2) and 55207(1) and § 190.9, as applicable, and that its agent will submit a letter of notification of intent to operate under the general manufacturing drawback ruling for agents ( see see 3. Will the applicant be the exporter? (If the applicant will not be the exporter in every case, but will be the claimant, the manufacturer must state that it will reserve the right to claim drawback with the knowledge and written consent of the exporter (19 CFR 190.82).) PROCEDURES UNDER SECTION 1313(b) (PARALLEL COLUMNS—SAME 8-DIGIT CLASSIFICATION) Imported merchandise or drawback products 1 Duty-paid, duty-free, or domestic merchandise, of the same 8-digit HTSUS subheading number as that designated which will be used in the production of the exported products. 1. 1. 2. 2. 3. 3. (Following the items 1 The imported merchandise designated in our claims will be classifiable under the same 8-digit HTSUS classification as the merchandise used in producing the exported articles on which we claim drawback. (In order to successfully claim drawback it is necessary to prove that the duty-paid, duty-free, or domestic merchandise, which is to be substituted for the imported merchandise, is classifiable under the same 8-digit HTSUS classification. To enable CBP to rule on the same 8-digit HTSUS classification, the application must include a detailed description of the designated imported merchandise and of the substituted duty-paid, duty-free, or domestic merchandise to be used to produce the exported articles. The application must also include the Bill of Materials and/or formulas annotated with the HTSUS classifications.) (It is essential that all the characteristics which determine the identity of the merchandise are specified in the application in order to substantiate that the merchandise meets the the same 8-digit HTSUS classification statutory requirement. These characteristics should clearly distinguish merchandise of different identities.) (The descriptions should be sufficient to classify the merchandise in the same 8-digit HTSUS subheading number included in the Parallel Columns. The left-hand column will consist of the name and the 8-digit HTSUS subheading number of the imported merchandise. The right-hand column will consist of the name and the 8-digit HTSUS subheading number for the duty-paid, duty-free, or domestic designated merchandise. Amendments to rulings will be required if any changes to the HTSUS classifications occur.) EXPORTED ARTICLES ON WHICH DRAWBACK WILL BE CLAIMED (Name each article to be exported. When the identity of the product is not clearly evident by its name, state what the product is (e.g., a herbicide). There must be a match between each article described under the PROCESS OF MANUFACTURE OR PRODUCTION section below and each article listed here.) PROCESS OF MANUFACTURE OR PRODUCTION (Drawback under § 1313(b) is not allowable except where a manufacture or production exists. Manufacture or production is defined, for drawback purposes, in § 190.2. In order to obtain drawback under § 1313(b), it is essential for the applicant to show use in manufacture or production by providing a thorough description of the manufacturing process. This description should include the name and exact condition of the merchandise listed in the Parallel Columns, a complete explanation of the processes to which it is subjected in this country, the effect of such processes, the name and exact description of the finished article, and the use for which the finished article is intended. When applicable, include equations of any chemical reactions. Including a flow chart in the description of the manufacturing process is an excellent means of illustrating how a manufacture or production occurs. Flow charts can clearly illustrate if and at what point during the manufacturing process by-products and wastes are generated.) (This section should contain a description of the process by which each item of merchandise listed in the Parallel Columns above is used to make or produce every article that is to be exported.) MULTIPLE PRODUCTS 1. Relative Values (Some processes result in the separation of the merchandise into two or more products. If applicable, list all of the products. State that you will record the market value of each product at the time it is first separated in the manufacturing process. If this section is not applicable to you, then state so.) (Drawback law mandates the assignment of relative values when two or more products are necessarily produced in the same operation. For instance, the refining of flaxseed necessarily produces linseed oil and linseed husks (animal feed), and drawback must be distributed to each product in accordance with its relative value. However, the voluntary election of a steel fabricator, for instance, to use part of a lot of imported steel to produce automobile doors, and part of the lot to produce automobile fenders, does not call for relative value distribution.) (The relative value of a product is its value divided by the total value of all products, whether or not exported. For example, 100 gallons of drawback merchandise are used to produce 100 gallons of products, including 60 gallons of product A, 20 gallons of product B, and 20 gallons of product C. At the time of separation, the unit values of products A, B, and C are $5, $10, and $50 respectively. The relative value of product A is $300 divided by $1,500 or 1/5 2/15 2/3 1/5 2/15 2/3 (Drawback is allowable on exports of any of multiple products, but is not permitted on exports of valuable waste. In making this distinction between a product and valuable waste, the applicant should address the following significant elements: (1) The nature of the material of which the residue is composed; (2) the value of the residue as compared to the value of the principal manufactured product and the raw material; (3) the use to which it is put; (4) its status under the tariff laws, if imported; (5) whether it is a commodity recognized in commerce; (6) whether it must be subjected to some process to make it saleable.) 2. Producibility (Some processes result in the separation of fixed proportions of each product, while other processes afford the opportunity to increase or decrease the proportion of each product. An example of the latter is petroleum refining, where the refiner has the option to increase or decrease the production of one or more products relative to the others. State under this heading whether you can or cannot vary the proportionate quantity of each product.) (The MULTIPLE PRODUCTS section consists of two sub-sections: Relative Values and Producibility. If multiple products do not result from your operation state “Not Applicable” for the entire section. If multiple products do result from your operation Relative Values will always apply. However, Producibility may or may not apply. If Producibility does not apply to your multiple product operation state “Not Applicable” for this sub-section.) WASTE (Many processes result in residue materials which, for drawback purposes, are treated as wastes. Describe any residue materials which you believe should be so treated. If no waste results, include a statement to that effect.) (If waste occurs, state: (1) Whether or not it is recovered, (2) whether or not it is valueless, and (3) what you do with it. This information is required whether claims are made on a “used in” or “appearing in” basis and regardless of the amount of waste incurred.) (Irrecoverable wastes are those consisting of materials which are lost in the process. Valueless wastes are those which may be recovered but have no value. These irrecoverable and valueless wastes do not reduce the drawback claim provided the claim is based on the quantity of imported material used in manufacturing. If the claim is based upon the quantity of imported merchandise appearing in the exported article, irrecoverable and valueless waste will cause a reduction in the amount of drawback.) (Valuable wastes are those recovered wastes which have a value either for sale or for use in a different manufacturing process. However, it should be noted that this standard applies to the entire industry and is not a selection on your part. An option by you not to choose to sell or use the waste in some different operation does not make it valueless if another manufacturer can use the waste. State what you do with the waste. If you have to pay someone to get rid of it, or if you have buyers for the waste, you must state so in your application regardless of what basis you are using.) (If you recover valuable waste and you choose to claim on the basis of the quantity of merchandise used in producing the exported articles (less any valuable waste), state that you will keep records to establish the quantity and value of the waste recovered. See STOCK IN PROCESS (Some processes result in another type of residual material, namely, stock in process, which affects the allowance of drawback. Stock in process may exist when residual material resulting from a manufacturing or processing operation is reintroduced into a subsequent manufacturing or processing operation; e.g., trim pieces from a cast article. The effect of stock in process on a drawback claim is that the amount of drawback for the period in which the stock in process was withdrawn from the manufacturing or processing operation (or the manufactured article, if manufacturing or processing periods are not used) is reduced by the quantity of merchandise or drawback products used to produce the stock in process if the “used in” or “used in less valuable waste” methods are used (if the “appearing in” method is used, there will be no effect on the amount of drawback), and the quantity of merchandise or drawback products used to produce the stock in process is added to the