19 CFR Part 191 — Drawback

PART 191—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; § 191.84 also issued under 19 U.S.C. 1514; §§ 191.111, 191.112 also issued under 19 U.S.C. 1309; §§ 191.151(a)(1), 191.153, 191.157, 191.159 also issued under 19 U.S.C. 1557; §§ 191.182-191.186 also issued under 19 U.S.C. 81c; §§ 191.191-191.195 also issued under 19 U.S.C. 1593a. Source: T.D. 98-16, 63 FR 11006, Mar. 5, 1998, unless otherwise noted. § 191.0 Scope. This part sets forth general provisions applicable to drawback claims and specialized provisions applicable to specific types of drawback claims filed under 19 U.S.C. 1313, prior to the February 24, 2016, amendments to the U.S. drawback law. Drawback claims may not be filed under this part after February 23, 2019. For drawback claims filed under 19 U.S.C. 1313, as amended, see part 190. Additional drawback provisions relating to the North American Free Trade Agreement (NAFTA) are contained in subpart E of part 181 of this chapter. [USCBP-2018-0029, 83 FR 65064, Dec. 18, 2018] § 191.0a Claims filed under NAFTA. Claims for drawback filed under the provisions of part 181 of this chapter shall be filed separately from claims filed under the provisions of this part. Subpart A—General Provisions § 191.1 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 Department 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. [USCBP-2018-0029, 83 FR 65064, Dec. 18, 2018] § 191.2 Definitions. For the purposes of this part: (a) Abstract. Abstract (b) Act. Act, (c) Certificate of delivery. Certificate of delivery (1) The transfer from one party (transferor) to another (transferee) of: (i) Imported merchandise; (ii) Substituted merchandise under 19 U.S.C. 1313(j)(2); (iii) A qualified article under 19 U.S.C. 1313(p)(2)(A)(ii) from the manufacturer or producer to the exporter or under 1313(p)(2)(A)(iv) from the importer to the exporter; or (iv) Drawback product; (2) The identity of such merchandise or article as being that to which a potential right to drawback exists; and (3) The assignment of drawback rights for the merchandise or article transferred from the transferor to the transferee. (d) Certificate of manufacture and delivery. Certificate of manufacture and delivery (1) The transfer of an article manufactured or processed under 19 U.S.C. 1313(a) or 1313(b) from one party (transferor) to another (transferee); (2) The identity of such article as being that to which a potential right to drawback exists; and (3) The assignment of drawback rights for the article transferred from the transferor to the transferee. (e) Commercially interchangeable merchandise. Commercially interchangeable merchandise (f) Designated merchandise. Designated merchandise (g) Destruction. Destruction (h) Direct identification drawback. Direct identification drawback (i) Drawback. Drawback (j) Drawback claim. Drawback claim (k) Drawback entry. Drawback entry (l) Drawback product. drawback product (m) Exportation; exporter Exportation. Exportation (2) Exporter. Exporter (n) Filing. Filing (o) Fungible merchandise or articles. Fungible merchandise or articles (p) General manufacturing drawback ruling. general manufacturing drawback ruling (q) Manufacture or production. Manufacture or production (1) A process, including, but not limited to, an assembly, by which merchandise is made into a new and different article having a distinctive “name, character or use”; or (2) A process, including, but not limited to, an assembly, by which merchandise is made fit for a particular use even though it does not meet the requirements of paragraph (q)(1) of this section. (r) Multiple products. Multiple products (s) Possession. Possession, (t) Records. Records (u) Relative value. Relative value (v) Schedule. schedule (w) Specific manufacturing drawback ruling. specific manufacturing drawback ruling (x) Substituted merchandise or articles. Substituted merchandise or articles (1) Under § 1313(b), substituted merchandise must be of the same kind and quality as the imported designated merchandise or drawback product, that is, the imported designated merchandise or drawback products and the substituted merchandise must be capable of being used interchangeably in the manufacture or production of the exported or destroyed articles with no substantial change in the manufacturing or production process; (2) Under § 1313(j)(2), substituted merchandise must be commercially interchangeable with the imported designated merchandise; and (3) Under § 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 tariff classification. (y) Verification. Verification [T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 15288, Mar. 31, 1998, as amended by T.D. 01-18, 66 FR 9649, Feb. 9, 2001; CBP Dec. 15-14, 80 FR 61292, Oct. 13, 2015]] § 191.3 Duties, taxes, and fees subject or not subject to drawback. (a) Duties and fees subject to drawback include: (1) All 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 § 191.81(b) of this subpart; 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 § 191.81(c) of this part, 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 § 191.81 of this part 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 § 304(c), Tariff Act of 1930, as amended (19 U.S.C. 1304(c)); (3) Internal revenue taxes which attach upon importation (see § 101.1 of this chapter); (4) Merchandise processing fees (see § 24.23 of this chapter) for unused merchandise drawback pursuant to 19 U.S.C. 1313(j), and drawback for substitution of finished petroleum derivatives pursuant to 19 U.S.C. 1313(p)(2)(A)(iii) or (iv); and (5) Harbor maintenance taxes ( see (b) Duties and fees not subject to drawback include: (1) Harbor maintenance taxes ( see (2) Merchandise processing fees ( see (3) Antidumping and countervailing duties on merchandise entered, or withdrawn from warehouse, for consumption on or after August 23, 1988. (c) No drawback shall be allowed when the identified merchandise, the designated imported merchandise, or the substituted other 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). [T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 27489, May 19, 1998, as amended by T.D. 01-18, 66 FR 9649, Feb. 9, 2001; CBP Dec. 04-33, 69 FR 60083, Oct. 7, 2004; USCBP-2018-0029, 83 FR 65064, Dec. 18, 2018] § 191.4 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 § 191.82 of this part, 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. § 191.5 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. Drawback is not allowed, except on claims made under 19 U.S.C. 1313(j)(1), on articles shipped to the U.S. Virgin Islands, American Samoa, Wake Island, Midway Islands, Kingman Reef, Guam, Canton Island, Enderbury Island, Johnston Island, or Palmyra Island. Puerto Rico is not considered foreign territory for drawback purposes and, accordingly, drawback may not be permitted on articles shipped there from elsewhere in the customs territory of the United States. [USCBP-2018-0029, 83 FR 65064, Dec. 18, 2018] § 191.6 Authority to sign drawback documents. (a) Documents listed in paragraph (b) of this section shall be signed 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. (b) The following documents require execution in accordance with paragraph (a) of this section: (1) Drawback entries; (2) Certificates of delivery; (3) Certificates of manufacture and delivery; (4) Notices of Intent to Export, Destroy, or Return Merchandise for Purposes of Drawback; (5) Certifications of exporters on bills of lading or evidence of exportation (see §§ 191.28 and 191.82 of this part); and (6) Abstracts, schedules and extracts from monthly abstracts if not included as part of a drawback claim. (c) The following documents (see also part 177 of this chapter) may be executed by one of the persons described in paragraph (a) of this section or by any other individual legally authorized to bind the person (or entity) for whom the document is executed: (1) A letter of notification of intent to operate under a general manufacturing drawback ruling under § 191.7 of this part; (2) An application for a specific manufacturing drawback ruling under § 191.8 of this part; (3) A request for a nonbinding predetermination of commercial interchangeability under § 191.32(c) of this part; (4) An application for waiver of prior notice under § 191.91 of this part; (5) An application for approval of accelerated payment of drawback under § 191.92 of this part; and (6) An application for certification in the Drawback Compliance Program under § 191.193 of this part. [T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 15288, Mar. 31, 1998; 63 FR 27489, May 19, 1998] § 191.7 General manufacturing drawback ruling. (a) Purpose; eligibility. (b) Procedures Publication. (2) Submission Where filed. (ii) Copies. (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 § 191.6(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. 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; (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 is followed without variation; and (iv) The described manufacturing or production process is a manufacture or production under § 191.2(q) of this subpart. (2) Computer-generated number. (3) Non-conforming letters of notification of intent. (d) Duration. § 191.8 Specific manufacturing drawback ruling. (a) Applicant. (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 are 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 § 191.6(a)(1) through (6) who will sign drawback documents; (6) Description of the imported merchandise including specifications; (7) Description of the exported article; (8) Basis of claim for calculating manufacturing drawback; (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. (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 § 191.9 of this chapter, 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 paragraph (g)(2)(iii) of this section); or (H) Any combination of the foregoing changes. (ii) A limited modification, as provided for in this paragraph, shall 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 shall file with the drawback office(s) where claims are filed (with a copy to CBP Headquarters, Attention, Entry Process and Duty Refunds Branch, Regulations and Rulings, Office of International Trade) a letter stating the modifications to be made. The drawback office shall promptly acknowledge, in writing, acceptance of the limited modifications, with a copy to CBP Headquarters, Attention, Entry Process and Duty Refunds Branch, Regulations and Rulings, Office of International Trade. (iii) To effect a change in the drawback office where claims will be filed, the manufacturer or producer shall file with the new 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 shall provide a copy of the written application to file claims at the new drawback office to the drawback office where claims are currently filed. (h) Duration. (1) No drawback claim or certificate of manufacture and delivery 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 Customs Headquarters. [T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 15288, Mar. 31, 1998] § 191.9 Agency. (a) General. (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. (d) Certificate; Drawback entry; Certificate of manufacture and delivery Contents of certificate; when filing not required. (i) Quantity, kind and quality 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 and description of merchandise appearing in or used in manufacturing or production operations performed by the agent; (v) Total quantity and description of articles produced in manufacturing or production operations performed by the agent; (vi) Quantity, kind and quality 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. § 191.10 Certificate of delivery. (a) Purpose; when required. (1) Documents the transfer of that merchandise or article; (2) Identifies such merchandise or article as being that to which a potential right to drawback exists; and (3) Assigns such right to the transferee (see § 191.82 of this part). (b) Required information. (1) The party to whom the merchandise or articles are delivered; (2) Date of delivery; (3) Import entry number; (4) Quantity delivered; (5) Total duty paid on, or attributable to, the delivered merchandise; (6) Date certificate was issued; (7) Date of importation; (8) Port where import entry filed; (9) Person from whom received; (10) Description of the merchandise delivered; (11) The HTSUS number with a minimum of 6 digits, for the designated imported merchandise (such HTSUS number shall be from the entry summary and other entry documentation for the merchandise unless the issuer of the certificate of delivery received the merchandise under another certificate of delivery, or a certificate of manufacture and delivery, in which case such HTSUS number shall be from the other certificate); and (12) If the merchandise transferred is substituted for the designated imported merchandise under 19 U.S.C. 1313(j)(2), the HTSUS or Schedule B commodity number, with a minimum of 6 digits. (c) Intermediate transfer Imported merchandise. (2) Manufactured article. (d) Retention period; supporting records. (e) Retention; submission to Customs. (f) Warehouse transfer and withdrawals. § 191.11 Tradeoff. (a) Exchanged merchandise. (b) Requirements. (c) Application. [T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 15288, Mar. 31, 1998] § 191.12 Claim filed under incorrect provision. A drawback claim filed pursuant to any provision of § 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 or by protest. [T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 15288, Mar. 31, 1998] § 191.13 Packaging materials. (a) Imported packaging material. (b) Packaging material manufactured in United States from imported materials. [T.D. 98-16, 63 FR 11006, Mar. 5, 1998, as amended by T.D. 02-16, 67 FR 16637, Apr. 8, 2002] § 191.14 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 (see § 191.2(o) of this part); (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 Customs (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 Customs (see § 191.61 of this part). If Customs requests such verification, the person using the identification method must be able to demonstrate how, under generally accepted accounting procedures, the records which support the identification method used account for all merchandise or articles in, and all receipts into and withdrawals from, the inventory, and the drawback per unit for each receipt and withdrawal; and (5) Any accounting method which is used by a person for drawback purposes under this section must be used without variation with other methods for a period of at least one year, unless approval is given by Customs 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 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). 