If there is an error in duty, or a disagreement with the dutiable status of the goods after the liquidation of the entry, the importer may file a “Protest” and application for further review with Customs within 90 days after liquidation (CFR part 174). If U.S. Customs denies the protest, dutiable status may then be determined through litigation against the Government.
The term “Drawback” refers to a refund of 99% of the duties and taxes collected on imported merchandise that was subsequently exported or destroyed. There are three types of drawbacks:
- Manufacturing drawback
A refund of duties paid on imported merchandise used in the manufacture of articles that were either exported or destroyed. The goods must be used in manufacture and exported within 5 years from date of importation.
- Unused-merchandise drawback
A refund of duties paid on imported merchandise that is exported or destroyed without undergoing manufacture, and is never used in the United States. The goods must be exported or destroyed within three years from date of importation.
- Rejected-merchandise drawback
A refund of duties paid on imported merchandise that is exported because it does not conform to sample or specification, or was shipped without consent of the consignee Merchandise must be returned to Customs custody within three years from date of importation. Rejected merchandise must be exported and cannot be destroyed in lieu of such exportation.