merchandise or drawback products used in the subsequent manufacturing or production period (or the subsequently produced article)). (If stock in process occurs and claims are to be based on stock in process, the application must include a statement to that effect. The application must also include a statement that merchandise is considered to be used in manufacture at the time it was originally processed, so that the stock in process will not be included twice in the computation of the merchandise used to manufacture the finished articles on which drawback is claimed.) LOSS OR GAIN (Separate and distinct from WASTE) (Some manufacturing processes result in an intangible loss or gain of the net weight or measurement of the merchandise used. This loss or gain is caused by atmospheric conditions, chemical reactions, or other factors. If applicable, state the approximate usual percentage or quantity of such loss or gain. Note that percentage values will be considered to be measured by weight unless otherwise specified. Loss or gain does not occur during all manufacturing processes. If loss or gain does not apply to your manufacturing process, state “Not Applicable.”) PROCEDURES AND RECORDS MAINTAINED We will maintain records to establish: 1. The identity and 8-digit HTSUS subheading number of the merchandise we designate; 2. The quantity of merchandise classifiable under the same 8-digit HTSUS subheading number as the designated merchandise 2 2 3. That, within 5 years after the date of importation, we used the designated merchandise to produce articles. During the same 5-year period, we produced 3 3 We realize that to obtain drawback the claimant must establish that the completed articles were exported within 5 years after the importation of the imported merchandise. Our records establishing our compliance with these requirements will be available for audit by CBP during business hours. We understand that drawback is not payable without proof of compliance. INVENTORY PROCEDURES (Describe your inventory records and state how those records will meet the drawback recordkeeping requirements set forth in 19 U.S.C. 1313(b) and part 190 of the CBP Regulations as discussed under the heading “PROCEDURES AND RECORDS MAINTAINED”. To insure compliance the following areas, as applicable, should be included in your discussion:) RECEIPT AND STORAGE OF DESIGNATED MERCHANDISE RECORDS OF USE OF DESIGNATED MERCHANDISE BILLS OF MATERIALS MANUFACTURING RECORDS WASTE RECORDS RECORDS OF USE OF DUTY-PAID, DUTY-FREE OR DOMESTIC MERCHANDISE OF THE REQUIRED SAME 8-DIGIT HTSUS SUBHEADING NUMBER WITHIN 5 YEARS AFTER THE DATE OF IMPORTATION FINISHED STOCK STORAGE RECORDS SHIPPING RECORDS (Proof of time frames may be specific or inclusive, e.g., within 120 days, but specific proof is preferable. Separate storage and identification of each article or lot of merchandise usually will permit specific proof of exact dates. Proof of inclusive dates of use, production or export may be acceptable, but in such cases it is best to describe very specifically the data you intend to use to establish each legal requirement, thereby avoiding misunderstandings at the time of audit.) (If you do not describe the inventory records that you will use, you must state: “All legal requirements will be met by our inventory procedures.” However, it should be noted that without a detailed description of the inventory procedures set forth in the application, a judgment as to the adequacy of such a statement cannot be made until a drawback claim is verified. Approval of this application for a specific manufacturing drawback ruling merely constitutes approval of the ruling application as submitted; it does not constitute approval of the applicant's recordkeeping procedures if those procedures are solely described as meeting the legal requirements, without specifically stating how the requirements will be met. Drawback is not payable without proof of compliance.) BASIS OF CLAIM FOR DRAWBACK (There are three different bases that may be used to claim drawback: (1) Used in; (2) appearing in; and (3) used in less valuable waste.) (The “used in” basis may be employed only if there is either no waste, or the waste is valueless or unrecovered. Irrecoverable or valueless waste does not reduce the amount of drawback when claims are based on the “used in” basis. Drawback is payable in the amount of 99 percent of the duties, taxes, and fees, paid on the quantity of imported material designated as the basis for the allowance of drawback on the exported articles. The designated quantity may not exceed the quantity of material actually used in the manufacture of the exported articles.) (For example, if 100 pounds of material, valued at $1.00 per pound, were used in manufacture resulting in 10 pounds of irrecoverable or valueless waste, the 10 pounds of irrecoverable or valueless waste would not reduce the drawback. In this case drawback would be payable on 99% of the duties, taxes, and fees paid on the 100 pounds of designated material used to produce the exported articles.) (The “appearing in” basis may be used regardless of whether there is waste. If the “appearing in” basis is used, the claimant does not need to keep records of waste and its value. However, the manufacturer must establish the identity and quantity of the merchandise appearing in the exported product and provide this information. Waste reduces the amount of drawback when claims are made on the “appearing in” basis. Drawback is payable on 99 percent of the duties, taxes, and fees paid on the quantity of material designated, which may not exceed the quantity of eligible material that appears in the exported articles. “Appearing in” may not be used if multiple products are involved.) (Based on the previous example, drawback would be payable on the 90 pounds of merchandise which actually went into the exported product (appearing in) rather than the 100 pounds used in as set forth previously.) (The “used in less valuable waste” basis may be employed when the manufacturer recovers valuable waste, and keeps records of the quantity and value of waste from each lot of merchandise. The value of the waste reduces the amount of drawback when claims are based on the “used in less valuable waste” basis. When valuable waste is incurred, the drawback allowance on the exported article is based on the duties, taxes, and fees, paid on the quantity of merchandise used in the manufacture, as reduced by the quantity of such merchandise which the value of the waste would replace. In such a case, drawback is claimed on the quantity of eligible material actually used to produce the exported product, less the amount of such material which the value of the waste would replace. Note section 190.26(c) of the CBP Regulations.) (Based on the previous examples, if the 10 pounds of waste had a value of $.50 per pound, then the 10 pounds of waste, having a total value of $5.00, would be equivalent in value to 5 pounds of the designated material. Thus the value of the waste would replace 5 pounds of the merchandise used, and drawback is payable on 99 percent of the duties, taxes, and fees paid on the 95 pounds of imported material designated as the basis for the allowance of drawback on the exported article rather than on the 100 pounds “used in” or the 90 pounds “appearing in” as set forth in the above examples.) (Two methods exist for the manufacturer to show the quantity of material used or appearing in the exported article: (1) Schedule or (2) Abstract.) (A “schedule” shows the quantity of material used in producing each unit of product. The schedule method is usually employed when a standard line of merchandise is being produced according to fixed formulas. Some schedules will show the quantity of merchandise used to manufacture or produce each article and others will show the quantity appearing in each finished article. Schedules may be prepared to show the quantity of merchandise either on the basis of percentages or by actual weights and measurements. A schedule determines the amount of material that is needed to produce a unit of product before the material is actually used in production.) (An “abstract” is the summary of the records which shows the total quantity of merchandise used in producing all articles during the period covered by the abstract. The abstract looks at a period of time, for instance 3 months, in which the quantity of material has been used. An abstract looks back at how much material was actually used after a production period has been completed.) (An applicant who fails to indicate a “schedule” choice must base its claims on the “abstract” method. State which Basis and Method you will use. An example of Used In by Schedule follows:) We will claim drawback on the quantity of (specify material) used in manufacturing (exported article) according to the schedule set forth below. (Section 190.8(f) of the CBP Regulations requires submission of the schedule with the application for a specific manufacturing drawback ruling. An applicant who desires to file supplemental schedules with the drawback office whenever there is a change in the quantity or material used should state:) We request permission to file supplemental schedules with the drawback office covering changes in the quantities of material used to produce the exported articles, or different styles or capacities of containers of such exported merchandise. (Neither the “appearing in” basis nor the “schedule” method for claiming drawback may be used where the relative value procedure is required.) PROCEDURES UNDER SECTION 1313(a) IMPORTED MERCHANDISE OR DRAWBACK PRODUCTS USED UNDER 1313(a) (List the imported merchandise or drawback products.) EXPORTED ARTICLES ON WHICH DRAWBACK WILL BE CLAIMED (Name each article to be exported. When