I

107TH CONGRESS

1ST SESSION H. R. 1838

To amend the Tariff Act of 1930 to modify the provisions relating to

drawback claims, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MAY 15, 2001

Mr. BRADY of Texas introduced the following bill; which was referred to the

Committee on Ways and Means

A BILL

To amend the Tariff Act of 1930 to modify the provisions

relating to drawback claims, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 TITLE I—MODIFICATION OF

4 PROVISIONS RELATING TO

5 DRAWBACK CLAIMS

6 SEC. 101. MERCHANDISE NOT CONFORMING TO SAMPLE OR

7 SPECIFICATIONS.

8 Section 313(c) of the Tariff Act of 1930 (19 U.S.C.

9 1313(c)), is amended to read as follows:
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1 ‘‘(c) MERCHANDISE NOT CONFORMING TO SAMPLE

2 OR SPECIFICATIONS.—

3 ‘‘(1) CONDITIONS FOR DRAWBACK.—Upon the

4 exportation or destruction under the supervision of

5 the Customs Service of articles or merchandise—

6 ‘‘(A) upon which the duties have been

7 paid,

8 ‘‘(B) which has been entered or withdrawn

9 for consumption,

10 ‘‘(C) which is—

11 ‘‘(i) not conforming to sample or spec12 ifications, shipped without the consent of

13 the consignee, or determined to be defec14 tive as of the time of importation, or

15 ‘‘(ii) ultimately sold at retail and for

16 any reason returned to and accepted by

17 the importer or the claimant under the

18 provisions of the importer’s or claimant’s

19 merchandise warranty provision, and

20 ‘‘(D) which, within 3 years after the date

21 of importation or withdrawal, as applicable, has

22 been exported or destroyed under the super23 vision of the Customs Service,
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1 the full amount of the duties paid upon such mer2 chandise, less 1 percent, shall be refunded as draw3 back.

4 ‘‘(2) DESIGNATION OF IMPORT ENTRIES.—Not5 withstanding paragraph (1), for purposes of para6 graph (1)(C)(ii), drawback may be claimed by desig7 nating any entry of merchandise that was imported

8 within 1 year before the date of exportation or de9 struction of the merchandise described in paragraph

10 (1) under the supervision of the Customs Service.

11 The returned merchandise, at the time of its impor12 tation, must be commercially interchangeable with

13 the merchandise designated for drawback.

14 ‘‘(3) WHEN DRAWBACK CERTIFICATES NOT RE15 QUIRED.—For purposes of this subsection, drawback

16 certificates are not required if the drawback claim17 ant and the importer are the same party, or if the

18 drawback claimant is a drawback successor to the

19 importer as defined in subsection (s)(3).’’.

20 SEC. 102. TIME LIMITATION ON EXPORTATION OR

21 DESTRUCTION.

22 Section 313(i) of the Tariff Act of 1930 (19 U.S.C.

23 1313(i)), is amended—

24 (1) by striking ‘‘No’’ and inserting ‘‘Unless oth25 erwise provided for in this section, no’’; and
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1 (2) by inserting ‘‘, or destroyed under the su2 pervision of the Customs Service,’’ after ‘‘exported’’.

3 SEC. 103. USE OF DOMESTIC MERCHANDISE ACQUIRED IN

4 EXCHANGE FOR IMPORTED MERCHANDISE

5 OF SAME KIND AND QUALITY.

6 Section 313(k) of the Tariff Act of 1930 (19 U.S.C.

7 1313(k)), is amended—

8 (1) by striking ‘‘(k)’’ and inserting ‘‘(k)(1)’’;

9 and

10 (2) by adding at the end the following new

11 paragraph:

12 ‘‘(2) For purposes of subsections (a) and (b), the use

13 of any domestic merchandise acquired in exchange for a

14 drawback product of the same kind and quality shall be

15 treated as the use of such drawback product if no certifi16 cate of delivery or certificate of manufacture and delivery

17 pertaining to such drawback product is issued, other than

18 that which documents the product’s manufacture and de19 livery. As used in this paragraph, the term ‘drawback

20 product’ means any domestically produced product manu21 factured with imported merchandise that is subject to

22 drawback.’’.