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 imported designated merchandise and other (substituted) merchandise (see 19 U.S.C. 1313(b)); or (ii) The fact and date(s) of manufacture or production of the finished articles (see 19 U.S.C. 1313(a) and (b)). (d) Approval of other accounting methods. (2) In order for a proposed accounting method to be approved by Customs for purposes of this section, it shall 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 both Customs and the person proposing the method. [T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 15288, Mar. 31, 1998; 63 FR 27489, May 19, 1998] § 191.15 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 shall be retained for 3 years after payment 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 § 191.21 Direct identification drawback. Section 313(a) of the Act, as amended (19 U.S.C. 1313(a)), provides for drawback upon the exportation, or destruction under Customs supervision, of articles which are not used in the United States prior to their exportation or destruction, and which are manufactured or produced in the United States wholly or in part with the use of particular imported, duty-paid merchandise and/or drawback product(s). Where two or more products result, drawback shall be distributed among the products in accordance with their relative value (see § 191.2(u)) 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 § 191.14 of this part. § 191.22 Substitution drawback. (a) General. (b) Use by same manufacturer or producer at different factory. (c) Designation. (d) Designation by successor; 19 U.S.C. 1313(s) 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, provided that the value of the transferred assets and interests (realty, personalty, and intangibles, exclusive of the drawback rights) exceeds the value of such drawback rights, whether vested or contingent. (3) Certifications and required evidence Records of predecessor. (ii) Merchandise not otherwise designated. (iii) Value of transferred property. (iv) Review by Customs. (e) Multiple products General. (2) Claims covering a manufacturing period. (3) Recordkeeping. [T.D. 98-16, 63 FR 11006, Mar. 5, 1998, as amended by USCBP-2018-0029, 83 FR 65064, Dec. 18, 2018] § 191.23 Methods of claiming drawback. (a) Used in. (b) Appearing in. (c) Used in less valuable waste. (d) Abstract or schedule. (e) Recordkeeping Valuable waste. (2) If claim for waste is waived. [T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 15288, Mar. 31, 1998] § 191.24 Certificate of manufacture and delivery. (a) When required. (b) Information required on certificate. (1) The person to whom the article or drawback product is delivered; (2) If the article or drawback product was manufactured or produced under a general manufacturing drawback ruling, the unique computer-generated number assigned to the letter of acknowledgment for that ruling, and if the article or drawback product was manufactured or produced under a specific manufacturing drawback ruling, either the unique computer number or the T.D. number for that ruling; (3) The quantity, kind and quality of imported, duty-paid merchandise or drawback product designated; (4) Import entry numbers, HTSUS number for the imported merchandise to at least the 6th digit (such HTSUS number shall be from the entry summary and other entry documentation for the imported, duty-paid merchandise unless the issuer of the certificate of manufacture and delivery received the merchandise under another certificate (either of delivery or of manufacture and delivery), in which case such HTSUS number shall be from the other certificate), and applicable duty amounts; (5) Date received at factory; (6) Date used in manufacture; (7) Value at factory, if applicable; (8) Quantity of waste, if any, if applicable; (9) Market value of any waste, if applicable; (10) Total quantity and description of merchandise appearing in or used; (11) Total quantity and description of articles produced; (12) Date of manufacture or production of the articles; (13) The quantity of articles transferred; and (14) The person from whom the article or drawback product is delivered. (c) Filing of certificate. (d) Effect of certificate. § 191.25 Destruction under Customs supervision. A claimant may destroy merchandise and obtain manufacturing drawback by complying with the procedures set forth in § 191.71 of this part relating to destruction. § 191.26 Recordkeeping for manufacturing drawback. (a) Direct identification manufacturing Records required. (i) The date or inclusive dates of manufacture or production; (ii) The quantity and identity of the imported duty-paid merchandise or drawback products used in or appearing in (see § 191.23) the articles manufactured or produced; (iii) The quantity, if any, of the nondrawback 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 finished 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 completed articles were commingled after manufacture, their identity may be maintained in the manner prescribed in § 191.14 of this part.) (2) Accounting. (i) To determine, and the Customs official to verify, the applicable import entry, certificate of delivery, and/or certificate of manufacture and delivery associated with the claim; and (ii) To identify with respect to that import entry, certificate of delivery, and/or certificate of manufacture and delivery, the imported duty-paid merchandise or drawback products used in manufacture or production. (b) Substitution manufacturing. (1) The quantity, identity, and specifications of the merchandise designated (imported duty-paid, or drawback product); (2) The quantity, identity, and specifications of merchandise of the same kind and quality as the designated merchandise before its use to manufacture or produce (or appearing in) the exported or destroyed articles; (3) That, within 3 years after receiving the designated merchandise at its plant, the manufacturer or producer used it in manufacturing or production and that during the same 3-year period it manufactured or produced the exported or destroyed articles; and (4) If the designated merchandise is a chemical element that was contained in imported material that was subject to an ad valorem (i) The duty 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 Harmonized Tariff Schedule of the United States (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 chemical element must be deducted from the duty paid on the imported material that may be claimed on any other drawback claim. Example to paragraph (b)(4): Synthetic rutile that is shown by appropriate analysis in the entry papers to be 91.7% pure titanium dioxide is imported and dutiable at a 5% ad valorem (c) Valuable waste records. (d) Purchase of manufactured articles for exportation. (e) Multiple claimants General. (2) Procedures Submission of letter. (ii) Blanket waivers and assignments of drawback rights. (iii) Use of export summary procedure. (f) Retention of records. [T.D. 98-16, 63 FR 11006, Mar. 5, 1998, as amended by T.D. 02-38, 67 FR 48370, July 24, 2002; CBP Dec. 03-23, 68 FR 50703, Aug. 22, 2003] § 191.27 Time limitations. (a) Direct identification manufacturing. (b) Substitution manufacturing. (1) The designated merchandise is used in manufacture or production within 3 years after receipt by the manufacturer or producer at its factory; (2) Within the 3-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 Customs 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. § 191.28 Person entitled to claim drawback. The exporter (or destroyer) shall 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 shall also affirm that the exporter (or destroyer) has not 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 (destroyer). Subpart C—Unused Merchandise Drawback § 191.31 Direct identification. (a) General. (b) Time of exportation or destruction. (c) Operations performed on imported merchandise. [T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 15288, Mar. 31, 1998] § 191.32 Substitution drawback. (a) General. (b) Requirements. (2) The substituted merchandise must be commercially interchangeable with the imported merchandise that is designated for drawback; (3) The substituted merchandise exported or destroyed must not have been used in the United States before its exportation or destruction (see paragraph (e) of this section); and (4) For purposes of drawback of internal revenue tax imposed under Chapters 32, 38 (with the exception of Subchapter A of Chapter 38), 51, and 52 of the Internal Revenue Code of 1986, as amended (IRC), drawback granted on the export or destruction of substituted merchandise will be limited to the amount of taxes paid (and not returned by refund, credit, or drawback) on the substituted merchandise. (c) Determination of commercial interchangeability. (1) A formal ruling from the Entry Process and Duty Refunds Branch, Regulations and Rulings, Office of International Trade; or (2) A submission of all the required documentation necessary to make a commercial interchangeability determination with each individual drawback claim filed. (d) Time limitations. (1) The claimant must have had possession of the exported or destroyed merchandise at some time during the 3-year period following the date of importation of the imported designated merchandise; and (2) The merchandise to be exported or destroyed to qualify for drawback must be exported, or destroyed under Customs supervision, before the close of the 3-year period beginning on the date of importation of the imported designated merchandise. (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 commercially interchangeable merchandise which was transferred to the predecessor and for which the predecessor received, before the date of succession, a certificate of delivery 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, provided that the value of the transferred assets and interests (realty, personality, and intangibles, exclusive of the drawback rights) exceeds the value of such drawback rights, whether vested or contingent. (3) Certifications and required evidence Records of predecessor. (ii) Merchandise not otherwise designated. (iii) Value of transferred property. (iv) Review by Customs. [T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 15288, Mar. 31, 1998, as amended by USCBP-2018-0029, 83 FR 65064, Dec. 18, 2018] § 191.33 Person entitled to claim 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 shall secure and retain a certification signed by the exporter or destroyer that such party waived the right to claim drawback, and did not and will not authorize any other party to claim the exportation or destruction for drawback (see § 191.82 of this part). The certification provided for under this section may be a blanket certification for a stated period. The claimant shall file such certification at the time of, or prior to, the filing of the claim(s) covered by the certification. (b) Substitution. (i) In situations where the exporter or destroyer of the substituted merchandise is also the importer of the imported merchandise, that party shall be entitled to claim drawback. (ii) In situations where the exporter or destroyer receives from the person who imported and paid the duty on the imported merchandise a certificate of delivery documenting the transfer of imported merchandise, commercially interchangeable merchandise, or any combination of imported and commercially interchangeable merchandise, and exports or destroys such transferred merchandise, that exporter or destroyer shall be entitled to claim drawback. (Any such transferred merchandise, regardless of its origin, will be treated as imported merchandise for purposes of drawback under § 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) shall be documented by certificate(s) of delivery, and the exporter or destroyer shall 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 shall secure and retain a certification signed by the exporter or destroyer that such party waived the right to claim drawback, and did not and will not authorize any other party to claim the exportation or destruction for drawback (see § 191.82 of this part). The certification provided for under this section may be a blanket certification for a stated period. The claimant shall file such certification at the time of, or prior to, the filing of the claim(s) covered by the certification. § 191.34 Certificate of delivery required. (a) Direct identification; purpose; when required. (1) Completion. (2) Retention; submission to Customs. (b) Substitution. (c) Warehouse transfer and withdrawals. § 191.35 Notice of intent to export; examination of merchandise. (a) Notice. (b) Required Information. (c) Decision to examine or to waive examination. (d) Time and place of examination. (e) Extent of examination. § 191.36 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 Internal Revenue Service (IRS) number(s) (with suffix) 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; (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 to be covered in this application; and (J) The relationship between the parties involved in the import and export transactions; (ii) Written declarations regarding: (A) The reason(s) that Customs was not notified of the intent to export; and (B) Whether the applicant, to the best of its knowledge, will have future exportations on which unused merchandise drawback might be claimed; and (iii) A certification that the following documentary evidence will be made available for Customs 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 merchandise was not used in the United States and was commercially interchangeable 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) Customs action. 1 3 (1) Information provided by the claimant in the written application; (2) Any of the information listed in paragraph (a)(1)(iii)(A)( 1 3 (3) The applicant's prior record with Customs. (c) Time for Customs action. (d) Appeal of denial of application. (e) Future intent to export unused merchandise. § 191.37 Destruction under Customs supervision. A claimant may destroy merchandise and obtain unused merchandise drawback by complying with the procedures set forth in § 191.71 of this part relating to destruction. § 191.38 Records. (a) Maintained by claimant; by others. (b) Accounting for the merchandise. (1) To determine, and Customs to verify, the applicable import entry or certificate of delivery; (2) To determine, and Customs to verify, the applicable exportation or destruction; and (3) To identify with respect to the import entry or certificate of delivery, the imported duty-paid merchandise. Subpart D—Rejected Merchandise § 191.41 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 Customs 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. The claimant must show by evidence satisfactory to Customs that the exported or destroyed merchandise was defective at the time of importation, or was not in accordance with sample or specifications, or was shipped without the consent of the consignee (see subpart P for drawback of internal-revenue taxes for unmerchantable or nonconforming distilled spirits, wines, or beer). § 191.42 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. (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 [USCBP-2018-0029, 83 FR 65064, Dec. 18, 2018] § 191.43 Unused merchandise 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. § 191.44 Destruction under Customs supervision. A claimant may destroy merchandise and obtain rejected merchandise drawback by complying with the procedures set forth in § 191.71 of this part relating to destruction. § 191.45 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) of this section 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. [USCBP-2018-0029, 83 FR 65065, Dec. 18, 2018] Subpart E—Completion of Drawback Claims § 191.51 Completion of drawback claims. (a) General Complete claim. (2) Certificates. (3) Limitation on eligibility for imported merchandise. (b) Drawback due Claimant required to calculate drawback. (2) Merchandise processing fee apportionment calculation. (i) Relative value ratio for each line item. (ii) Merchandise processing fee apportioned to each line item. (iii) Amount of merchandise processing fee eligible for drawback per line item. (iv) Amount of merchandise processing fee eligible for drawback per unit of merchandise. 