the identity of the product is not clearly evident by its name state what the product is, e.g., a herbicide. There must be a match between each article described under the PROCESS OF MANUFACTURE AND PRODUCTION section below and each article listed here.) (If the merchandise used under § 1313(a) is not also used under § 1313(b), the sections entitled PROCESS OF MANUFACTURE OR PRODUCTION, BY-PRODUCTS, LOSS OR GAIN, and STOCK IN PROCESS should be included here to cover merchandise used under § 1313(a). However, if the merchandise used under § 1313(a) is also used under § 1313(b) these sections need not be repeated unless they differ in some way from the § 1313(b) descriptions.) PROCEDURES AND RECORDS MAINTAINED We will maintain records to establish: 1. That the exported articles on which drawback is claimed were produced with the use of the imported merchandise, and 2. The quantity of imported merchandise 4 4 We realize that to obtain drawback the claimant must establish that the completed articles were exported within 5 years after importation of the imported merchandise. We understand that drawback is not payable without proof of compliance. INVENTORY PROCEDURES (This section must be completed separately from that set forth under the § 1313(b) portion of your application. The legal requirements under § 1313(a) differ from those under § 1313(b).) (Describe your inventory procedures and state how you will identify the imported merchandise from date of importation until it is incorporated in the articles to be exported. Also describe how you will identify the finished articles from the time of manufacture until shipment.) BASIS OF CLAIM FOR DRAWBACK ( See AGREEMENTS The Applicant specifically agrees that it will: 1. Operate in full conformance with the terms of this application for a specific manufacturing drawback ruling when claiming drawback; 2. Open its factory and records for examination at all reasonable hours by authorized Government officers; 3. Keep its drawback related records and supporting data for at least 3 years from the date of liquidation of any drawback claim predicated in whole or in part upon this application; 4. Keep this application current by reporting promptly to the drawback office which liquidates its claims any changes in the number or locations of its offices or factories, the corporate name, the persons who will sign drawback documents, the basis of claim used for calculating drawback, the decision to use or not to use an agent under § 190.9 or the identity of an agent under that section, or the corporate organization by succession or reincorporation; 5. Keep this application current by reporting promptly to CBP Headquarters all other changes affecting information contained in this application; 6. Keep a copy of this application and the letter of approval by CBP Headquarters on file for ready reference by employees and require all officials and employees concerned to familiarize themselves with the provisions of this application and that letter of approval; and 7. Issue instructions to insure proper compliance with title 19, United States Code, section 1313, part 190 of the CBP Regulations and this application and letter of approval. DECLARATION OF OFFICIAL I declare that I have read this application for a specific manufacturing drawback ruling; that I know the averments and agreements contained herein are true and correct; and that my signature on this ____ day of ________ 20____, makes this application binding on (Name of Applicant Corporation, Partnership, or Sole Proprietorship) By 5 5 (Signature and Title) (Print Name) III. Format for Application for Specific Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) COMPANY LETTERHEAD (Optional) U.S. Customs and Border Protection, Entry Process and Duty Refunds Branch, Commercial and Trade Facilitation Division, Regulations and Rulings, Office of Trade, 90 K Street NE—10th Floor (Mail Stop 1177), Washington, DC 20229-1177. Dear Sir or Madam: We, (Applicant's Name), a (State, e.g., Delaware) corporation (or other described entity) submit this application for a specific manufacturing drawback ruling that our manufacturing operations qualify for drawback under title 19, United States Code, section 1313(b), and part 190 of the CBP Regulations. We request that CBP authorize drawback on the basis of this application. NAME AND ADDRESS AND IRS NUMBER (WITH SUFFIX) OF APPLICANT (Section 190.8(a) of the CBP Regulations provides that each manufacturer or producer of articles intended for exportation with the benefit of drawback will apply for a specific manufacturing drawback ruling, unless operating under a general manufacturing drawback ruling under § 190.7 of the CBP Regulations. CBP will not approve an application which shows an unincorporated division or company as the applicant ( see LOCATION OF FACTORY (Provide the address of the factory(s) where the process of manufacture or production will take place. Indicate if the factory is a different legal entity from the applicant, and indicate if the applicant is operating under an Agent's general manufacturing drawback ruling.) PERSONS WHO WILL SIGN DRAWBACK DOCUMENTS (List persons legally authorized to bind the corporation who will sign drawback documents. Section 190.6 of the CBP Regulations permits only the president, vice president, secretary, treasurer, and any employee legally authorized to bind the corporation to sign for a corporation. In addition, a person within a business entity with a customs power of attorney for the company may sign. A customs power of attorney may also be given to a licensed customs broker. This heading should be changed to NAMES OF PARTNERS or PROPRIETOR in the case of a partnership or sole proprietorship, respectively ( see GENERAL STATEMENT (The following questions must be answered:) 1. Who will be the importer of the designated merchandise? (If the applicant will not always be the importer of the designated merchandise, specify that the applicant understand its obligations to maintain records to support the transfer under § 190.10, and its liability under § 190.63.) 2. Will an agent be used to process the designated or the substituted merchandise into articles? (If an agent is to be used, the applicant must state it will comply with T.D.s 55027(2) and 55207(1), and § 190.9, as applicable, and that its agent will submit a letter of notification of intent to operate under the general manufacturing drawback ruling for agents ( see see 3. Will the applicant be the exporter? (If the applicant will not be the exporter in every case, but will be the claimant, the manufacturer must state that it will reserve the right to claim drawback with the knowledge and written consent of the exporter (19 CFR 190.82).) PARALLEL COLUMNS—“SAME 8-DIGIT HTSUS CLASSIFICATION” Imported merchandise or drawback products 1 Duty-paid, duty-free or domestic merchandise of the Same 8-digit HTSUS subheading number as that designated which will be used in the production of the exported products. 1. 1. 2. 2. 3. 3. (Following the items listed in the Parallel Columns, the applicant must make a statement affirming the same 8-digit HTSUS subheading numberof the merchandise. This statement should be included in the application exactly as it is stated below: 1 The imported merchandise designated in our claims will be classifiable under the same 8-digit HTSUS subheading number as the merchandise used in producing the exported articles on which we claim drawback, such that the merchandise used would, if imported, be subject to the same rate of duty as the designated merchandise. (In order to successfully claim drawback it is necessary to prove that the duty-paid, duty-free, or domestic merchandise, which is to be substituted for the imported merchandise, is “classifiable under the same 8-digit HTSUS subheading number.” To enable CBP to rule on the proper “same 8-digit HTSUS subheading number,” the application must include a detailed description of the designated imported merchandise, and of the substituted duty-paid, duty-free, or domestic merchandise used to produce the exported articles. The application must also include the Bill of Materials and/or formulas annotated with the HTSUS classification.) (It is essential that all the characteristics which determine the identity of the merchandise are provided in the application in order to substantiate that the merchandise meets the “same 8-digit HTSUS subheading number” statutory requirement. These characteristics should clearly distinguish merchandise of different identities. (The descriptions of the “same 8-digit HTSUS subheading number” merchandise should be included in the Parallel Columns. The left-hand column will consist of the name and 8-digit HTSUS subheading number of the imported merchandise. The right-hand column will consist of the name and 8-digit HTSUS subheading number for the duty-paid, duty-free, or domestic designated merchandise. Amendments to the ruling will be required if any changes to the HTSUS classifications occur.) EXPORTED ARTICLES ON WHICH DRAWBACK WILL BE CLAIMED (Name each article to be exported. When the identity of the product is not clearly evident by its name state what the product is, e.g., a herbicide. There must be a match between each article described under the PROCESS OF MANUFACTURE AND PRODUCTION section below and each article listed here.) PROCESS OF MANUFACTURE OR PRODUCTION (Drawback under § 1313(b) is not allowable except where a manufacture or production exists. Manufacture or production is defined, for drawback purposes, in § 190.2. In order to obtain drawback under § 1313(b), it is essential for the applicant to show use in manufacture or production by providing a thorough description of the manufacturing process. This description should include the name and