23 SEC. 104. PACKAGING MATERIAL.

24 Section 313(q) of the Tariff Act of 1930 (19 U.S.C.

25 1313(q)), is amended to read as follows:
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1 ‘‘(q) PACKAGING MATERIAL.—

2 ‘‘(1) PACKAGING MATERIAL UNDER SUB3 SECTIONS (c) AND (j).—Packaging material, whether

4 imported and duty paid, and claimed for drawback

5 under either subsection (c) or (j)(1), or imported

6 and duty paid, or substituted, and claimed for draw7 back under subsection (j)(2), shall be eligible for

8 drawback, upon exportation or destruction, of 99

9 percent of any duty, tax, or fee imposed under Fed10 eral law on such imported material.

11 ‘‘(2) PACKAGING MATERIAL UNDER SUB12 SECTIONS (a) AND (b).—Packaging material that is

13 manufactured or produced under subsection (a) or

14 (b) shall be eligible for drawback, upon exportation

15 or destruction, of 99 percent of any duty, tax, or fee

16 imposed under Federal law on the imported or sub17 stituted merchandise used to manufacture or

18 produce such material.

19 ‘‘(3) CONTENTS.—Packaging material described

20 in paragraphs (1) and (2) shall be eligible for draw21 back whether or not they contain articles or mer22 chandise, and whether or not any articles or mer23 chandise they contain are eligible for drawback.

24 ‘‘(4) EMPLOYING PACKAGING MATERIAL FOR

25 ITS INTENDED PURPOSE PRIOR TO EXPORTATION.—
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1 The use of any packaging material for its intended

2 purpose prior to exportation or destruction shall not

3 be treated as a use of such material prior to expor4 tation or destruction for purposes of applying sub5 section (a), (b), or (c), or paragraph (1)(B) or

6 (2)(C)(i) of subsection (j).’’.

7 SEC. 105. LIMITATION ON LIQUIDATION.

8 Section 504 of the Tariff Act of 1930 (19 U.S.C.

9 1504) is amended—

10 (1) by striking subsections (a) and (b) and in11 serting the following:

12 ‘‘(a) LIQUIDATION.—

13 ‘‘(1) ENTRIES FOR CONSUMPTION.—Unless an

14 entry of merchandise for consumption is extended

15 under subsection (b) of this section or suspended as

16 required by statute or court order, except as pro17 vided in section 751(a)(3), an entry of merchandise

18 for consumption not liquidated within 1 year from—

19 ‘‘(A) the date of entry of such merchan20 dise,

21 ‘‘(B) the date of the final withdrawal of all

22 such merchandise covered by a warehouse

23 entry,

24 ‘‘(C) the date of withdrawal from ware25 house of such merchandise for consumption if,
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1 pursuant to regulations issued under section

2 505(a), duties may be deposited after the filing

3 of any entry or withdrawal from warehouse, or

4 ‘‘(D) if a reconciliation is filed, or should

5 have been filed, the date of the filing under sec6 tion 484 or the date the reconciliation should

7 have been filed,

8 shall be deemed liquidated at the rate of duty, value,

9 quantity, and amount of duties asserted at the time

10 of entry by the importer of record. Notwithstanding

11 section 500(e), notice of liquidation need not be

12 given of an entry deemed liquidated.

13 ‘‘(2) ENTRIES OR CLAIMS FOR DRAWBACK.—

14 ‘‘(A) IN GENERAL.—Except as provided in

15 subparagraph (B), unless an entry or claim for

16 drawback is extended under subsection (b) or

17 suspended as required by statute or court order,

18 an entry or claim for drawback not liquidated

19 within 1 year from the date of entry or claim

20 shall be deemed liquidated at the drawback

21 amount asserted by the claimant at the time of

22 entry or claim. Notwithstanding section 500(e),

23 notice of liquidation need not be given of an

24 entry deemed liquidated.
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1 ‘‘(B) EXCEPTION.—An entry or claim for

2 drawback filed before the date of the enactment

3 of this paragraph, the liquidation of which is

4 not final as of the date of the enactment of this

5 paragraph, shall be deemed liquidated on the

6 date that is 1 year after the date of the enact7 ment of this paragraph at the drawback

8 amount asserted by the claimant at the time of

9 the entry or claim.