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, as per 19 U.S.C. 58c(a)(9)(B)(i), is applicable) 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). (c) HTSUS number(s) or Schedule B commodity number(s) of imports and exports General. (2) Imports. (3) Exports. (4) 6-digit level for HTSUS and Schedule B commodity numbers. (5) Effective date. (d) Place of filing. (e) Time of filing General. (2) Major disaster. (i) The claimant establishes to the satisfaction of Customs 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 Customs within 1 year from the last day of the 3-year period referred to in paragraph (e)(1) of this section. (3) Record retention. [T.D. 98-16, 63 FR 11006, Mar. 5, 1998, as amended by T.D. 01-14, 66 FR 8767, Feb. 2, 2001; T.D. 01-18, 66 FR 9649, Feb. 9, 2001; T.D. 02-39, 67 FR 48548, July 25, 2002; CBP Dec. 04-33, 69 FR 60083, Oct. 7, 2004; CBP Dec. 17-06, 82 FR 32239, July 13, 2017; USCBP-2018-0029, 83 FR 65065, Dec. 18, 2018] § 191.52 Rejecting, perfecting or amending claims. (a) Rejecting the claim. (b) Perfecting the claim; additional evidence required. (1) The export bill of lading or other actual evidence of exportation, as provided for in § 191.72(a) of this part, which shall show that the articles were shipped by the person filing the drawback entry, or a letter of endorsement from the party in whose name the articles were shipped which shall be attached to such bill of lading, showing that the party filing the entry is authorized to claim drawback and receive payment (the claimant shall have on file and make available to Customs 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) Certificate(s) of delivery upon which the claim is based (see § 191.10(e) of this part). (c) Amending the claim; supplemental filing. § 191.53 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 § 191.61 Verification of drawback claims. (a) Authority Drawback office. (2) Two or more locations. (b) Method. (c) Liquidation. (d) Errors in specific or general manufacturing drawback rulings Specific manufacturing drawback ruling; action by port director. (2) General manufacturing drawback ruling. (3) Action by CBP Headquarters. [T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 15288, Mar. 31, 1998] § 191.62 Penalties. (a) Criminal penalty. (b) Civil penalty. Subpart G—Exportation and Destruction § 191.71 Drawback on articles destroyed under Customs supervision. (a) Procedure. (b) Evidence of destruction. i.e., (c) Completion of drawback entry. § 191.72 Exportation procedures. Exportation of articles for drawback purposes must be established by complying with one of the procedures provided for in this section (in addition to providing prior notice of intent to export if applicable (see §§ 191.35, 191.36, 191.42, and 191.91 of this part)). Supporting documentary evidence must establish fully the date and fact of exportation and the identity of the exporter. The procedures for establishing exportation outlined by this section include, but are not limited to: (a) 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;”. (b) Export summary (§ 191.73); (c) Official postal records (originals or copies) which evidence exportation by mail (§ 191.74); (d) Notice of lading for supplies on certain vessels or aircraft (§ 191.112); or (e) Notice of transfer for articles manufactured or produced in the U.S. which are transferred to a foreign trade zone (§ 191.183). [T.D. 98-16, 63 FR 11006, Mar. 5, 1998, as amended by CBP Dec. 15-11, 80 FR 47407, Aug. 7, 2015] § 191.73 Export summary procedure. (a) General. (b) Format of Chronological Summary of Exports. Chronological Summary of Exports Drawback entry No. ________. Claimant ________; Exporter ________ (if different from claimant) Period from ________ to ________. Date of export Exporter if not claimant Unique export identifier 1 Description Net quantity Sched. B com. # or HTSUS # Destination (1) (2) (3) (4) (5) (6) (7) 1 (c) Documentary evidence Records. (2) Maintenance of records. [T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 15289, Mar. 31, 1998] § 191.74 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 shall be sufficient to prove exportation. The postal record shall be identified on the drawback entry, and shall be retained by the claimant and submitted as part of the drawback claim (see § 191.51(a)). [T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 15289, Mar. 31, 1998, as amended by CBP Dec. 15-11, 80 FR 47407, Aug. 7, 2015] § 191.75 Exportation by the Government. (a) Claim by U.S. Government. (b) Claim by supplier. § 191.76 Landing certificate. (a) Requirement. (b) Written notice of requirement and time for filing. (c) Signature. (d) Inability to produce landing certificates. Subpart H—Liquidation and Protest of Drawback Entries § 191.81 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 (iii) Applicability. (f) Relative value; multiple products Distribution. (2) Values. (g) Payment. [USCBP-2018-0029, 83 FR 65065, Dec. 18, 2018]] § 191.82 Person entitled to claim drawback. Unless otherwise provided in this part (see §§ 191.42(b), 191.162, 191.175(a), 191.186), the exporter (or destroyer) shall be entitled to claim drawback, unless the exporter (or destroyer), by means of a certification, waives the right to claim drawback and assigns such right to the manufacturer, producer, importer, or intermediate party (in the case of drawback under 19 U.S.C. 1313(j)(1) and (2), see § 191.33(a) and (b)). Such certification shall also affirm that the exporter (or destroyer) has not and will not assign the right to claim drawback on the particular exportation or destruction to any other party. The certification provided for in this section may be a blanket certification for a stated period. § 191.83 Person entitled to receive payment. Drawback is paid to the claimant (see § 191.82). § 191.84 Protests. Procedures to protest the denial, in whole or in part, of a drawback entry shall be in accordance with part 174 of this chapter (19 CFR part 174). Subpart I—Waiver of Prior Notice of Intent To Export; Accelerated Payment of Drawback § 191.91 Waiver of prior notice of intent to export. (a) General Scope. (2) Effective date for claimants with existing approval. (3) Limited successorship for waiver of prior notice. (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) (if more than 3 exporters, such information is required only for the 3 most frequently used exporters), if applicant is not the exporter; (C) Export period covered by this application; (D) Commodity/product lines of imported and exported merchandise covered by this application; (E) Origin of merchandise covered by this application; (F) Estimated number of export transactions during the next calendar year covered by this application; (G) Port(s) of exportation 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; and (I) The relationship between the parties involved in the import and export transactions; (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 § 191.36, and whether such request was approved or denied; and (iii) A certification that the following documentary evidence will be made available for Customs 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 merchandise was not used in the United States and was commercially interchangeable with the imported merchandise (for purposes of drawback under 19 U.S.C. 1313(j)(2)), and, as applicable: ( 1 ( 2 ( 3 (B) Any other evidence establishing compliance with other applicable drawback requirements, upon Customs request under paragraph (b)(2)(iii) of this section. (3) Samples of records to accompany application. 1 3 (c) Action on application Customs review. 1 3 (i) The presence or absence of unresolved Customs charges (duties, taxes, or other debts owed Customs); (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 Customs for examination after Customs had timely notified the party filing a Notice of Intent to Export, Destroy, or Return Merchandise for Purposes of Drawback of Customs intent to examine the merchandise (see § 191.35 of this part). (2) Approval. (3) Denial. (d) Stay. (e) Proposed revocation. (f) Action by drawback office controlling. (g) Appeal of denial or challenge to proposed revocation. [T.D. 98-16, 63 FR 11006, Mar. 5, 1998, as amended by CBP Dec. 15-14, 80 FR 61292, Oct. 13, 2015] § 191.92 Accelerated payment. (a) General Scope. (2) Effective date for claimants with existing approval. (3) Limited successorship for approval of accelerated payment. (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 paragraph (d) of this section), including: (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) Type(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 record-keeping 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, 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 Customs 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 Customs is notified of any modifications from the procedures described in this application. (c) Sample application. (d) Bond required. (e) Action on application Customs review. (i) The presence or absence of unresolved Customs charges (duties, taxes, or other debts owed Customs); (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. [T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 27489, May 19, 1998] § 191.93 Combined applications. An applicant for the procedures provided for in §§ 191.91 and 191.92 of this subpart may apply for only one procedure, both procedures separately, or both procedures in one application package (see also § 191.195 of this part regarding combined applications for certification in the drawback compliance program and waiver of prior notice and/or approval of accelerated payment of drawback). In the latter instance, the intent to apply for both procedures must be clearly stated. In all instances, all of the requirements for the procedure(s) applied for must be met (for example, in a combined application for both procedures, all of the information required for each procedure, all required sample documents for each procedure, and all required certifications must be included in and with the application). Subpart J—Internal Revenue Tax on Flavoring Extracts and Medicinal or Toilet Preparations (Including Perfumery) Manufactured From Domestic Tax-Paid Alcohol § 191.101 Drawback allowance. (a) Drawback. (b) Shipment to Puerto Rico, the Virgin Islands, Guam, and American Samoa. § 191.102 Procedure. (a) General. (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. § 191.103 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) CBP office where the claim will be filed. (3) Verification of the statement. [USCBP-2018-0029, 83 FR 65066, Dec. 18, 2018]] § 191.104 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) CBP drawback office where the drawback claim will be processed. (c) Extract of TTB certificate. [USCBP-2018-0029, 83 FR 65066, Dec. 18, 2018]] § 191.105 Liquidation. The drawback office shall ascertain the final amount of drawback due by reference to the certificate of manufacture and delivery and the specific manufacturing drawback ruling under which the drawback claimed is allowable. § 191.106 Amount of drawback. (a) Claim filed with TTB. (b) Claim not filed with TTB. (c) No deduction of 1 percent. (d) Payment. [USCBP-2018-0029, 83 FR 65067, Dec. 18, 2018] Subpart K—Supplies for Certain Vessels and Aircraft § 191.111 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. § 191.112 Procedure. (a) General. (b) Customs forms. (c) Time of filing 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) Assignment of numbers and return of one copy. (f) Declaration Requirement. (2) Procedure if notice filed before lading. (3) Procedure if notice filed after lading. (4) Filing. (g) Information concerning class or trade. (h) Vessel or aircraft not required to clear or obtain a permit to proceed. (i) Articles laden or installed on aircraft as equipment or used in the maintenance or repair of aircraft. (j) Fuel laden on vessels or aircraft as supplies Composite notice of lading. (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. (k) Desire to land articles covered by notice of lading. Subpart L—Meats Cured With Imported Salt § 191.121 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. § 191.122 Procedure. (a) General. (b) Customs form. § 191.123 Refund of duties. Drawback shall be refunded in aggregate amounts of not less than $100 and shall 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 Ownership and Account § 191.131 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. § 191.132 Procedure. Other provisions of this part relating to direct identification manufacturing drawback shall apply to claims for drawback filed under this subpart insofar as applicable to and not inconsistent with the provisions of this subpart. § 191.133 Explanation of terms. (a) Materials. (b) Foreign account and ownership. (c) Major conversion. Subpart N—Foreign-Built Jet Aircraft Engines Processed in the United States § 191.141 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. § 191.142 Procedure. Other provisions of this part shall apply to claims for drawback filed under this subpart insofar as applicable to and not inconsistent with the provisions of this subpart. § 191.143 Drawback entry. (a) Filing of entry. (b) Contents of entry. § 191.144 Refund of duties. Drawback shall be refunded in aggregate amounts of not less than $100, and shall not be subject to the deduction of 1 percent of duties paid. Subpart O—Merchandise Exported From Continuous Customs Custody § 191.151 Drawback allowance. (a) Eligibility of entered or withdrawn merchandise Under 19 U.S.C. 1557(a). (2) Under 19 U.S.C. 1313. (b) Guantanamo Bay. § 191.152 Merchandise released from Customs custody. No remission, refund, abatement, or drawback of duty shall 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 § 557(c) of the Act, as amended (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 Customs (see § 191.71), in which case any accrued duties shall be remitted or refunded and any condition in the bond that the articles shall be exported shall be deemed to have been satisfied (see 19 U.S.C. 1558). § 191.153 Continuous Customs 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. § 191.154 Filing the entry. (a) Direct export. (b) Merchandise transported to another port for exportation. § 191.155 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 shall be followed to the extent applicable. § 191.156 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. § 191.157 Landing certificates. When required, a landing certificate shall be filed within the time prescribed in § 191.76 of this part. § 191.158 Procedures. When the drawback claim has been completed and the bill of lading filed, together with the landing certificate, if required, 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 shall 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 shall be liquidated in accordance with the provisions of § 191.81 of this part. § 191.159 Amount of drawback. Drawback due under this subpart shall 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 § 191.161 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 Customs 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 Customs custody. § 191.162 Procedure. The export procedure shall be the same as that provided in § 191.42 except