exact condition of the merchandise listed in the Parallel Columns, a complete explanation of the processes to which it is subjected in this country, the effect of such processes, the name and exact description of the finished article, and the use for which the finished article is intended. When applicable, include equations of any chemical reactions. Including a flow chart in the description of the manufacturing process is an excellent means of illustrating how manufacture or production occurs. Flow charts can clearly illustrate if and at what point during the manufacturing process by-products and wastes are generated.) (This section should contain a description of the process by which each item of merchandise listed in the Parallel Columns above is used to make or produce every article that is to be exported.) MULTIPLE PRODUCTS 1. Relative Values (Some processes result in the separation of the merchandise into two or more products. If applicable, list all of the products. State that you will record the market value of each product or by-product at the time it is first separated in the manufacturing process. If this section is not applicable to you, then state so.) (Drawback law mandates the assignment of relative values when two or more products are necessarily produced in the same operation. For instance, the refining of flaxseed necessarily produces linseed oil and linseed husks (animal feed), and drawback must be distributed to each product in accordance with its relative value. However, the voluntary election of a steel fabricator, for instance, to use part of a lot of imported steel to produce automobile doors, and part of the lot to produce automobile fenders, does not call for relative value distribution.) (The relative value of a product is its value divided by the total value of all products, whether or not exported. For example, 100 gallons of drawback merchandise are used to produce 100 gallons of products, including 60 gallons of product A, 20 gallons of product B, and 20 gallons of product C. At the time of separation, the unit values of products A, B, and C are $5, $10, and $50 respectively. The relative value of product A is $300 divided by $1,500 or 1/5 2/15 2/3 1/5 2/15 2/3 (Drawback is allowable on exports of any of multiple products, but is not permitted on exports of valuable waste. In making this distinction between a product and valuable waste, the applicant should address the following significant elements: (1) The nature of the material of which the residue is composed; (2) the value of the residue as compared to the value of the principal manufactured product and the raw material; (3) the use to which it is put; (4) its status under the tariff laws, if imported; (5) whether it is a commodity recognized in commerce; (6) whether it must be subjected to some process to make it saleable.) 2. Producibility (Some processes result in the separation of fixed proportions of each product, while other processes afford the opportunity to increase or decrease the proportion of each product. An example of the latter is petroleum refining, where the refiner has the option to increase or decrease the production of one or more products relative to the others. State under this heading whether you can or cannot vary the proportionate quantity of each product.) (The MULTIPLE PRODUCTS section consists of two sub-sections: Relative Values and Producibility. If multiple products do not result from your operation state “Not Applicable” for the entire section. If multiple products do result from your operation Relative Values will always apply. However, Producibility may or may not apply. If Producibility does not apply to your multiple product operation, then state “Not Applicable” for this sub-section.) WASTE (Many processes result in residue materials which, for drawback purposes, are treated as waste. Describe any residue materials which you believe should be so treated. If no waste results, include a statement to that effect.) (If waste occurs, state: (1) Whether or not it is recovered, (2) whether or not it is valueless, and (3) what you do with it. This information is required whether claims are made on a “used in” or “appearing in” basis, and regardless of the amount of waste incurred.) (Irrecoverable wastes are those consisting of materials which are lost in the process. Valueless wastes are those which may be recovered, but have no value. These irrecoverable and valueless wastes do not reduce the drawback claim provided the claim is based on the quantity of imported material used in manufacturing. If the claim is based upon the quantity of imported merchandise appearing in the exported article, irrecoverable and valueless waste will cause a reduction in the amount of drawback.) (Valuable wastes are those recovered wastes which have a value either for sale or for use in a different manufacturing process. However, it should be noted that this standard applies to the entire industry and is not a selection on your part. An option by you not to choose to sell or use the waste in some different operation does not make it valueless if another manufacturer can use the waste. State what you do with the waste. If you have to pay someone to get rid of it, or if you have buyers for the waste, you must state so in your application regardless of what basis you are using.) (If you recover valuable waste and if you choose to claim on the basis of the quantity of merchandise used in producing the exported articles less any valuable waste, state that you will keep records to establish the quantity and value of the waste recovered. See STOCK IN PROCESS (Some processes result in another type of residual material, namely, stock in process, which affects the allowance of drawback. Stock in process may exist when residual material resulting from a manufacturing or processing operation is reintroduced into a subsequent manufacturing or processing operation; e.g., trim pieces from a cast article. The effect of stock in process on a drawback claim is that the amount of drawback for the period in which the stock in process was withdrawn from the manufacturing or processing operation (or the manufactured article, if manufacturing or processing periods are not used) is reduced by the quantity of merchandise or drawback products used to produce the stock in process if the “used in” or “used in less valuable waste” methods are used (if the “appearing in” method is used, there will be no effect on the amount of drawback), and the quantity of merchandise or drawback products used to produce the stock in process is added to the merchandise or drawback products used in the subsequent manufacturing or production period (or the subsequently produced article)). (If stock in process occurs and claims are to be based on stock in process, the application must include a statement to that effect. The application must also include a statement that merchandise is considered to be used in manufacture at the time it was originally processed, so that the stock in process will not be included twice in the computation of the merchandise used to manufacture the finished articles on which drawback is claimed.) LOSS OR GAIN (Separate and distinct from WASTE) (Some manufacturing processes result in an intangible loss or gain of the net weight or measurement of the merchandise used. This loss or gain is caused by atmospheric conditions, chemical reactions, or other factors. If applicable, state the approximate usual percentage or quantity of such loss or gain. Note that percentage values will be considered to be measured “by weight” unless otherwise specified. Loss or gain does not occur during all manufacturing processes. If loss or gain does not apply to your manufacturing process, state “Not Applicable.”) PROCEDURES AND RECORDS MAINTAINED We will maintain records to establish: 1. The identity and 8-digit HTSUS subheading number of the merchandise we designate; 2. The quantity of merchandise classifiable under the same 8-digit HTSUS subheading number as the designated merchandise 2 2 3. That, within 5 years after the date of importation, we used the designated merchandise to produce articles. During the same 5-year period, we produced 3 3 We realize that to obtain drawback the claimant must establish that the completed articles were exported within 5 years after the importation of the imported merchandise. Our records establishing our compliance with these requirements will be available for audit by CBP during business hours. We understand that drawback is not payable without proof of compliance. INVENTORY PROCEDURES (Describe your inventory records and state how those records will meet the drawback recordkeeping requirements set forth in 19 U.S.C. 1313(b) and part 190 of the CBP Regulations as discussed under the heading PROCEDURES AND RECORDS MAINTAINED. To help ensure compliance the following areas, as applicable, should be included in your discussion:) RECEIPT AND STORAGE OF DESIGNATED MERCHANDISE RECORDS OF USE OF DESIGNATED MERCHANDISE BILLS OF MATERIALS MANUFACTURING RECORDS WASTE RECORDS RECORDS OF USE OF DUTY-PAID, DUTY-FREE OR DOMESTIC MERCHANDISE OF THE REQUIRED SAME 8-DIGIT HTSUS SUBHEADING WITHIN 5 YEARS AFTER IMPORTATION OF THE DESIGNATED MERCHANDISE FINISHED STOCK STORAGE RECORDS SHIPPING RECORDS (Proof of time frames may be specific or inclusive, e.g., within 120 days, but specific proof is preferable. Separate storage and identification of each article or lot of merchandise usually will permit specific proof of exact dates. Proof of inclusive dates of use, production or export may be acceptable, but in such cases it is better to describe very specifically the data you intend to use to establish each legal requirement, thereby avoiding misunderstandings at the time of audit.) (If you do not