10 ‘‘(3) PAYMENTS OR REFUNDS.—Payment or re11 fund of duties owed pursuant to paragraph (1) or

12 (2) shall be made to the importer of record or draw13 back claimant, as the case may be, not later than 90

14 days after liquidation.

15 ‘‘(b) EXTENSION.—The Secretary may extend the pe16 riod in which to liquidate an entry if—

17 ‘‘(1) the information needed for the proper ap18 praisement or classification of the imported or with19 drawn merchandise, or for determining the correct

20 drawback amount, or for ensuring compliance with

21 applicable law, is not available to the Customs Serv22 ice; or

23 ‘‘(2) the importer of record or drawback claim24 ant, as the case may be, requests such extension and

25 shows good cause therefor.
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1 The Secretary shall give notice of an extension under this

2 subsection to the importer of record or drawback claimant,

3 as the case may be, and the surety of such importer of

4 record or drawback claimant. Notice shall be in such form

5 and manner (which may include electronic transmittal) as

6 the Secretary shall by regulation prescribe. Any entry the

7 liquidation of which is extended under this subsection shall

8 be treated as having been liquidated at the rate of duty,

9 value, quantity, and amount of duty asserted at the time

10 of entry by the importer of record, or the drawback

11 amount asserted at the time of entry by the drawback

12 claimant, at the expiration of 4 years from the applicable

13 date specified in subsection (a).’’;

14 (2) in subsection (c)—

15 (A) by inserting ‘‘or drawback claimant, as

16 the case may be,’’ after ‘‘to the importer of

17 record’’; and

18 (B) by inserting ‘‘or drawback claimant’’

19 after ‘‘of such importer of record’’; and

20 (3) in subsection (d), by striking the period at

21 the end and inserting ‘‘or (in the case of a drawback

22 entry or claim) at the drawback amount asserted at

23 the time of entry by the drawback claimant.’’.
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1 SEC. 106. PENALTIES FOR FALSE DRAWBACK CLAIMS.

2 Section 593A(h) of the Tariff Act of 1930 (19 U.S.C.

3 1593a(h)) is amended by striking ‘‘subsection (g)’’ and in4 serting ‘‘subsections (c) and (g)’’.

5 SEC. 107. EFFECTIVE DATE.

6 (a) SECTIONS 101, 102, 103, 104, AND 106.—The

7 amendments made by sections 101, 102, 103, 104, and

8 106 shall take effect on the date of the enactment of this

9 Act, and shall apply to—

10 (1) any drawback entry filed on and after such

11 date of enactment; and

12 (2) any drawback entry filed before such date

13 of enactment if the liquidation of the entry is not

14 final on such date of enactment.

15 (b) SECTION 105.—The amendments made by sec16 tion 105 shall take effect on the date of the enactment

17 of this Act, and shall apply to—

18 (1) any entry of merchandise for consumption

19 or entry or claim for drawback filed on and after

20 such date of enactment; and

21 (2) any entry or claim for drawback filed before

22 such date of enactment if the liquidation of the

23 entry or claim is not final on such date of enact24 ment.
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1 TITLE II—LIQUIDATION OR RE2 LIQUIDATION OF CERTAIN

3 ENTRIES

4 SEC. 201. LIQUIDATION OR RELIQUIDATION OF CERTAIN

5 ENTRIES.

6 (a) IN GENERAL.—Notwithstanding section 514 of

7 the Tariff Act of 1930 (19 U.S.C. 1514) or any other pro8 vision of law, and subject to subsection (b), the United

9 States Customs Service shall, not later than 180 days

10 after the receipt of the request described in subsection (b),

11 liquidate or reliquidate each entry described in subsection

12 (d) by applying the column 1 general rate of duty of the

13 Harmonized Tariff Schedule of the United States to each

14 entry that is liquidated or reliquidated, regardless of

15 whether the entry was made under the column 1 special

16 rate of duty of such schedule.

17 (b) REQUESTS.—Liquidation or reliquidation may be

18 made under subsection (a) with respect to an entry de19 scribed in subsection (d) only upon a request therefor is

20 filed with the Customs Service.