that the claimant must be the importer and as otherwise provided in this subpart. § 191.163 Documentation. (a) Entry. (b) Documentation. § 191.164 Return to Customs custody. There is no time limit for the return to Customs custody of distilled spirits, wine, or beer subject to refund of taxes under the provisions of this subpart. § 191.165 No exportation by mail. Merchandise covered by this subpart shall not be exported by mail. § 191.166 Destruction of merchandise. (a) Action by the importer. (b) Action by Customs. § 191.167 Liquidation. No deduction of 1 percent of the internal revenue taxes paid or determined shall be made in allowing entries under § 5062(c), Internal Revenue Code, as amended (26 U.S.C. 5062(c)). § 191.168 Time limit for exportation or destruction. Merchandise not exported or destroyed within 90 days from the date of notification of acceptance of the drawback entry shall be considered unclaimed, unless upon written request by the importer, prior to the expiration of the 90-day period, the drawback office grants an extension of not more than 90 days. Subpart Q—Substitution of Finished Petroleum Derivatives § 191.171 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) Merchandise processing fees. (d) Federal excise tax. [T.D. 98-16, 63 FR 11006, Mar. 5, 1998, as amended by T.D. 02-16, 67 FR 16637, Apr. 8, 2002; CBP Dec. 04-33, 69 FR 60083, Oct. 7, 2004; USCBP-2018-0029, 83 FR 65067, Dec. 18, 2018] § 191.172 Definitions. The following are definitions for purposes of this subpart only: (a) Qualified article. (b) Same kind and quality article. (c) Exported article. [T.D. 98-16, 63 FR 11006, Mar. 5, 1998, as amended by T.D. 02-16, 67 FR 16637, Apr. 8, 2002] § 191.173 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. [T.D. 98-16, 63 FR 11006, Mar. 5, 1998, as amended by T.D. 02-16, 67 FR 16637, Apr. 8, 2002] § 191.174 Derivatives manufactured under 19 U.S.C. 1313(a) or (b). When the basis for drawback 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 § 191.172(a) of this subpart; (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 § 191.8 of this part) in which the qualified article is manufactured or produced; or (2) Within 180 days after the close of the period in which the qualified article is manufactured or produced; and (f) Amount of drawback. § 191.175 Drawback claimant; maintenance of records. (a) Drawback claimant. (b) Certificate of manufacture and delivery or delivery 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), as so certified in a certificate of delivery, 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), so designated on a certificate of delivery or, in the case of the manufacturer or producer of a qualified article under 19 U.S.C. 1313(a) or (b), on a certificate of manufacture and delivery, will be the qualified article eligible for drawback for purposes of section 1313(p), provided that the following conditions are met: (A) The party who issues the applicable certificate for the transferred article must expressly state on the certificate that the certificate is prepared pursuant to 19 U.S.C. 1313(p) (the article may not be designated for any other drawback purposes); (B) The party must certify to the Commissioner of Customs on the certificate or an attachment that it has not, and will not, designate on that certificate and on any other such certificates issued a quantity of the article greater than the amount eligible for drawback; and (C) The party must certify to the Commissioner of Customs on the applicable certificate or on an attachment that it will maintain appropriate records which establish that it has not designated on any such certificates issued a greater quantity than the amount eligible for drawback. (c) Maintenance of records. [T.D. 98-16, 63 FR 11006, Mar. 5, 1998, as amended by T.D. 02-16, 67 FR 16637, Apr. 8, 2002] § 191.176 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 Customs Form 7551; 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 tariff classification; (iii) To the best of the claimant's knowledge, the designated imported merchandise, the qualified article and the exported article have not 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 payment of the claim; and (v) Such evidence will be available for verification by Customs. (d) Derivatives manufactured under 19 U.S.C. 1313(a) or (b). (1) The claim is filed on Customs Form 7551; (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 subject to the same 8-digit HTSUS tariff classification; (iii) To the best of the claimant's knowledge, the designated imported merchandise, the qualified article and the exported article have not 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 payment of the claim; and (v) Such evidence will be available for verification by Customs. Subpart R—Merchandise Transferred to a Foreign Trade Zone From Customs Territory § 191.181 Drawback allowance. The fourth proviso of § 3 of the Foreign Trade Zones Act of June 18, 1934, as amended (19 U.S.C. 81c), provides for drawback on 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), provided there is compliance with the regulations of this subpart. § 191.182 Zone-restricted merchandise. Merchandise in a foreign trade zone for the purposes specified in § 191.181 shall be given status as zone-restricted merchandise on proper application (see § 146.44 of this chapter). § 191.183 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. (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 § 191.184 Merchandise transferred from continuous Customs custody. (a) Procedure for filing claims. (b) Drawback entry. (c) Certification by zone operator. (d) Modification of drawback entry Indication of transfer. (2) Endorsement. Certification of Foreign Trade Zone Operator The merchandise described in the entry was received from ____________ on __________________, 19____; 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) § 191.185 Unused merchandise drawback and merchandise not conforming to sample or specification, shipped without consent of the consignee, or found to be defective as of the time of importation. (a) Procedure for filing claims. (b) Drawback entry. (c) Certification by zone operator. (d) Modification of drawback entry Indication of transfer. (2) Endorsement. Certification of Foreign Trade Zone Operator The merchandise described in this entry was received from ____________ on ____________, 19 ____, 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 [T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 15289, Mar. 31, 1998] § 191.186 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, shall be considered to be the transferor. Drawback may be claimed by, and paid to, the transferor. Subpart S—Drawback Compliance Program § 191.191 Purpose. This subpart sets forth the requirements for the Customs drawback compliance program in which claimants and other parties in interest, including Customs brokers, may participate after being certified by Customs. Participation in the program is voluntary. Under the program, Customs 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. § 191.192 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 Customs 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 Customs; (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 Customs regarding original records, or if approved by Customs, alternative records or recordkeeping formats for other than the original records; and (6) Has procedures for notifying Customs of variances in, or violations of, the drawback compliance or other alternative negotiated drawback compliance program, and for taking corrective action when notified by Customs of violations and problems regarding such program. (c) Broker certification. § 191.193 Application procedure for compliance program. (a) Who may apply. (b) Place of filing. (c) Letter of application; contents. (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 (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, as established by the certificates of manufacture and delivery they have executed.) (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 e-mail 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 §§ 191.7 and 191.8 of this part), as appropriate; (3) A description of the applicant's drawback record-keeping program, including the retention period and method (for example, paper, electronic, etc.); (4) A list of the records that will be maintained, including at least sample import documents, sample export 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 Customs 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 Customs 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 Customs is notified of any modifications from the procedures described in this application. § 191.194 Action on application to participate in compliance program. (a) Review by applicable drawback office General. (2) Criteria for CBP review. (i) The presence or absence of unresolved customs charges (duties, taxes, 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. (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 § 191.192; (iii) The program participant repeatedly files 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. [T.D. 98-16, 63 FR 11006, Mar. 5, 1998, as amended by T.D. 00-5, 65 FR 3812, Jan. 25, 2000] § 191.195 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 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 in and with the application). Appendix A to Part 191—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 who can comply with the conditions of any one of these rulings may notify a Customs drawback office in writing of its intention to operate under the ruling (see § 191.7 of this part). Such a letter of notification shall 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 § 191.6 of this part); 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; 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 § 191.2(q) of this part, the manufacturer or producer will be asked to provide details of the operation purported to be a manufacture or production. 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 A. Imported Merchandise or Drawback Products 1 Imported 1 B. Exported Articles on which Drawback will be Claimed Exported articles on which drawback will be claimed will 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 § 191.9 of this part). D. Process Of Manufacture Or Production The imported merchandise or drawback products will be used to manufacture or produce articles in accordance with § 191.2(q) of this part. 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 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 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. Tradeoff The use of any domestic merchandise acquired in exchange for imported merchandise that is of the same kind and quality as the imported merchandise, meeting specifications set forth in the application by the manufacturer or producer for a determination of same kind and quality (see § 191.11(c)), shall be treated as use of the imported merchandise if no certificate of delivery is issued covering the imported merchandise (19 U.S.C. 1313(k)) upon compliance with the applicable regulations and rulings (see 19 CFR 191.11). 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, the quantity, and the 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 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 Customs during business hours. Drawback is not payable without proof of compliance). K. 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(a) and part 191 of the CBP Regulations will be met, as discussed under the heading “Procedures And Records Maintained”. If those records do not establish satisfaction of those legal requirements, drawback cannot be paid. L. 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. M. 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 payment 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 to be included therein (I. General Instructions, 1 through 9) or 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 191 of the CBP Regulations and this general ruling. III. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313( a b Manufacturers or producers operating under this general manufacturing drawback ruling must comply with T.D.s 55027(2), 55207(1), and 19 U.S.C. 1313(b), if applicable, as well as 19 CFR part 191 (see particularly, § 191.9). 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 § 191.2(q) of this part. C. Procedures and Records Maintained Records will be maintained to establish: 1. Quantity, kind and quality 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 appearing in or used in manufacturing or production operations performed by the agent; 5. Total quantity and description of articles produced in manufacturing or production operations performed by the agent; 6. Quantity, kind and quality 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 payment 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 to be included therein (I. General Instructions, 1 through 9) or 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 191 of the CBP Regulations and this general ruling. IV. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313( a 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 Imported 1 B. Exported Articles on Which Drawback Will Be Claimed Exported articles on which drawback will be claimed will 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 § 191.9 of this part). D. Process of Manufacture or Production The imported merchandise or drawback products will be used to manufacture or produce articles in accordance with § 191.2(q) of this part. 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, the quantity, and the 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 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 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 Customs during business hours. Drawback is not payable without proof of compliance. I. 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(a) and part 191 of the CBP Regulations will be met, as discussed under the heading “Procedures and Records Maintained”. If those records do not establish satisfaction of those legal requirements, drawback cannot be paid. Each lot of imported material received by a manufacturer or producer shall be given a lot number and kept separate from other lots until used. The records of the manufacturer or producer shall show, as to each manufacturing lot or period of manufacture, the quantity of material used from each import lot and the number of each kind and size of bags or meat wrappers obtained. If applicable, a certificate of manufacture and delivery shall be filed covering each manufacturing lot or period of manufacture. 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 and, as applicable, covered by one certificate of manufacture and delivery. All exported bags or meat wrappers shall be identified by the exporter with the certificate of manufacture and delivery covering their manufacture, if applicable. 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 payment 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 to be included therein (I. General Instructions, 1 through 9) or 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 191 of the CBP Regulations and this general ruling. V. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313( b A. Same Kind and Quality (Parallel Columns) Imported Merchandise or Drawback Products 1 Duty-Paid, Duty-Free or Domestic Merchandise of the Same Kind and Quality as that Designated which will be Used in the Production of the Exported Products. Component parts identified by individual part numbers Component parts identified with the same individual part numbers as those in the column immediately to the left hereof. 1 The designated 2 2 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 § 191.9 of this part). D. Process of Manufacture or Production The components described in the parallel columns will be used to manufacture or produce articles in accordance with § 191.2(q) of this part. 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), the quantity, and the disposition of any waste that results from manufacturing the exported articles. If no waste results, records will be maintained to establish that fact. G. Tradeoff 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 if no certificate of delivery is issued covering the imported merchandise (19 U.S.C. 1313(k)) upon compliance with the applicable regulations and rulings. H. Procedures and Records Maintained Records will be maintained to establish: 1. The identity and specifications of the designated merchandise; 2. The quantity of merchandise of the same kind and quality as the designated merchandise 2 2 3. That, within 3 years after receiving the designated merchandise at its factory, the manufacturer or producer used the merchandise to produce articles. During the same 3-year period, the manufacturer or producer produced 3 3 I. 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 191 of the CBP Regulations will be met, as discussed under the heading “Procedures And Records Maintained”. If those records do not establish satisfaction of those 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 payment 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 to be included therein (I. General Instructions, 1 through 9) or 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 191 of the CBP Regulations and this general ruling. VI. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313( a 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 Imported 1 B. Exported Articles on Which Drawback Will Be Claimed Exported articles on which drawback will be claimed will 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 § 191.9 of this part). D. Process of Manufacture or Production The imported merchandise or drawback products will be used to manufacture or produce articles in accordance with § 191.2(q) of this part. 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 §§ 191.2(u), 191.22(e)). The “appearing in” basis may not be used if multiple products are produced. 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, the quantity, and the 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 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 Customs during business hours. Drawback is not payable without proof of compliance. I. 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(a) and part 191 of the CBP Regulations will be met, as discussed under the heading “Procedures and Records Maintained”. If those records do not establish satisfaction of those legal requirements, drawback cannot be paid. The inventory records of the manufacturer or producer shall show the inclusive dates of manufacture; the quantity, identity, and value 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 shall not be estimated nor computed on the basis of the quantity of finished products obtained, but shall 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 Customs 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 shall 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 shall 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 shall 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 shall be maintained showing the quantity, identity, and kind of oil so intermixed. Identity of merchandise or articles in either instance shall be in accordance with § 191.14 of this part. 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 payment 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 to be included therein (I. General Instructions, 1 through 9) or 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 191 of the CBP Regulations and this general ruling. VII. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313( a 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 Imported 1 B. Exported Articles on Which Drawback Will Be Claimed Exported articles on which drawback will be claimed will 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 § 191.9 of this part). D. Process of Manufacture or Production The imported merchandise or drawback products will be used to manufacture or produce articles in accordance with § 191.2(q) of this part. Drawback shall 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, the quantity, and the 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 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 Customs during business hours. Drawback is not payable without proof of compliance. I. 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(a) and part 191 of the CBP Regulations will be met, as discussed under the heading “Procedures and Records Maintained”. If those records do not establish satisfaction of those legal requirements, drawback cannot be paid. The records of the manufacturer or producer shall 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, and description of the imported merchandise used, the condition in which imported, the process or processes applied thereto, the quantity and description 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 shall 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 payment 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 to be included therein (I. General Instructions, 1 through 9) or 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 191 of the CBP Regulations and this general ruling. VIII. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313( b A. Same Kind and Quality (Parallel Columns) Imported Merchandise or Drawback Products 1 Duty-Paid, Duty-Free or Domestic Merchandise of the Same Kind and Quality 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. 1 The imported merchandise designated on drawback claims will be so similar in quality to the merchandise used in producing the exported articles on which drawback is claimed that the merchandise used would, if imported, be subject to the same rate of duty as the imported designated merchandise. Fluctuations in the market value resulting from factors other than quality will not affect the drawback. 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 § 191.9 of this part). 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. Tradeoff 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 if no certificate of delivery is issued covering the imported merchandise (19 U.S.C. 1313(k)) upon compliance with the applicable regulations and rulings. G. Procedures and Records Maintained Records will be maintained to establish: 1. The identity and specifications of the designated merchandise; 2. The quantity of merchandise of the same kind and quality as the designated merchandise 2 2 3. That, within 3 years after receiving the designated merchandise at its factory, the manufacturer or producer used the designated merchandise to produce articles. During the same 3-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 will be available for audit by Customs during business hours. No drawback is payable without proof of compliance. H. 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 191 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 those 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 payment 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 to be included therein (I. General Instructions, 1 through 9) or 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 191 of the CBP Regulations and this general ruling. IX. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313( b A. Parallel Columns—“Same Kind and Quality” Imported Merchandise or Drawback Products 1 Duty-Paid, Duty-Free or Domestic Merchandise of the Same Kind and Quality as That Designated Which Will Be Used in the Production of the Exported Products. 1 The manufacturer or producer will substitute crude petroleum for crude petroleum and a petroleum derivative for the same petroleum derivative on a class-for-class basis only. Class Designations: Class I—API Gravity 0—11.9 Class II—API Gravity 12.0—24.9 Class III—API Gravity 25.0—44.9 Class IV—API Gravity 45—up The imported merchandise which the manufacturer or producer will designate on its claims will be so similar in quality to the merchandise used in producing the exported articles on which drawback is claimed that the merchandise used would, if imported, be subject to the same rate of duty as the imported designated merchandise. B. Exported Articles Produced From Fractionation 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 the General Instructions, I.A.7., for this general drawback ruling. Each article to be exported must be named. When the identity of the product is not clearly evident by its name, there must be a statement as to what the product is, e.g., a herbicide. 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 § 191.9 of this part). 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 as the time of separation. The entire period covered by an abstract is to be treated at the time of separation. The value per unit of each product shall 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 will 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. Tradeoff 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 if no certificate of delivery is issued covering the imported merchandise (19 U.S.C. 1313(k)) upon compliance with the applicable regulations and rulings. I. Procedures and Records Maintained Records will be maintained to establish: 1. The identity and specifications of the merchandise designated; 2. The quantity of merchandise of the same kind and quality as the designated merchandise used to produce the exported articles. 3. That, within 3 years after receiving it at its refinery, the manufacturer or producer used the designated merchandise to produce articles. During the same 3-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, for the same class of designated merchandise, 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 General Instruction I.A.7.)).) 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 Customs 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 shall be deemed waived. The procedure the manufacturer or producer shall 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 shall 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 shall be computed by multiplying the quantity of each product exported by the drawback factor for that product. The amount of any one type and class 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 shall 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 of the same type and class 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 payment 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 to be included therein (I. General Instructions, 1 through 9) or 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 191 of the CBP Regulations and this general ruling. Exhibit C—Inventory Control Sheet: ABC Oil Co., Inc.; Beaumont, Texas Refinery, Period from January 1, 1995 to January 31, 1995 [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 176 1.01300 104,397 .43642 (13) Drawback Deliveries 696 1.00244 319 1.07895 (14) Domestic Shipments 97,863 1.01300 180,957 .43642 468 4.52178 6,867 1.07895 278,286 4.64041 (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 column 18). 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, 1995 to January 31, 1995 [Type and Class of Raw Material Designated—Crude, Class III] (21) (22) (23) (24) (19) (20) Aviation Gasoline 1 1 40 28,045 1.00126 11,232 1 40 440 1.01300 178 Residual Oils 1 1 83 25,567 .45962 9,754 1 83 125,780 .43642 45,561 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 column 24): 151,347. 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, 1995 to January 31, 1995, 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, 1995 to January 31, 1995] Certificate of delivery No. Entry No. Date of importation Kind of materials Quantity of materials in barrels Date received Date consumed Rate of duty 26192 04/13/93 Class III Crude 75,125 04/13/93 May 1993 $.1050 23990 08/04/94 ......do 37,240 08/04/94 Oct. 1994 .1050 3155 22517 10/05/94 ......do 38,982 10/05/94 Nov. 1994 .1050 X. General Manufacturing Drawback Ruling under 19 U.S.C. 1313( b A. Same Kind and Quality (Parallel Columns) Imported Merchandise or Drawback Products 1 Duty-Paid, Duty-Free or Domestic Merchandise of the Same Kind and Quality as that Designated which will be Used in the Production of the Exported Products. Piece goods Piece goods. 1 The piece goods used in manufacture will be the same kind and quality 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 of the same kind and quality as follows: 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 § 191.9 of this part). 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 will show the quantity of rag waste, if any, and its value. If necessary to establish the quantity of merchandise (eligible piece goods) appearing in the exported articles, such waste records will also be kept. 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. 