describe the inventory records that you will use, you must state: “All legal requirements will be met by our inventory procedures.” However, it should be noted that without a detailed description of the inventory procedures set forth in the application, a judgment as to the adequacy of such a statement cannot be made until a drawback claim is verified. Approval of this application for a specific manufacturing drawback ruling merely constitutes approval of the ruling application as submitted; it does not constitute approval of the applicant's recordkeeping procedures if those procedures are solely described as meeting the legal requirements, without specifically stating how the requirements will be met. Drawback is not payable without proof of compliance.) BASIS OF CLAIM FOR DRAWBACK (There are three different bases that may be used to claim drawback: (1) Used in; (2) appearing in; and (3) used in less valuable waste.) (The “used in” basis may be employed only if there is either no waste, or the waste is valueless or unrecovered. Irrecoverable or valueless waste does not reduce the amount of drawback when claims are based on the “used in” basis. Drawback is payable in the amount of 99 percent of the duties, taxes, and fees, paid on the quantity of imported material designated as the basis for the allowance of drawback on the exported articles. The designated quantity may not exceed the quantity of material actually used in the manufacture of the exported articles.) (For example, if 100 pounds of material, valued at $1.00 per pound, were used in manufacture resulting in 10 pounds of irrecoverable or valueless waste, the 10 pounds of irrecoverable or valueless waste would not reduce the drawback. In this case drawback would be payable on 99% of the duties, taxes, and fees, paid on the 100 pounds of designated material used to produce the exported articles.) (The “appearing in” basis may be used regardless of whether there is waste. If the “appearing in” basis is used, the claimant does not need to keep records of waste and its value. However, the manufacturer must establish the identity and quantity of the merchandise appearing in the exported product and provide this information. Waste reduces the amount of drawback when claims are made on the “appearing in” basis. Drawback is payable on 99 percent of the duties, taxes, and fees paid on the quantity of material designated, which may not exceed the quantity of eligible material that appears in the exported articles. “Appearing in” may not be used if multiple products are involved.) (Based on the previous example, drawback would be payable on the 90 pounds of merchandise which actually went into the exported product (appearing in) rather than the 100 pounds used in as set forth previously.) (The “used in less valuable waste” basis may be employed when the manufacturer recovers valuable waste, and keeps records of the quantity and value of waste from each lot of merchandise. The value of the waste reduces the amount of drawback when claims are based on the “used in less valuable waste” basis. When valuable waste is incurred, the drawback allowance on the exported article is based on the duties, taxes, and fees paid on the quantity of merchandise used in the manufacture, as reduced by the quantity of such merchandise which the value of the waste would replace. In such a case, drawback is claimed on the quantity of eligible material actually used to produce the exported product, less the amount of such material which the value of the waste would replace. Note section 190.26(c) of the CBP Regulations.) (Based on the previous examples, if the 10 pounds of waste had a value of $.50 per pound, then the 10 pounds of waste, having a total value of $5.00, would be equivalent in value to 5 pounds of the designated material. Thus the value of the waste would replace 5 pounds of the merchandise used, and drawback is payable on 99 percent of the duties, taxes, and fees paid on the 95 pounds of imported material designated as the basis for the allowance of drawback on the exported article rather than on the 100 pounds “used in” or the 90 pounds “appearing in” as set forth in the above examples.) (Two methods exist for the manufacturer to show the quantity of material used or appearing in the exported article: (1) Schedule or (2) Abstract.) (A “schedule” shows the quantity of material used in producing each unit of product. The schedule method is usually employed when a standard line of merchandise is being produced according to fixed formulas. Some schedules will show the quantity of merchandise used to manufacture or produce each article and others will show the quantity appearing in each finished article. Schedules may be prepared to show the quantity of merchandise either on the basis of percentages, or by actual weights and measurements. A schedule determines the amount of material that is needed to produce a unit of product, before the material is actually used in production.) (An “abstract” is the summary of the records which shows the total quantity of merchandise used in producing all articles during the period covered by the abstract. The abstract looks at a period of time, for instance 3 months, in which the quantity of material has been used. An abstract looks back at how much material was actually used after a production period has been completed.) (An applicant who fails to indicate the “schedule” choice must base its claims on the “abstract” method. State which Basis and Method you will use. An example of Used In by Schedule would read:) We will claim drawback on the quantity of (specify material) used in manufacturing (exported article) according to the schedule set forth below. (Section 190.8(f) of the CBP Regulations requires submission of the schedule with the application for a specific manufacturing drawback ruling. An applicant who desires to file supplemental schedules with the drawback office whenever there is a change in the quantity or material used should state:) We request permission to file supplemental schedules with the drawback office covering changes in the quantities of material used to produce the exported articles, or different styles or capacities of containers of such exported merchandise. (Neither the “appearing in” basis nor the “schedule” method for claiming drawback may be used where the relative value procedure is required.) AGREEMENTS The Applicant specifically agrees that it will: 1. Operate in full conformance with the terms of this application for a specific manufacturing drawback ruling when claiming drawback; 2. Open its factory and records for examination at all reasonable hours by authorized Government officers; 3. Keep its drawback related records and supporting data for at least 3 years from the date of liquidation of any drawback claim predicated in whole or in part upon this application; 4. Keep this application current by reporting promptly to the drawback office which liquidates its claims any changes in the number or locations of its offices or factories, the corporate name, the persons who will sign drawback documents, the basis of claim used for calculating drawback, the decision to use or not to use an agent under § 190.9 or the identity of an agent under that section, or the corporate organization by succession or reincorporation; 5. Keep this application current by reporting promptly to CBP Headquarters, all other changes affecting information contained in this application; 6. Keep a copy of this application and the letter of approval by CBP Headquarters on file for ready reference by employees and require all officials and employees concerned to familiarize themselves with the provisions of this application and that letter of approval; and 7. Issue instructions to insure proper compliance with title 19, United States Code, section 1313, part 190 of the CBP Regulations and this application and letter of approval. Declaration of Official I declare that I have read this application for a specific manufacturing drawback ruling; that I know the averments and agreements contained herein are true and correct; and that my signature on this ____ day of ________ 20 ____, makes this application binding on (Name of Applicant Corporation, Partnership, or Sole Proprietorship) By 4 4 (Signature and Title) (Print Name) IV. Format for Application for Specific Manufacturing Drawback Ruling Under 19 U.S.C. 1313(d) COMPANY LETTERHEAD (Optional) U.S. Customs and Border Protection, Entry Process and Duty Refunds Branch, Commercial and Trade Facilitation Division, Regulations and Rulings, Office of Trade, 90 K Street NE—10th Floor (Mail Stop 1177), Washington, DC 20229-1177. Dear Sir or Madam: We, (Applicant's Name), a (State, e.g., Delaware) corporation (or other described entity) submit this application for a specific manufacturing drawback ruling that our manufacturing operations qualify for drawback under title 19, United States Code, section 1313(d), and part 190 of the CBP Regulations. We request that CBP authorize drawback on the basis of this application. NAME AND ADDRESS AND IRS NUMBER (WITH SUFFIX) OF APPLICANT (Section 190.8(a) of the CBP Regulations provides that each manufacturer or producer of articles intended for exportation with the benefit of drawback must apply for a specific manufacturing drawback ruling, unless operating under a general manufacturing drawback ruling under § 190.7 of the CBP Regulations. CBP will not approve an application which shows an unincorporated division or company as the applicant ( see LOCATION OF FACTORY (Provide the address of the factory(s) where the process of manufacture or production will take place. Indicate if the factory is a different legal entity from the applicant, and indicate if the applicant is operating under an Agent's general