203(a) of the United States-Chile Free Trade Agree-
ment Implementation Act (19 U.S.C. 3805 note). 
‘‘(7) GOOD SUBJECT TO NAFTA DRAWBACK.— 
The term ‘good subject to NAFTA drawback’ has 
the meaning given that term in section 203(a) of the 
North American Free Trade Agreement Implemen-
tation Act (19 U.S.C. 3333(a)). 
‘‘(8) HTS.—The term ‘HTS’ means the Har-
monized Tariff Schedule of the United States (19 
U.S.C. 1202). 
‘‘(9) INCORPORATED INTO.—The term ‘incor-
porated into’ means any operation by which mer-
chandise or an article becomes classifiable in a dif-
ferent 8-digit HTS subheading number. 
‘‘(10) 
INDIRECTLY.—The 
term 
‘indirectly’ 
means a transfer of merchandise or an article from 
1 person to another person with 1 or more inter-
mediate transfers. 
‘‘(11) LINE ITEM.— 
‘‘(A) IMPORT
ENTRY.—The term ‘line 
item’ means, for an import entry filed pursuant 
to section 484, the identification of a com-
modity from 1 country by net quantity, entered 
value, HTS subheading number, and applicable 
duties, fees, and taxes. 
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‘‘(B) DESIGNATED
EXPORT.—The term 
‘line item’ means, for a designated export, the 
identification of a commodity by HTS sub-
heading number or Schedule B number, de-
clared value, and quantity. 
‘‘(12) NAFTA
COUNTRY.—The term ‘NAFTA 
country’ has the meaning given that term in section 
2 of the North American Free Trade Agreement Im-
plementation Act (19 U.S.C. 3301). 
‘‘(13) SCHEDULE B.—The term ‘Schedule B’ 
means the Department of Commerce Schedule B, 
Statistical Classification of Domestic and Foreign 
Commodities Exported from the United States. 
‘‘(14) SECRETARY.—Except as otherwise pro-
vided, the term ‘Secretary’ means the Secretary of 
Homeland Security. 
‘‘(15) SUBSTITUTE MERCHANDISE; SUBSTITUTE 
ARTICLE.—The terms ‘substitute merchandise’ and 
‘substitute article’ mean— 
‘‘(A) a good that is classifiable within the 
same 8-digit HTS subheading number as an-
other good (the Schedule B number may be 
used to demonstrate this fact); 
‘‘(B) a good demonstrated to have been 
classifiable within the same 8-digit HTS sub-
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heading number as another good at some point 
during the 5-year period beginning on the date 
of importation of the designated imported mer-
chandise (the Schedule B number may be used 
to demonstrate this fact); or 
‘‘(C) for goods classifiable under headings 
2710 or 3901 through 3914 of the HTS, a 
good demonstrated to have been classifiable 
under the same 8-digit HTS subheading num-
ber as another good according to the HTS in 
effect on January 1, 2000 (the Schedule B 
number may be used to demonstrate this fact). 
‘‘(b) IN GENERAL.— 
‘‘(1) DRAWBACK.—If merchandise is imported 
into the United States and that merchandise, or 
substitute merchandise, is then exported, or is incor-
porated into an article that is exported, or a sub-
stitute article is exported, duties, fees, and taxes 
paid upon entry or importation of the merchandise 
shall be refunded as drawback pursuant to this sec-
tion notwithstanding any other provision of law. 
‘‘(2) ELIGIBILITY
FOR
DRAWBACK
FOR
MER-
CHANDISE
INCORPORATED
INTO
MULTIPLE
ARTI-
CLES.—Merchandise described in paragraph (1) that 
is incorporated into an article that is exported shall 
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be eligible for drawback under this section regardless 
of the number of times that the merchandise is in-
corporated into an article or an article is incor-
porated into another article. 
‘‘(c) ELIGIBILITY TO CLAIM DRAWBACK.— 
‘‘(1) PERSON MAKING CLAIM.—A person may 
claim drawback under this section if the person— 
‘‘(A)(i) imports the merchandise on which 
the claim is based; or 
‘‘(ii) obtains the importer’s permission to 
claim the drawback; and 
‘‘(B) exports the merchandise or article on 
which the claim is based or obtains the export-
er’s permission to claim drawback. 
‘‘(2) SPECIAL RULES.— 
‘‘(A) IN
GENERAL.—When the exporter 
and importer are not the same party, the ex-
porter shall have received the imported mer-
chandise, substitute merchandise, imported or 
substitute merchandise incorporated into an ar-
ticle, or substitute article, directly or indirectly 
from the importer. 