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 will 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. Tradeoff 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 if no certificate of delivery is issued covering the imported merchandise (19 U.S.C. 1313(k)) upon compliance with the applicable regulations and rulings. I. Procedures and Records Maintained Records will be maintained to establish: 1. The identity and specifications of the designated merchandise; 2. The quantity of merchandise of the same kind and quality as the designated merchandise 2 2 3. That, within 3 years after receiving the designated merchandise at its factory, the manufacturer or producer used the merchandise to produce articles. During the same 3-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 Customs 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 191 of the CBP Regulations will be met, as discussed under the heading “Procedures And Records Maintained”. If those records do not establish satisfaction of those 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 payment 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 to be included therein (I. General Instructions, 1 through 9) or 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 191 of the CBP Regulations and this general ruling. XI. General Manufacturing Drawback Ruling under 19 U.S.C. 1313( b 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 shall not exceed 99 percent of the duty 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 shall have been manufactured with the use of duty-paid, duty-free, or domestic sugar, or combinations thereof, within 3 years after the date on which designated sugar was received by the refiner, and shall 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° and over shall be deemed hard refined sugar. All refined sugar testing by the polariscope less than 99.5° shall be deemed soft refined sugar. All “blackstrap,” “unfiltered sirup,” and “final molasses” shall be deemed sirup. D. The imported duty-paid sugar selected by the refiner as the basis for the drawback claim (designated sugar) shall be of the same kind and quality as that used in the manufacture of the exported refined sugar or sirup and shall have been used within 3 years after the date on which it was received by the refiner. Duty-paid sugar which has been used at a plant of a refiner within 3 years after the date on which it was received 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 shall 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 shall 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, shall 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, shall 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 shall show the refiner's raw lot number, the number and character of the packages, the settlement weight in pounds, and the settlement polarization. Such records covering imported sugar shall 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 shall show the date of melting, the number of pounds of each lot of raw sugar melted, and the full analysis at melting. J. There shall 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 shall 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 shall 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 shall 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, shall 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 shall 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 shall be marked with the marks which appeared on the original containers and a revised statement covering such repacking and remarking shall be filed with the drawback office. If sirups from more than one lot are stored in the same tank, the refinery records shall 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 shall have been authorized, shall be filed when drawback is to be claimed on any part of the refined sugar or sirup manufactured during such period. Such abstract shall be filed by each refiner with the drawback office where drawback claims are filed on the basis of this general ruling. Such abstract shall 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 191 and which are at all times open to the inspection of Customs. . Date . Signature O. The refiner shall 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 shall 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 shall be in accordance with the example set forth in Treasury Decision 83-59. R. Certificates of manufacture and delivery under this general ruling shall be in the following form: Certificate of manufacture and delivery—Sugar and Sirup No. ________ Certificate of manufacture and delivery of ________ manufactured by ________ under abstract No. ________ filed at the port of ________. Description Quantity Polarization Designation of Imported Sugar Import entry No. By whom imported or withdrawn from warehouse Name of importing carrier When imported Where imported Quantity of raw sugar (pounds) Polarization Sucrose (pounds) I, ________, the ________ of ________, located at ________, declare that the sugar (or sirup) described in the within certificate of manufacture and delivery 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 ________ and was delivered to ________ on or about ________, ____________, and that no other certificate of manufacture and delivery has been issued covering the above merchandise; 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 Customs. 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 on ________. . Date . Signature S. Drawback entries under this general ruling shall be on Customs Form 7551 and, in addition to the information required thereon, shall state the polarization in degrees and the sucrose in pounds for the designated imported sugar. Drawback claims under this general ruling shall 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 ________ [or, if the claim is based on a certificate of manufacture and delivery, was manufactured by ________ at its refinery at ________ for which the accompanying certificate of manufacture and delivery was received by this company] 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 Customs. 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. ________, Customs 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 § 191.9 of this part). 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), the quantity, and the 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. Tradeoff. The use of any domestic merchandise acquired in exchange for imported merchandise that meets the same kind and quality requirements provided for in this general ruling shall be treated as use of the imported merchandise if no certificate of delivery is issued covering the imported merchandise (19 U.S.C. 1313(k)) upon compliance with the applicable regulations and rulings. X. Procedures And Records Maintained. Records will be maintained to establish: 1. The identity and specifications of the designated merchandise; 2. The quantity of merchandise of the same kind and quality as the designated merchandise 1 1 3. That, within 3 years after receiving the designated merchandise at its factory, the refiner used the designated merchandise to produce articles. During the same 3-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 Customs 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 payment 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 to be included therein (I. General Instructions, 1 through 9) or 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 191 of the CBP Regulations and this general ruling. XII. General Manufacturing Drawback Ruling under 19 U.S.C. 1313( b A. Same Kind and Quality (Parallel Columns) Imported Merchandise or Drawback Products 1 Duty-Paid, Duty-Free or Domestic Merchandise of the Same Kind and Quality 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 one 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 2 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. 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 5, infra, 3. The duty-paid steel (or drawback products) will be so similar in quality to the steel used to manufacture the articles on which drawback will be claimed that the steel so used, if imported, would be classifiable in the same tariff subheading number and at the same rate of duty as the duty-paid imported steel. 4. Any fluctuation in market value caused by a factor other than quality does not affect drawback. 5. 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 a SAE, AISI, ASTM specification, any duty-paid, duty-free, or domestic coated or plated steel covered by the same specification and grade (if two or more grades are in the specification) is considered to meet this criterion for “same kind and quality.” 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 § 191.9 of this part). D. Process of Manufacture or Production The steel described in the parallel columns will be used to manufacture or produce articles in accordance with § 191.2(q) of this part. 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), the quantity, and the 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. Tradeoff 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 if no certificate of delivery is issued covering the imported merchandise (19 U.S.C. 1313(k)) upon compliance with the applicable regulations and rulings. I. Procedures and Records Maintained Records will be maintained to establish: 1. The identity and specifications of the designated merchandise; 2. The quantity of merchandise of the same kind and quality as the designated merchandise 3 3 3. That, within 3 years after receiving the designated merchandise at its factory, the manufacturer or producer used the merchandise to produce articles. During the same 3-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 Customs 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 191 of the CBP Regulations will be met, as discussed under the heading “Procedures And Records Maintained”. If those records do not establish satisfaction of those 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 payment 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 to be included therein (I. General Instructions, 1 through 9) or 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 191 of the CBP Regulations and this general ruling. XIII. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313( b A. Same Kind and Quality (Parallel Columns) Imported Merchandise or Drawback Products 1 Duty-Paid, Duty-Free or Domestic Merchandise of the Same Kind and Quality 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 not less than 99.5 sugar degrees. 2. 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 less than 99.5 sugar degrees. 1 The sugars listed above test within three-tenths of a degree on the polariscope. Sugars in each column are completely interchangeable with the sugars directly opposite and designation will be made on this basis only. The designated sugar on which claims for drawback will be based will be so similar in quality to the sugar used in manufacture of the products exported with drawback that the sugar used in manufacture would, if imported, be subject to the same amount of duty paid on a like quantity of designated sugar. Differences in value resulting from factors other than quality, such as market fluctuation, will not affect the allowance of drawback. 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 § 191.9 of this part). 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), the quantity, and the 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. Tradeoff 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 if no certificate of delivery is issued covering the imported merchandise (19 U.S.C. 1313(k)) upon compliance with the applicable regulations and rulings. I. Procedures And Records Maintained Records will be maintained to establish: 1. The identity and specifications of the designated merchandise; 2. The quantity of merchandise of the same kind and quality as the designated merchandise 2 2 3. That, within 3 years after receiving the designated merchandise at its factory, the manufacturer or producer used the merchandise to produce articles. During the same 3-year period, the manufacturer or producer produced 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 Customs during business hours. Drawback is not payable without proof of compliance. 3 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 191 of the CBP Regulations will be met, as discussed under the heading “Procedures And Records Maintained”. If those records do not establish satisfaction of those 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 payment 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 to be included therein (I. General Instructions, 1 through 9) or 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 191 of the CBP Regulations and this general ruling. XIV. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313( a 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 Imported 1 B. Exported Articles on Which Drawback Will Be Claimed Exported articles on which drawback will be claimed will 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 § 191.9 of this part). D. Process of Manufacture or Production The imported merchandise or drawback products will be used to manufacture or produce articles in accordance with § 191.2(q) of this part. 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 shall 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 will show the quantity of rag waste, if any, its value, and its disposition. If necessary to establish the quantity of merchandise (eligible piece goods) appearing in the exported articles, such waste records will also be kept. 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. 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 will 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 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 Customs during business hours. Drawback is not payable without proof of compliance. I. 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(a) and part 191 of the CBP Regulations will be met, as discussed under the heading “Procedures and Records Maintained”. If those records do not establish satisfaction of those legal requirements, drawback cannot be paid. The records of the manufacturer or producer shall 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, and value 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 shall 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 shall 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 shall 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 payment 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 to be included therein (I. General Instructions, 1 through 9) or 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 191 of the CBP Regulations and this general ruling. [T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 13105, Mar. 17, 1998; 63 FR 15291, Mar. 31, 1998; 63 FR 65060, Nov. 25, 1998; T.D. 02-16, 67 FR 16638, Apr. 8, 2002] Appendix B to Part 191—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 These sample formats for applications for specific manufacturing drawback rulings must be submitted to and reviewed and approved by CBP Headquarters. A specific manufacturing drawback ruling consists of the letter of approval that CBP issues to the applicant, a synopsis of which is published in the Customs Bulletin, as provided in 19 CFR 191.8. In these application formats, remarks in parentheses and footnotes are for explanatory purposes only and should not be copied. Other material should be quoted directly in the applications. II. Format for Application for Specific Manufacturing Drawback Ruling Under 19 U.S.C. 1313( a b COMPANY LETTERHEAD (Optional) U.S. Customs and Border Protection, Entry Process and Duty Refunds, Regulations and Rulings, Office of International Trade, 1300 Pennsylvania Avenue, N.W., Washington, D.C. 20229. Dear Sir: 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 191 of the CBP Regulations. We request that the Customs Service authorize drawback on the basis of this application. NAME AND ADDRESS AND IRS NUMBER (WITH SUFFIX) OF APPLICANT (Section 191.8(a) of the CBP Regulations provides that each manufacturer or producer of articles intended for exportation with the benefit of drawback shall apply for a specific manufacturing drawback ruling, unless operating under a general manufacturing drawback ruling under § 191.7 of the CBP Regulations. Customs will not approve an application which shows an unincorporated division or company as the applicant (see § 191.8(a)).) LOCATION OF FACTORY (Give the address of the factory(s) where the process of manufacture or production will take place. If the factory is a different legal entity from the applicant, so state 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 191.6 of the CBP Regulations permits only the president, vice-president, secretary, treasurer, or 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 footnote at end of this sample format for persons who may sign applications for specific manufacturing drawback rulings).) CBP OFFICE WHERE DRAWBACK CLAIMS WILL BE FILED (The four offices where drawback claims can be filed are located at: New York, NY; Houston, TX; Chicago, IL; San Francisco, CA) (An original application and two copies must be filed. If the applicant intends to file drawback claims at more than one drawback office, one additional copy of the application must be furnished for each additional office indicated.) 