The Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA) is an authorization of CBP’s trade authority and was enforced to create an environment for fair, honest and competitive trade in the United States. Section 906 of TFTEA made a comprehensive set of changes to duty drawback claim filing. Even though TFTEA was only signed into law in 2016, it is necessary to know these recent changes since it greatly affects the drawback application process.
TFTEA was signed into law on February 24, 2016, and Section 906 of this act made specific changes to the drawback law and filing process and as of February 24, 2019, all drawback claims must be filed under the new TFTEA regulations. Calculating TFTEA claims vary depending on the type of drawback the claimant is filing under.
According to US Customs and Border Protection, “This Act supports CBP’s efforts to protect U.S. Economic Security through Trade Enforcement; collaborate with the Private Sector through direct engagement; and streamline and modernize processes through Business Transformation initiatives to meet the demands and complexities of a rapidly evolving global supply chain.”
According to CBP, unless otherwise specified, for a drawback claim to be complete under TFTEA it must include:
TFTEA claims do require line level reporting from the CBP Form 7501.
NAFTA, the North American Free Trade Agreement, was signed into law on December 8, 1993 and took effect on January 1, 1994. NAFTA creates a trade bloc amongst the three major countries of North America: The United States, Mexico and Canada.
Under NAFTA, drawback is payable on the lesser of:
Under the current administration, there are tentative plans to move from NAFTA to USMCA (United States-Mexico-Canada Agreement), which would also affect the drawback claim filing process. According to the United States Trade Representative, “the USMCA can come into effect following the completion of TPA procedures, including a Congressional vote on an implementing bill.”
It is important to stay up to date to ensure that duty drawback claims are being filed correctly in the case of new laws and regulations. To learn more about duty drawback, download our 101 eBook guide here.