manufacturing drawback ruling.) PERSONS WHO WILL SIGN DRAWBACK DOCUMENTS (List persons legally authorized to bind the corporation who will sign drawback documents. Section 190.6 of the CBP Regulations permits only the president, vice president, secretary, treasurer, and any employee legally authorized to bind the corporation to sign for a corporation. In addition, a person within a business entity with a customs power of attorney for the company may sign. A customs power of attorney may also be given to a licensed customs broker. This heading should be changed to NAMES OF PARTNERS or PROPRIETOR in the case of a partnership or sole proprietorship, respectively ( see GENERAL STATEMENT (The exact material placed under this heading in individual cases will vary, but it should include such information as the type of business in which the manufacturer is engaged, whether the manufacturer is manufacturing for its own account or is performing the operation on a toll basis (including commission or conversion basis) for the account of others, whether the manufacturer is a direct exporter of its products or sells or delivers them to others for export, and whether drawback will be claimed by the manufacturer or by others.) (If an agent is to be used, the applicant must state it will comply with T.D.s 55027(2) and 55207(1), and § 190.9, as applicable, and that its agent will submit a letter of notification of intent to operate under the general manufacturing drawback ruling for agents ( see see (Regarding drawback operations conducted under § 1313(d), the data may describe the flavoring extracts, medicinal, or toilet preparations (including perfumery) manufactured with the use of domestic tax-paid alcohol; and where such alcohol is obtained or purchased.) TAX-PAID MATERIAL USED UNDER SECTION 1313(d) (Describe or list the tax-paid material) EXPORTED ARTICLES ON WHICH DRAWBACK WILL BE CLAIMED (Name each article to be exported) PROCESS OF MANUFACTURE OR PRODUCTION (Drawback under § 1313(d) is not allowable except where a manufacture or production exists. “Manufacture or production” is defined, for drawback purposes, in § 190.2. In order to obtain drawback under § 1313(d), it is essential for the applicant to show use in manufacture or production by providing a thorough description of the manufacturing process. Describe how the tax-paid material is processed into the export article.) WASTE (Many processes result in residue materials which, for drawback purposes, are treated as wastes. Describe any residue materials which you believe should be so treated. If no waste results, include a statement to that effect.) (If waste occurs, state: (1) Whether or not it is recovered, (2) whether or not it is valueless, and (3) what you do with it. This information is required whether claims are made on a “used in” or “appearing in” basis and regardless of the amount of waste incurred.) (Irrecoverable wastes are those consisting of materials which are lost in the process. Valueless wastes are those which may be recovered, but have no value. These irrecoverable and valueless wastes do not reduce the drawback claim provided the claim is based on the quantity of domestic tax-paid alcohol used in manufacturing. If the claim is based upon the quantity of domestic tax-paid alcohol appearing in the exported article, irrecoverable and valueless waste will cause a reduction in the amount of drawback.) (Valuable wastes are those recovered wastes which have a value either for sale or for use in a different manufacturing process. However, it should be noted that this standard applies to the entire industry and is not a selection on your part. An option by you not to choose to sell or use the waste in some different operation, does not make it valueless if another manufacturer can use the waste. State what you do with the waste. If you have to pay someone to get rid of it, or if you have buyers for the waste, you must state so in your application regardless of what basis you are using.) (If you recover valuable waste and if you choose to claim on the basis of the quantity of domestic tax-paid alcohol used in producing the exported articles (less any valuable waste), state that you will keep records to establish the quantity and value of the waste recovered. See STOCK IN PROCESS (Some processes result in another type of residual material, namely, stock in process, which affects the allowance of drawback. Stock in process may exist when residual material resulting from a manufacturing or processing operation is reintroduced into a subsequent manufacturing or processing operation; e.g., trim pieces from a cast article. The effect of stock in process on a drawback claim is that the amount of drawback for the period in which the stock in process was withdrawn from the manufacturing or processing operation (or the manufactured article, if manufacturing or processing periods are not used) is reduced by the quantity of merchandise or drawback products used to produce the stock in process if the “used in” or “used in less valuable waste” methods are used (if the “appearing in” method is used, there will be no effect on the amount of drawback), and the quantity of merchandise or drawback products used to produce the stock in process is added to the merchandise or drawback products used in the subsequent manufacturing or production period (or the subsequently produced article)). (If stock in process occurs and claims are to be based on stock in process, the application must include a statement to that effect. The application must also include a statement that the domestic tax-paid alcohol is considered to be used in manufacture at the time it was originally processed, so that the stock in process will not be included twice in the computation of the domestic tax-paid alcohol used to manufacture the finished articles on which drawback is claimed.) LOSS OR GAIN (Separate and distinct from WASTE) (Some manufacturing processes result in an intangible loss or gain of the net weight or measurement of the merchandise used. This loss or gain is caused by atmospheric conditions, chemical reactions, or other factors. If applicable, state the approximate usual percentage or quantity of such loss or gain. Note that percentage values will be considered to be measured “by weight” unless otherwise specified. Loss or gain does not occur during all manufacturing processes. If loss or gain does not apply to your manufacturing process, state “Not Applicable.”) PROCEDURES AND RECORDS MAINTAINED We will maintain records to establish: 1. That the exported articles on which drawback is claimed were produced with the use of a particular lot (or lots) of domestic tax-paid alcohol, and 2. The quantity of domestic tax-paid alcohol 1 1 We realize that to obtain drawback the claimant must establish that the completed articles were exported within 5 years after the tax has been paid on the domestic alcohol. Our records establishing our compliance with these requirements will be available for audit by CBP during business hours. We understand that drawback is not payable without proof of compliance. INVENTORY PROCEDURES (Describe your inventory records and state how those records will meet the drawback recordkeeping requirements set forth in 19 U.S.C. 1313(d) and part 190 of the CBP Regulations as discussed under the heading PROCEDURES AND RECORDS MAINTAINED. To help ensure compliance the following areas should be included in your discussion:) RECEIPT AND RAW STOCK STORAGE RECORDS MANUFACTURING RECORDS FINISHED STOCK STORAGE RECORDS BASIS OF CLAIM FOR DRAWBACK (There are three different bases that may be used to claim drawback: (1) Used in; (2) appearing in; and (3) used in less valuable waste.) (The “used in” basis may be employed only if there is either no waste or valueless or unrecovered waste in the operation. Irrecoverable or valueless waste does not reduce the amount of drawback when claims are based on the “used in” basis. Drawback is payable in the amount of 100% of the tax paid on the quantity of domestic alcohol used in the manufacture of flavoring extracts and medicinal or toilet preparation (including perfumery).) (For example, if 100 gallons of alcohol, valued at $1.00 per gallon, were used in manufacture resulting in 10 gallons of irrecoverable or valueless waste, the 10 gallons of irrecoverable or valueless waste would not reduce the drawback. In this case drawback would be payable on 100% of the tax paid on the 100 gallons of domestic alcohol used to produce the exported articles.) The “appearing in” basis may be used regardless of whether there is waste. If the “appearing in” basis is used, the claimant does not need to keep records of waste and its value. However, the manufacturer must establish the identity and quantity of the merchandise appearing in the exported product and provide this information. Waste reduces the amount of drawback when claims are made on the “appearing in” basis. Drawback is payable on 100% of the tax paid on the quantity of domestic alcohol which appears in the exported articles. (Based on the previous example, drawback would be payable on the 90 gallons of domestic alcohol which actually went into the exported product (appearing in) rather than the 100 gallons used in as set forth previously.) (The “used in less valuable waste” basis may be employed when the manufacturer recovers valuable waste, and keeps records of the quantity and value of waste from each lot of domestic tax-paid alcohol. The value of the waste reduces the amount of drawback when claims are based on the “used in less valuable waste” basis. When valuable waste is incurred, the drawback allowance on the exported article is based on the quantity of tax-paid alcohol used to manufacture the exported articles, as reduced by the quantity of such alcohol