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, does the applicant understand its obligations to obtain the appropriate certificates of delivery (19 CFR 191.10), certificates of manufacture and delivery (19 CFR 191.24), or both?) 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 § 191.9, 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 § 191.7 and Appendix A) or an application for a specific manufacturing drawback ruling (see § 191.8 and this Appendix B).) 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 191.82).) (Since the permission to grant use of the accelerated payment procedure rests with the Customs office with which claims will be filed, do not include any reference to that procedure in this application.) PROCEDURES UNDER SECTION 1313( b IMPORTED MERCHANDISE OR DRAWBACK PRODUCTS 1 DUTY-PAID, DUTY-FREE OR DOMESTIC MERCHANDISE OF THE SAME KIND AND QUALITY AS THAT DESIGNATED WHICH WILL BE USED IN THE PRODUCTION OF THE EXPORTED PRODUCTS. 1. 1. 2. 2. 3. 3. 1 (Following the items listed in the parallel columns, a statement will be made, by the applicant, that affirms the “same kind and quality” of the merchandise. This statement should be included in the application exactly as it is stated below:) The imported merchandise which we will designate on our claims will be so similar in quality to the merchandise used in producing the exported articles on which we claim drawback that the merchandise used would, if imported, be subject to the same rate of duty as the imported designated merchandise. Fluctuations in the market value resulting from factors other than quality will not affect the 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 the “same kind and quality”. “Same kind and quality” does not necessarily mean that the merchandise is identical. It does mean that the merchandise is of the same nature or character (“same kind”) and that the merchandise to be substituted is interchangeable with the imported merchandise with little or no change in the manufacturing process to produce the same exported article (“same quality”). In order to enable Customs to rule on “same kind and quality”, 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.) (It is essential that all the characteristics which determine the quality of the merchandise are provided in the application in order to substantiate that the merchandise meets the “same kind and quality” statutory requirement. These characteristics should clearly distinguish merchandise of different qualities. For example, USDA standards; FDA standards; industry standards, e.g., ASTM; concentration; specific gravity; purity; luster; melting point, boiling point; odor; color; grade; type; hardness; brittleness; etc. Note that these are only a few examples of characteristics and that each kind of merchandise has its own set of specifications that characterizes its quality. If specifications are given with a minimum value, be sure to include a maximum value. The converse is also true. Often characteristics are given to Customs on attached specification sheets. These specifications should not include Material Safety Data sheets or other descriptions of the merchandise that do not contribute to the “same kind and quality” determination. When the merchandise is a chemical, state the chemical's generic name as well as its trade name plus any generally recognized identifying number, e.g., CAS number; Color Index Number, etc.) (In order to expedite the specific manufacturing drawback ruling process, it will be helpful if you provide copies of technical standards/specifications (particularly industry standards such as ASTM standards) referred to in your application.) (The descriptions of the “same kind and quality” merchandise should be formatted in the parallel columns. The left-hand column will consist of the name and specifications of the designated imported merchandise under the heading set forth above. The right-hand column will consist of the name and specifications for the duty-paid, duty-free or domestic merchandise under the heading set forth above.) 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 § 191.2(q). In order to obtain drawback under § 1313(b), it is essential for the applicant to show use in manufacture or production by giving 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, give equations of the chemical reactions. The attachment of a flow chart in addition to the description showing the manufacturing process is an excellent means of illustrating whether or not a manufacture or production has occurred. 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 used in the same operation into two or more products. 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 necessarily are produced concurrently 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 $1500 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 allowable 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 positive statement to that effect under this heading.) (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 imported or substituted merchandise used in producing the exported articles (less valuable waste), state that you will keep records to establish the quantity and value of the waste recovered. See “Basis of Claim for Drawback” section below.) 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.) TRADEOFF (If an applicant proposes to use tradeoff (19 CFR 191.11), the applicant should so state and the applicant should describe the contractual arrangement between the applicant and its partner for tradeoff. The person claiming drawback under the tradeoff provision has the burden of establishing compliance with the law and regulations. In this regard, the terms of a written contract are always easier to establish than those of an oral contract.) 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. 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 specifications of the merchandise we designate; 2. The quantity of merchandise of the same kind and quality as the designated merchandise 2 2 3. That, within 3 years after receiving it at our factory, we used the designated merchandise to produce articles. During the same 3-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 Customs 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 191 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 KIND AND QUALITY WITHIN 3 YEARS AFTER THE RECEIPT 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 well 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, a statement that the legal requirements will be met by your inventory procedures is acceptable. However, it should be noted that without a detailed description of the inventory procedures set forth in the application a judgement 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 record keeping procedures if, for example, those procedures are merely 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 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 duty 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 duty 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 duty 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 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 Less Valuable Waste” basis. When valuable waste is incurred, the drawback allowance on the exported article is based on the duty paid on the quantity of merchandise used in the manufacture, reduced by the quantity of such merchandise which the value of the waste would replace. Thus in this 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 191.26(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 duty 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 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 may be set forth on Customs Form 7551) which shows the total quantity used in producing all products during the period covered by the abstract. The abstract looks at a duration of time, for instance 3 months, in which the quantity of material has been used. An abstract looks back on how much material was actually used after a production period has been completed.) (An applicant who fails to indicate the “schedule” choice must base his claims on the “abstract” method. State which Basis and Method you will use. An example of Used In by Schedule follows:) We shall claim drawback on the quantity of (specify material) used in manufacturing (exported article) according to the schedule set forth below. (Section 191.8(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 the time it is received at your factory 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 section with this title for procedures under § 1313(b). Either repeat the same basis of claim or use a different basis of claim, as described above, specifically for drawback claimed under § 1313(a).) 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 payment 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 § 191.9 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 the Headquarters, U.S. Customs Service all other changes affecting information contained in this application; 6. Keep a copy of this application and the letter of approval by Customs 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 191 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 ______________ 19____, 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, Commercial and Trade Facilitation Division, Regulations and Rulings, Office of International Trade, 1300 Pennsylvania Avenue, N.W., Washington, D.C. 20229. Dear Sir: 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 191 of the Customs Regulations. We request that the Customs Service authorize drawback on the basis of this application. NAME AND ADDRESS AND IRS NUMBER (WITH SUFFIX) OF APPLICANT (Section 191.8(a) of the CBP Regulations provides that each manufacturer or producer of articles intended for exportation with the benefit of drawback shall apply for a specific manufacturing drawback ruling, unless operating under a general manufacturing drawback ruling under § 191.7 of the CBP Regulations. Customs will not approve an application which shows an unincorporated division or company as the applicant (see § 191.8(a)).) LOCATION OF FACTORY (Give the address of the factory(ies) where the process of manufacture or production will take place. If the factory is a different legal entity from the applicant, so state 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 191.6 of the CBP Regulations permits only the president, vice-president, secretary, treasurer, or 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 footnote at end of this sample format for persons who may sign applications for specific manufacturing drawback rulings).) CBP OFFICE WHERE DRAWBACK CLAIMS WILL BE FILED (The four offices where drawback claims can be filed are located at: New York, NY; Houston, TX; Chicago, IL; San Francisco, CA) (An original application and two copies must be filed. If the applicant intends to file drawback claims at more than one drawback office, one additional copy of the application must be furnished for each additional office indicated.) 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, does the applicant understand its obligations to obtain the appropriate certificates of delivery (19 CFR 191.10), certificates of manufacture and delivery (19 CFR 191.24), or both?) 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 § 191.9, 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 § 191.7 and Appendix A), or an application for a specific manufacturing drawback ruling (see § 191.8 and this Appendix B).) 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 191.82).) (Since the permission to grant use of the accelerated payment procedure rests with the Drawback office with which claims will be filed, do not include any reference to that procedure in this application.) (PARALLEL COLUMNS—“SAME KIND AND QUALITY”) IMPORTED MERCHANDISE OR DRAWBACK PRODUCTS 1 DUTY-PAID, DUTY-FREE OR DOMESTIC MERCHANDISE OF THE SAME KIND AND QUALITY AS THAT DESIGNATED WHICH WILL BE USED IN THE PRODUCTION OF THE EXPORTED PRODUCTS. 1. 1. 2. 2. 3. 3. 1 (Following the items listed in the parallel columns, a statement will be made, by the applicant, that affirms the “same kind and quality” of the merchandise. This statement should be included in the application exactly as it is stated below:) The imported merchandise which we will designate on our claims will be so similar in quality to the merchandise used in producing the exported articles on which we claim drawback that the merchandise used would, if imported, be subject to the same rate of duty as the imported designated merchandise. Fluctuations in the market value resulting from factors other than quality will not affect the 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 the “same kind and quality”. “Same kind and quality” does not necessarily mean that the merchandise is identical. It does mean that the merchandise is of the same nature or character (“same kind”) and that the merchandise to be substituted is interchangeable with the imported merchandise with little or no change in the manufacturing process to produce the same exported article (“same quality”). In order to enable Customs to rule on “same kind and quality”, 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.) (It is essential that all the characteristics which determine the quality of the merchandise are provided in the application in order to substantiate that the merchandise meets the “same kind and quality” statutory requirement. These characteristics should clearly distinguish merchandise of different qualities. For example, USDA standards; FDA standards; industry standards, e.g., ASTM; concentration; specific gravity; purity; luster; melting point, boiling point; odor; color; grade; type; hardness; brittleness; etc. Note that these are only a few examples of characteristics and that each kind of merchandise has its own set of specifications that characterizes its quality. If specifications are given with a minimum value, be sure to include a maximum value. The converse is also true. Often characteristics are given to Customs on attached specification sheets. These specifications should not include Material Safety Data sheets or other descriptions of the merchandise that do not contribute to the “same kind and quality” determination. When the merchandise is a chemical, state the chemical's generic name as well as its trade name plus any generally recognized identifying number, e.g., CAS number; Color Index Number, etc.) (In order to expedite the specific manufacturing drawback ruling review process, it will be helpful if you provide copies of technical standards/specifications (particularly industry standards such as ASTM standards) referred to in your application.) (The descriptions of the “same kind and quality” merchandise should be formatted in the parallel columns. The left-hand column will consist of the name and specifications of the designated imported merchandise under the heading set forth above. The right-hand column will consist of the name and specifications for the duty-paid, duty-free or domestic merchandise under the heading set forth above.) 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 § 191.2(q). In order to obtain drawback under § 1313(b), it is essential for the applicant to show use in manufacture or production by giving 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, give equations of the chemical reactions. The attachment of a flow chart in addition to the description showing the manufacturing process is an excellent means of illustrating whether or not a manufacture or production has occurred. 