Duty drawback allows companies to claim a refund on import duties, fees, and taxes paid on goods brought into the U.S. if those goods are later exported. There are two main types of duty drawback: manufacturing drawback applies when an imported item is manufactured into a different exported item, and unused merchandise drawback applies when an imported item is exported without changes. Recent legislation expanded eligibility for duty drawback claims by allowing for broader substitutions of goods and increasing the claims filing timeline to five years. Working with a duty drawback specialist can help companies navigate the paperwork required to claim refunds on eligible exports.

1. a UPS Company
Duty drawback: a refund on
import duties, fees, and tax-
es you may be able to claim
when you export.
Duty drawback is a refund of duties, fees and
taxes paid on goods imported into the U.S.
that are subsequently exported from the U.S.
Similar to how you are refunded sales tax
when you return an item to a store, you can
claim a duty refund when you export an item
that was previously imported.
There are several different categories of duty
drawback, but the two most common cate-
gories are manufacturing and unused mer-
chandise.
Manufacturing duty drawback applies when
you import an item that is then manufactured
into a different item. For example, if you im-
port bicycle tires and export finished bicycles,
then you can get the duty you paid for the
bicycle tires refunded when you export the
finished bicycle.
Manufacturing duty drawback example
Unused merchandise duty drawback ap-
plies when you import something, and then
export it in the same, unused condition. If you
import bicycle tires, and then export them
again without changing them, then you can
get a refund for the duty you paid when you
export the tires.
New duty drawback rules started in 2018
Changes in legislation came into effect in
2018 that significantly broadened the oppor-
tunities for duty drawback claims. The new
legislation allows for broader substitution of
good, which means that instead of needing
to import and export nearly identical items,
you can now import and export items that are
similar and still claim a refund.
In addition, the recent legislation change
made two more significant changes: timeline
and the eligible fees. The new deadline for
duty drawback is five years from import to
filing the claim, which means you could have
years of eligible exports waiting for refunds.
Also, more taxes and fees, such as harbor
maintenance fees and merchandise pro-
cessing fees, can now be refunded for both
manufacturing and unused drawback. That
means additional dollars without additional
work.
Duty Drawback
Unused merchandise duty drawback example

2. You Your competitor
Cost of imported product $100.00 $100.00
Add 10% duty $110.00 $110.00
Add 20% markup $132.00 $132.00
Participating in drawback
program?
Yes No
Duty drawback refund (99%) ($9.90)* $0.00
Export selling price $122.10 $132.00
Starting a duty drawback program may help you grow ex-
port sales with more competitive pricing
a UPS Company
With lots to gain, let’s talk about how duty drawback can
help your company
Duty drawback can be a great source of cash for companies involved with importing and/or ex-
porting. It requires extensive paperwork, and some patience (especially as US Customs works out
procedures for the new legislation), but it can be worth the hard work.
Best of all, you don’t have to be the one doing all of the hard work of duty drawback.
STTAS is committed to helping you get the drawback refund that you deserve from the govern-
ment. In many cases, you don’t pay until you get your money back from the government.
Here’s how you can get started with Duty Drawback
1. Contact your UPS account manager and ask for a Duty Drawback Assessment. This docu-
ment is essential for helping determine the potential benefit from duty drawback.
2. Schedule a session with a drawback expert. Once your assessment has been received, your
UPS account manager will coordinate with our team of drawback experts at STTAS. Together,
we’ll develop a strategy to capture drawback opportunities that your company may qualify for.
We’ll gather the right paperwork, connect the right systems, and take care of all the complicat-
ed filings while you sit back and watch your duty refunds roll in.
Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by STTAS, a UPS Company, UPS Trade Management Services, Inc., or United
Parcel Service of America, Inc. © 2019 STTAS, a UPS Company. All rights reserved. This document is for informational purposes only. It does not constitute legal or business advice. Do not rely on this information without
performing your own research and consulting with your own legal counsel. Your use of this information is at your own risk. In no event will STTAS, a UPS Company, UPS Trade Management Services, Inc., or UPS be liable to
any person or entity for any damages under any theory of law for any errors in this information. 2018067441
*excludes filing fee