which the value of the waste would replace.) (Based on the previous examples, if the 10 gallons of waste had a value of $.50 per gallon, then the 10 gallons of waste, having a total value of $5.00, would be equivalent in value to 5 gallons of the tax-paid alcohol. Thus the value of the waste would replace 5 gallons of the alcohol used, and drawback is payable on 100% of the tax paid on 95 gallons of alcohol rather than on the 100 gallons “used in” or the 90 gallons “appearing in” as set forth in the above examples.) (Two methods exist for the manufacturer to show the quantity of material used or appearing in the exported article: (1) Schedule or (2) Abstract.) (A “schedule” shows the quantity of material used in producing each unit of product. The schedule method is usually employed when a standard line of merchandise is being produced according to fixed formulas. Some schedules will show the quantity of merchandise used to manufacture or produce each article and others will show the quantity appearing in each finished article. Schedules may be prepared to show the quantity of merchandise either on the basis of percentages or by actual weights and measurements. A schedule determines the amount that will be needed to produce a unit of product before the material is actually used in production.) (An “abstract” is the summary of the records which shows the total quantity used in producing all products during the period covered by the abstract. The abstract looks at a period of time, for instance 3 months, in which the quantity of material has been used. An abstract looks back at how much material was actually used after a production period has been completed.) (An applicant who fails to indicate the “schedule” choice must base its claims on the “abstract” method. State which Basis and Method you will use. An example of Used In by schedule follows:) We will claim drawback on the quantity of (specify material) used in manufacturing (exported article) according to the schedule set forth below. (Section 190.8(f) of the CBP Regulations requires submission of the schedule with the application for a specific manufacturing drawback ruling. An applicant who desires to file supplemental schedules with the drawback office whenever there is a change in the quantity or material used should state:) We request permission to file supplemental schedules with the drawback office covering changes in the quantities of material used to produce the exported articles, or different styles or capacities of containers of such exported merchandise. (Neither the “appearing in” basis nor the “schedule” method for claiming drawback may be used where the relative value procedure is required.) AGREEMENTS The Applicant specifically agrees that it will: 1. Operate in full conformance with the terms of this application for a specific manufacturing drawback ruling when claiming drawback; 2. Open its factory and records for examination at all reasonable hours by authorized Government officers; 3. Keep its drawback related records and supporting data for at least 3 years from the date of liquidation of any drawback claim predicated in whole or in part upon this application; 4. Keep this application current by reporting promptly to the drawback office which liquidates its claims any changes in the number or locations of its offices or factories, the corporate name, the persons who will sign drawback documents, the basis of claim used for calculating drawback, the decision to use or not to use an agent under § 190.9 or the identity of an agent under that section, the drawback office where claims will be filed under the ruling, or the corporate organization by succession or reincorporation; 5. Keep this application current by reporting promptly to CBP Headquarters, all other changes affecting information contained in this application; 6. Keep a copy of this application and the letter of approval by CBP Headquarters on file for ready reference by employees and require all officials and employees concerned to familiarize themselves with the provisions of this application and that letter of approval; and 7. Issue instructions to insure proper compliance with title 19, United States Code, section 1313, part 190 of the CBP Regulations and this application and letter of approval. DECLARATION OF OFFICIAL I declare that I have read this application for a specific manufacturing drawback ruling; that I know the averments and agreements contained herein are true and correct; and that my signature on this ____ day of ________ 20 ____, makes this application binding on (Name of Applicant Corporation, Partnership, or Sole Proprietorship) By 2 2 (Signature and Title) (Print Name) V. Format for Application for Specific Manufacturing Drawback Ruling Under 19 U.S.C. 1313(g). COMPANY LETTERHEAD (Optional) U.S. Customs and Border Protection, Entry Process and Duty Refunds Branch, Commercial and Trade Facilitation Division, Regulations and Rulings, Office of Trade, 90 K Street NE—10th Floor (Mail Stop 1177), Washington, DC 20229-1177. Dear Sir or Madam: We, (Applicant's Name), a (State, e.g., Delaware) corporation (or other described entity) submit this application for a specific manufacturing drawback ruling that our manufacturing operations qualify for drawback under title 19, United States Code, section 1313(g), and part 190 of the CBP Regulations. We request that CBP authorize drawback on the basis of this application. NAME AND ADDRESS AND IRS NUMBER (WITH SUFFIX) OF APPLICANT (Section 190.8(a) of the CBP Regulations provides that each manufacturer or producer of articles intended for exportation with the benefit of drawback must apply for a specific manufacturing drawback ruling, unless operating under a general manufacturing drawback ruling under § 190.7 of the CBP Regulations. CBP will not approve an application which shows an unincorporated division or company as the applicant ( see LOCATION OF FACTORY OR SHIPYARD (Provide the address of the factory(s) or shipyard(s) at which the construction and equipment will take place. Indicate if the factory or shipyard is a different legal entity from the applicant, and indicate if the applicant is operating under an Agent's general manufacturing drawback ruling.) PERSONS WHO WILL SIGN DRAWBACK DOCUMENTS (List persons legally authorized to bind the corporation who will sign drawback documents. Section 190.6 of the CBP Regulations permits only the president, vice president, secretary, treasurer, and any employee legally authorized to bind the corporation to sign for a corporation. In addition, a person within a business entity with a customs power of attorney for the company may sign. A customs power of attorney may also be given to a licensed customs broker. This heading should be changed to NAMES OF PARTNERS or PROPRIETOR in the case of a partnership or sole proprietorship, respectively ( see GENERAL STATEMENT (The following questions must be answered:) 1. Who will be the importer of the merchandise? (If the applicant will not always be the importer, specify that the applicant understands its obligations to maintain records to support the transfer under 19 CFR 190.10, and its liability under 19 CFR 190.63.) 2. Who is the manufacturer? (Is the applicant constructing and equipping for his own account or merely performing the operation on a toll basis for others?) (If an agent is to be used, the applicant must state it will comply with T.D.s 55027(2) and 55207(1), and § 190.9, as applicable, and that its agent will submit a letter of notification of intent to operate under the general manufacturing drawback ruling for agents ( see see 3. Will the applicant be the drawback claimant? (State how the vessel will qualify for drawback under 19 U.S.C. 1313(g). Who is the foreign person or government for whom the vessel is being made or equipped?) (There must be included under this heading the following statement: We are particularly aware of the terms of § 190.76(a)(1), and subpart M of part 190 of the CBP Regulations, and will comply with these sections where appropriate.) IMPORTED MERCHANDISE OR DRAWBACK PRODUCTS USED (Describe the imported merchandise or drawback products.) ARTICLES CONSTRUCTED AND EQUIPPED FOR EXPORT (Name the vessel or vessels to be made with imported merchandise or drawback products.) PROCESS OF CONSTRUCTION AND EQUIPMENT (Provide a clear and concise description of the process of construction and equipment involved. The description should trace the flow of materials through the manufacturing process for the purpose of establishing physical identification of the imported merchandise or drawback products and of the articles resulting from the processing.) WASTE (Many processes result in residue materials which, for drawback purposes, are treated as wastes. Describe any residue materials which you believe should be so treated. If no waste results, include a statement to that effect.) (If waste occurs, state: (1) Whether or not it is recovered, (2) whether or not it is valueless, and (3) what you do with it. This information is required whether claims are made on a “used in” or “appearing in” basis and regardless of the amount of waste incurred.) (Irrecoverable wastes are those consisting of materials which are lost in the process. Valueless wastes are those which may be recovered, but have no value. These irrecoverable and valueless wastes do not reduce the drawback claim provided the claim is based on the quantity of imported material used in manufacturing. If the claim is based upon the quantity of imported merchandise appearing in the exported article, irrecoverable and valueless waste will cause a reduction in the amount of drawback.) (Valuable wastes are those recovered wastes which have a value either for sale or for use in a different manufacturing process. However, it