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 used in the same operation into two or more products. 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 necessarily are produced concurrently 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 $1500 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 allowable 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 positive statement to that effect under this heading.) (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 imported or substituted merchandise used in producing the exported articles less valuable waste, state that you will keep records to establish the quantity and value of the waste recovered. See “Basis of Claim for Drawback” section below.) 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.) TRADEOFF (If an applicant proposes to use tradeoff (19 CFR 191.11), the applicant should so state and the applicant should describe the contractual arrangement between the applicant and its partner for tradeoff. The person claiming drawback under the tradeoff provisions has the burden of establishing compliance with the law and regulations. In this regard, the terms of a written contract are always easier to establish than those of an oral contract.) 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. 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 specifications of the merchandise we designate; 2. The quantity of merchandise of the same kind and quality as the designated merchandise 2 2 3. That, within 3 years after receiving it at our factory, we used the designated merchandise to produce articles. During the same 3-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 Customs 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 191 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 KIND AND QUALITY WITHIN 3 YEARS AFTER THE RECEIPT 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 well 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, a statement that the legal requirements will be met by your inventory procedures is acceptable. However, it should be noted that without a detailed description of the inventory procedures set forth in the application a judgement 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 record keeping procedures if, for example, those procedures are merely 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 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 duty 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 duty 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 duty 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 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 Less Valuable Waste” basis. When valuable waste is incurred, the drawback allowance on the exported article is based on the duty paid on the quantity of merchandise used in the manufacture, reduced by the quantity of such merchandise which the value of the waste would replace. Thus in this 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 191.26(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 duty 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 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 may be set forth on Customs Form 7551) which shows the total quantity used in producing all products during the period covered by the abstract. The abstract looks at a duration of time, for instance 3 months, in which the quantity of material has been used. An abstract looks back on how much material was actually used after a production period has been completed.) (An applicant who fails to indicate the “schedule” choice must base his claims on the “abstract” method. State which Basis and Method you will use. An example of Used In by Schedule would read:) We shall claim drawback on the quantity of (specify material) used in manufacturing (exported article) according to the schedule set forth below. (Section 191.8(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 payment 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 § 191.9 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 the Headquarters, U.S. Customs Service all other changes affecting information contained in this application; 6. Keep a copy of this application and the letter of approval by Customs 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 191 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 __________________ 19____, 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, Commercial and Trade Facilitation Division, Regulations and Rulings, Office of International Trade, 1300 Pennsylvania Avenue, N.W., Washington, D.C. 20229. Dear Sir: 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 191 of the Customs Regulations. We request that the Customs Service authorize drawback on the basis of this application. NAME AND ADDRESS AND IRS NUMBER (WITH SUFFIX) OF APPLICANT (Section 191.8(a) of the CBP Regulations provides that each manufacturer or producer of articles intended for exportation with the benefit of drawback shall apply for a specific manufacturing drawback ruling, unless operating under a general manufacturing drawback ruling under § 191.7 of the CBP Regulations. Customs will not approve an application which shows an unincorporated division or company as the applicant (see § 191.8(a)).) LOCATION OF FACTORY (Give the address of the factory(s) where the process of manufacture or production will take place. If the factory is a different legal entity from the applicant, so state 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 191.6 of the CBP Regulations permits only the president, vice-president, secretary, treasurer, or 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 footnote at end of this sample format for persons who may sign applications for specific manufacturing drawback rulings). CBP OFFICE WHERE DRAWBACK CLAIMS WILL BE FILED (The four offices where drawback claims can be filed are located at: New York, NY; Houston, TX; Chicago, IL; San Francisco, CA) (An original application and two copies must be filed. If the applicant intends to file drawback claims at more than one drawback office, one additional copy of the application must be furnished for each additional office indicated.) 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 his 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 his 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 § 191.9, 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 § 191.7 and Appendix A), or an application for a specific manufacturing drawback ruling (see § 191.8 and this Appendix B).) (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.) (Since the permission to grant use of the accelerated payment procedure rests with the Drawback office with which claims will be filed, do not include any reference to that procedure in this application.) 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 § 191.2(q). In order to obtain drawback under § 1313(d), it is essential for the applicant to show use in manufacture or production by giving 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 positive statement to that effect under this heading.) (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 valuable waste), state that you will keep records to establish the quantity and value of the waste recovered. See “Basis of Claim for Drawback” section below.) 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. 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 Customs 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 191 of the CBP Regulations as discussed under the heading PROCEDURES AND RECORDS MAINTAINED. To insure 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 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 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 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, 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 may be set forth on Customs Form 7551) which shows the total quantity used in producing all products during the period covered by the abstract. The abstract looks at a duration of time, for instance 3 months, in which the quantity of material has been used. An abstract looks back on how much material was actually used after a production period has been completed.) (An applicant who fails to indicate the “schedule” choice must base his claims on the “abstract” method. State which Basis and Method you will use. An example of Used In by schedule follows:) We shall claim drawback on the quantity of (specify material) used in manufacturing (exported article) according to the schedule set forth below. (Section 191.8(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 payment 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 § 191.9 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 the Headquarters, U.S. Customs Service all other changes affecting information contained in this application; 6. Keep a copy of this application and the letter of approval by Customs 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 191 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 __________________ 19____, makes this application binding on (Name of Applicant Corporation, Partnership, or Sole Proprietorship) By 2 (Signature and Title) 2 (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, Commercial and Trade Facilitation Division, Regulations and Rulings, Office of International Trade, 1300 Pennsylvania Avenue, N.W., Washington, D.C. 20229. Dear Sir: 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 191 of the Customs Regulations. We request that the Customs Service authorize drawback on the basis of this application. NAME AND ADDRESS AND IRS NUMBER (WITH SUFFIX) OF APPLICANT (Section 191.8(a) of the CBP Regulations provides that each manufacturer or producer of articles intended for exportation with the benefit of drawback shall apply for a specific manufacturing drawback ruling, unless operating under a general manufacturing drawback ruling under § 191.7 of the CBP Regulations. Customs will not approve an application which shows an unincorporated division or company as the applicant (see § 191.8(a).) LOCATION OF FACTORY OR SHIPYARD (Give the address of the factory(s) or shipyard(s) at which the construction and equipment will take place. If the factory or shipyard is a different legal entity from the applicant, so state 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 191.6 of the CBP Regulations permits only the president, vice-president, secretary, treasurer, or 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 footnote at end of this sample format for persons who may sign applications for specific manufacturing drawback rulings).) CBP OFFICE WHERE DRAWBACK CLAIMS WILL BE FILED (The four offices where drawback claims can be filed are located at: New York, NY; Houston, TX; Chicago, IL; San Francisco, CA) (An original application and two copies must be filed. If the applicant intends to file drawback claims at more than one drawback office, one additional copy of the application must be furnished for each additional office indicated.) 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, does the applicant understand its obligations to obtain the appropriate certificates of delivery (19 CFR 191.10), certificates of manufacture and delivery (19 CFR 191.24), or both?) 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 § 191.9, 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 § 191.7 and Appendix A), or an application for a specific manufacturing drawback ruling (see § 191.8 and this Appendix B).) 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 shall be included under this heading the following statement: We are particularly aware of the terms of § 191.76(a)(1) of and subpart M of part 191 of the Customs Regulations, and shall comply with these sections where appropriate.) (Since the permission to grant use of the accelerated payment procedure rests with the Drawback office with which claims will be filed, do not include any reference to that procedure in this application.) 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 (What is required here is a clear, concise description of the process of construction and equipment involved. The description should also 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 positive statement to that effect under this heading.) (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 imported or substituted merchandise used in producing the exported articles (less valuable waste), state that you will keep records to establish the quantity and value of the waste recovered. See “Basis of Claim for Drawback” section below.) 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. 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 Customs 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 191 of the CBP Regulations as discussed under the heading PROCEDURES AND RECORDS MAINTAINED. To insure 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 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 duty 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 duty 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 duty 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 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 Less Valuable Waste” basis. When valuable waste is incurred, the drawback allowance on the exported article is based on the duty paid on the quantity of imported material used to construct and equip the exported product, reduced by the quantity of such material which the value of the waste would replace. Thus in this 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 191.26(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 duty 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 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 may be set forth on Customs Form 7551) which shows the total quantity used in producing all products during the period covered by the abstract. The abstract looks at a duration of time, for instance 3 months, in which the quantity of material has been used. An abstract looks back on how much material was actually used after a production period has been completed.) (An applicant who fails to indicate the “schedule” choice must base his claims on the “abstract” method. State which Basis and Method you will use. An example of Used In by Schedule would read:) We shall claim drawback on the quantity of (specify material) used in manufacturing (exported article) according to the schedule set forth below. (Section 191.8(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 payment 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 § 191.9 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 the Headquarters, U.S. Customs Service all other changes affecting information contained in this application; 6. Keep a copy of this application and the letter of approval by Customs 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 191 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 ____________________ 19____, makes this application binding on (Name of Applicant Corporation, Partnership, or Sole Proprietorship) By 2 (Signature 2 [T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 15291, Mar. 31, 1998; 63 FR 65060, Nov. 25, 1998; CBP Dec. 15-11, 80 FR 47407, Aug. 7, 2015]

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