21 (c) PAYMENT OF AMOUNTS DUE.—Any amounts due

22 to the United States pursuant to the liquidation or reliqui23 dation of an entry under subsection (a) shall be paid not

24 later than 180 days after the date of such liquidation or

25 reliquidation.
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1 (d) AFFECTED ENTRIES.—The entries referred to in

2 subsection (a), filed at the ports of Laredo, Texas (des3 ignated as port of entry 2304), Hidalgo, Texas (des4 ignated as port of entry 2305), and Wilmington, Delaware

5 (designated as port of entry 1103), are as follows:

Entry number Port of Entry Date of Entry

95300618568 2305 02/22/95

95300618576 2305 02/22/95

95300619236 2305 02/27/95

95300619277 2305 02/27/95

95300619806 2305 03/02/95

95300619871 2305 03/02/95

95300620142 2305 03/07/95

95300620176 2305 03/03/95

95300620184 2305 03/03/95

95300620911 2305 03/07/95

95300635133 2305 04/07/95

95300635141 2305 04/07/95

95300635950 2305 04/12/95

95300635968 2305 04/12/95

95300636370 2305 04/14/95

95300636388 2305 04/14/95

95300640554 2305 05/09/95

95300640653 2305 05/10/95

95300656592 2304 11/05/95

95300657665 2304 11/29/95

95300657756 2304 12/02/95

95300658358 2304 12/16/95

95300658408 2304 12/17/95

95300658572 2304 12/19/95

95300658648 2304 12/22/95

95300658754 2304 12/22/95

95300658945 2304 12/27/95

95300659018 2304 12/28/95

95300659117 2304 12/29/95

95300659208 2304 01/02/96

95300659398 2304 01/05/96

95300659513 2304 01/08/96

95300659547 2304 01/09/96

95300659679 2304 01/11/96

95300659737 2304 01/14/96

95300659794 2304 01/13/96

95300659810 2304 01/14/96

95300659844 2304 01/15/96

95300659851 2304 01/15/96

95300659901 2304 01/16/96

95300659919 2304 01/16/96

95300659935 2304 01/17/96

95300660065 2304 01/18/96

95300660107 2304 01/19/96

95300660172 2304 01/22/96

95300660180 2304 01/22/96

95300660248 2304 01/22/96

95300660362 2304 01/23/96

95300660388 2304 01/24/96

95300660560 2304 01/25/96

95300660743 2304 01/27/96

95300660818 2304 01/29/96
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Entry number Port of Entry Date of Entry

95300660826 2304 01/29/96

95300704053 2305 05/16/95

95300704061 2305 05/16/95

95300704889 2305 05/22/95

95300704897 2305 05/22/95

95300705886 2305 05/31/95

95300705969 2305 05/30/95

95300706900 2305 06/09/95

95300706926 2305 06/09/95

95300752656 2305 02/02/96

95300752698 2305 02/04/96

95300752805 2305 02/05/96

95300752813 2305 02/05/96

95300752870 2305 02/06/96

95300752904 2305 02/06/96

95300753001 2305 02/07/96

95300753076 2305 02/09/96

R7410350736 1103 11/29/95

R7410350769 1103 11/29/95

R7410350801 1103 11/29/95

R7410350835 1103 11/29/95

T8500081575 2305 06/16/95

T8500081591 2305 06/16/95

T8500081716 2305 06/20/95

T8500081724 2305 06/20/95

T8500081815 2305 06/27/95

T8500081823 2305 06/28/95

T8500081922 2305 06/27/95

T8500081930 2305 06/27/95

T8500082052 2305 07/01/95

T8500082060 2305 07/01/95

T8500082326 2305 07/14/95

T8500082342 2305 07/14/95

T8500082458 2305 07/22/95

T8500082482 2305 07/22/95

T8500082508 2305 07/24/95

T8500082516 2305 07/24/95

T8500082581 2305 07/30/95

T8500082599 2305 07/30/95

T8500082656 2305 08/03/95

T8500082664 2305 08/03/95

T8500082748 2305 08/09/95

T8500082797 2305 08/10/95

T8500082839 2305 08/14/95

T8500082847 2305 08/14/95

T8500084462 2305 10/22/95

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