should be noted that this standard applies to the entire industry and is not a selection on your part. An option by you not to choose to sell or use the waste in some different operation does not make it valueless if another manufacturer can use the waste. State what you do with the waste. If you have to pay someone to get rid of it, or if you have buyers for the waste, you must state so in your application regardless of what basis you are using.) (If you recover valuable waste, and you choose to claim on the basis of the quantity of merchandise used in producing the exported articles (less any valuable waste), state that you will keep records to establish the quantity and value of the waste recovered. See LOSS OR GAIN (Separate and distinct from WASTE) (Some manufacturing processes result in an intangible loss or gain of the net weight or measurement of the merchandise used. This loss or gain is caused by atmospheric conditions, chemical reactions, or other factors. If applicable, state the approximate usual percentage or quantity of such loss or gain. Note that percentage values will be considered to be measured “by weight” unless otherwise specified. Loss or gain does not occur during all manufacturing processes. If loss or gain does not apply to your manufacturing process, state “Not Applicable.”) PROCEDURES AND RECORDS MAINTAINED We will maintain records to establish: 1. That the exported article on which drawback is claimed was constructed and equipped with the use of a particular lot (or lots) of imported material; and 2. The quantity of imported merchandise 1 1 We realize that to obtain drawback the claimant must establish that the completed articles were exported within 5 years after the importation of the imported merchandise. Our records establishing our compliance with these requirements will be available for audit by CBP during business hours. We understand that drawback is not payable without proof of compliance. INVENTORY PROCEDURES (Describe your inventory records and state how those records will meet the drawback recordkeeping requirements set forth in 19 U.S.C. 1313 and part 190 of the CBP Regulations as discussed under the heading “PROCEDURES AND RECORDS MAINTAINED”. To help ensure compliance the following should be included in your discussion:) RECEIPT AND RAW STOCK STORAGE RECORDS CONSTRUCTION AND EQUIPMENT RECORDS FINISHED STOCK STORAGE RECORDS SHIPPING RECORDS BASIS OF CLAIM FOR DRAWBACK (There are three different bases that may be used to claim drawback: (1) Used in; (2) appearing in; and (3) used in less valuable waste.) (The “used in” basis may be employed only if there is either no waste or valueless or unrecovered waste in the operation. Irrecoverable or valueless waste does not reduce the amount of drawback when claims are based on the “used in” basis. Drawback is payable in the amount of 99 percent of the duties, taxes, and fees, paid on the quantity of imported material used to construct and equip the exported article.) (For example, if 100 pounds of material, valued at $1.00 per pound, were used in manufacture resulting in 10 pounds of irrecoverable or valueless waste, the 10 pounds of irrecoverable or valueless waste would not reduce the drawback. In this case drawback would be payable on 99% of the duties, taxes, and fees, paid on the 100 pounds of imported material used in constructing and equipping the exported articles.) (The “appearing in” basis may be used regardless of whether there is waste. If the “appearing in” basis is used, the claimant does not need to keep records of waste and its value. However, the manufacturer must establish the identity and quantity of the merchandise appearing in the exported product and provide this information. Waste reduces the amount of drawback when claims are made on the “appearing in” basis. Drawback is payable on 99 percent of the duties, taxes, and fees, paid on the quantity of imported material which appears in the exported articles. “Appearing in” may not be used if multiple products are involved.) (Based on the previous example, drawback would be payable on the 90 pounds of imported material which actually went into the exported product (appearing in) rather than the 100 pounds used in as set forth previously.) (The “used in less valuable waste” basis may be employed when the manufacturer recovers valuable waste, and keeps records of the quantity and value of waste from each lot of merchandise. The value of the waste reduces the amount of drawback when claims are based on the “used in less valuable waste” basis. When valuable waste is incurred, the drawback allowance on the exported article is based on the duties, taxes, and fees, paid on the quantity of imported material used to construct and equip the exported product, as reduced by the quantity of such material which the value of the waste would replace. In such a case, drawback is claimed on the quantity of eligible material actually used to produce the exported product, less the amount of such material which the value of the waste would replace. Note section 190.26(c) of the CBP Regulations.) (Based on the previous examples, if the 10 pounds of waste had a value of $.50 per pound, then the 10 pounds of waste, having a total value of $5.00, would be equivalent in value to 5 pounds of the imported material. Thus the value of the waste would replace 5 pounds of the merchandise used, and drawback is payable on 99 percent of the duties, taxes, and fees, paid on the 95 pounds of imported material rather than on the 100 pounds “used in” or the 90 pounds “appearing in” as set forth in the above examples.) (Two methods exist for the manufacturer to show the quantity of material used or appearing in the exported article: (1) Schedule or (2) Abstract.) (A “schedule” shows the quantity of material used in producing each unit of product. The schedule method is usually employed when a standard line of merchandise is being produced according to fixed formulas. Some schedules will show the quantity of merchandise used to manufacture or produce each article and others will show the quantity appearing in each finished article. Schedules may be prepared to show the quantity of merchandise either on the basis of percentages or by actual weights and measurements. A schedule determines the amount of material that is needed to produce a unit of product before the material is actually used in production.) (An “abstract' is the summary of the records which shows the total quantity of merchandise used in producing all articles during the period covered by the abstract. The abstract looks at a period of time, for instance 3 months, in which the quantity of material has been used. An abstract looks back at how much material was actually used after a production period has been completed.) (An applicant who fails to indicate the “schedule” choice must base its claims on the “abstract' method. State which Basis and Method you will use. An example of Used In by Schedule would read:) We will claim drawback on the quantity of (specify material) used in manufacturing (exported article) according to the schedule set forth below. (Section 190.8(f) of the CBP Regulations requires submission of the schedule with the application for a specific manufacturing drawback ruling. An applicant who desires to file supplemental schedules with the drawback office whenever there is a change in the quantity or material used should state:) We request permission to file supplemental schedules with the drawback office covering changes in the quantities of material used to produce the exported articles, or different styles or capacities of containers of such exported merchandise. (Neither the “appearing in” basis nor the “schedule method for claiming drawback may be used where the relative value procedure is required.) AGREEMENTS The Applicant specifically agrees that it will: 1. Operate in full conformance with the terms of this application for a specific manufacturing drawback ruling when claiming drawback; 2. Open its factory and records for examination at all reasonable hours by authorized Government officers; 3. Keep its drawback related records and supporting data for at least 3 years from the date of liquidation of any drawback claim predicated in whole or in part upon this application; 4. Keep this application current by reporting promptly to the drawback office which liquidates its claims any changes in the number or locations of its offices or factories, the corporate name, the persons who will sign drawback documents, the basis of claim used for calculating drawback, the decision to use or not to use an agent under § 190.9 or the identity of an agent under that section, the drawback office where claims will be filed under the ruling, or the corporate organization by succession or reincorporation; 5. Keep this application current by reporting promptly to CBP Headquarters, all other changes affecting information contained in this application; 6. Keep a copy of this application and the letter of approval by CBP Headquarters on file for ready reference by employees and require all officials and employees concerned to familiarize themselves with the provisions of this application and that letter of approval; and 7. Issue instructions to help ensure proper compliance with title 19, United States Code, section 1313, part 190 of the CBP Regulations and this application and letter of approval. DECLARATION OF OFFICIAL I declare that I have read this application for a specific manufacturing drawback ruling; that I know the averments and agreements contained herein are true and correct; and that my signature on this ________ day of ________ 20 ____, makes this application binding on (Name of Applicant Corporation, Partnership, or Sole Proprietorship) By 2 (Signature and Title) 2