Tariffs Now Eligible for Drawback

Drawback in the US

US Customs and Border Protection issued a statement announcing that imports from China will be eligible for drawback, despite a prior statement that they would not. The new 25% tariffs under section 301 on approximately $34 million worth of goods are effective as of Friday, July 6, 2018.

For more on this, please see CSMS #18-000419 on the US Customs and Border Protection Website.

Drawback in Canada

Following the announcement of Canadian countermeasures to the US tariffs on steel and aluminum, the Canada Border Services Agency (CBSA) has provided further clarification regarding drawback. The CBSA has stated that when goods are further manufactured or incorporated into goods which are then exported to the US where they enter duty-free under NAFTA, the entire amount of surtax may be eligible for a drawback, subject to compliance of program requirements.

The Duties Relief Program allows qualified companies to import goods without paying duties, as long as those goods are eventually exported. As part of the program, companies can manufacture or use the goods in a limited manner before export. Companies may qualify for the Drawback Program (a refund of customs duties paid for imported goods) if the goods are eventually exported; or if the goods are manufactured and eventually exported.

For information about Duties Relief and Duty-Drawback, see CBSA Customs Notice 18-08, Section 10.

If you have questions about drawback and want to find out if your business is eligible, please reach out to our team today. As a customer-focused company, we provide you with a single source of unmatched Customs Brokerage (Canadian, US, Mexican), Trade Managed Solutions, Freight Forwarding, Trade Technologies and Warehousing / Distribution Services.

Retaliatory Tariffs Clarification & Links

The Canadian Society of Customs Brokers (CSCB) has been working closely with the CBSA in order to clarify details regarding the Canadian retaliatory tariffs. Please see a list of these clarifications below (from CSCB):

  1. PIRO and CIRO – (Postal Imports Remission Order) and (Courier Imports Remission Order)
    Good released under these remission orders are subject to the surtax. However, CBSA is aware of the operational challenges and will be discussing with Finance the impact on all parties. The CSCB is participating in a conference call with CBSA and other affect parties today.
  2. Order in Council
    The Order in Council will be included will be published in the July 11 issue of the Canada Gazette. However, it will not be mandatory to include the O.I.C. on release or accounting documents. CBSA will use the code shown in field 26 of the B3, together with the HS and description of goods, to identify when the surtax applies. Members who wish to include an O.I.C. or other numbers/characters in field 26 for programming purposes may do so. This is considered a free-text field and will not result in CADEX rejects regardless of the information in this field.
  3. Country of Export
    Commercial goods that are eligible to be marked as goods from the U.S. and shipped to Canada from a country other than the U.S. are subject to the surtax.
  4. Processing
    If non-U.S. goods are sent from Canada to the U.S. for processing, surtax is payable on the cost of the processing when the goods return to Canada if the origin of the goods has changed to U.S. and if the goods are included in one of the tariff items subject to the surtax.
  5. Processing
    If U.S. goods are sent from Canada to the U.S. for processing, surtax is payable on the value of the goods plus the cost of the processing if the goods maintain their U.S. origin and are included in one of the tariff items subject to the surtax.