‘‘(B) RULES FOR TRANSFER.—The trans-
fer of drawback rights under this section shall 
be a private transaction between parties that 
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shall not be required to be governed by this sec-
tion or by regulations promulgated under the 
authority of this section, and U.S. Customs and 
Border Protection of the Department of Home-
land Security shall not be required to verify any 
transfer of merchandise or article under this 
subsection. 
‘‘(3) CLAIM FOR DRAWBACK ON MERCHANDISE 
INCORPORATED.—If drawback is claimed for mer-
chandise incorporated into an article, the person 
making the claim shall submit a bill of materials or 
formula identifying the merchandise and article by 
the 8-digit HTS subheading number and the quan-
tity of the merchandise. Merchandise shall be 
deemed incorporated into an article if the bill of ma-
terials or formula for that article includes such mer-
chandise. 
‘‘(4) ELECTRONIC FILING.—A claim for draw-
back under this section shall be made through an 
electronic data interchange system authorized by the 
Secretary. Such system may include an Internet- 
based system. 
‘‘(5) TIME LIMIT FOR CLAIM.—Drawback may 
be paid under this section only if the claim for draw-
back is filed within 5 years after the date the mer-
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chandise was imported. If the merchandise has mul-
tiple dates of importation, the earliest date of impor-
tation shall be used for purposes of this paragraph. 
‘‘(d) AMOUNT OF DRAWBACK.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2) and except for drawback claims filed pur-
suant to subsection (g)(2), the amount of a draw-
back made pursuant to this section shall be the 
number of units claimed times the lesser of— 
‘‘(A) the average of the duties, taxes, and 
fees paid per unit of the designated import line 
item, or 
‘‘(B) the average declared value per unit of 
the designated export line item times the duties, 
taxes, and fees that applied to the designated 
import line item, 
less 1 percent. 
‘‘(2) EXCEPTION.—Where drawback is claimed 
based upon imported merchandise or substitute mer-
chandise being incorporated into an article, the 
drawback amount shall be the number of units of 
merchandise claimed times the average duties, taxes, 
and fees per unit of the designated import line item, 
less 1 percent. 
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priate, a drawback eligible good under section 
204(a) of the United States-Canada Free-Trade Im-
plementation Act of 1988 (19 U.S.C. 1212 note) 
does not constitute an exportation. 
‘‘(3) SPECIAL RULE FOR CHILE.— 
‘‘(A) IN GENERAL.—For purposes of sub-
sections (b) and (g)(1), if an article that is ex-
ported to Chile is a good subject to Chile FTA 
drawback, no customs duties on the good may 
be refunded, waived, or reduced, except as pro-
vided in subparagraph (B). 
‘‘(B) AMOUNT OF CUSTOMS DUTIES.—The 
customs duties referred to in subparagraph (A) 
may be refunded, waived, or reduced by— 
‘‘(i) 100 percent during the 8-year pe-
riod beginning on January 1, 2004; 
‘‘(ii) 75 percent during the 1-year pe-
riod beginning on January 1, 2012; 
‘‘(iii) 50 percent during the 1-year pe-
riod beginning on January 1, 2013; and 
‘‘(iv) 25 percent during the 1-year pe-
riod beginning on January 1, 2014. 
‘‘(4) FUNGIBLE MERCHANDISE EXPORTED TO 
NAFTA
COUNTRY.—The exportation to a NAFTA 
country of merchandise that is fungible with and 
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substituted for imported merchandise, other than 
merchandise described in paragraphs (1) through 
(8) of section 203(a) of the North American Free 
Trade Agreement Implementation Act (19 U.S.C. 
3333(a)), shall not constitute an exportation for 
purposes of subsection (b). 
‘‘(5) FUNGIBLE MERCHANDISE EXPORTED TO 
CHILE.—Beginning on January 1, 2015, the expor-
tation to Chile of merchandise that is fungible with, 
and substituted for imported merchandise, other 
than merchandise described in paragraphs (1) 
through (5) of section 203(a) of the United States- 
Chile Free Trade Agreement Implementation Act 
(19 U.S.C. 3805 note), shall not constitute an ex-
portation for purposes of subsection (b). The pre-
ceding sentence shall not be construed to permit the 
substitution of unused drawback under subsection 
(b) of this section with respect to merchandise de-
scribed in paragraph (2) of section 203(a) of the 
United States-Chile Free Trade Agreement Imple-
mentation Act. 
‘‘(f) PROOF OF EXPORTATION.—A person claiming 
drawback under this section shall submit to the Secretary 
proof of the exportation by submitting at least 1 of the 
following: 
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‘‘(1) The appropriate record from the United 
States Government automated export system, or evi-
dence of the equivalent information if such system 
was unable to report the exportation. 
‘‘(2) Export documentation issued in the nor-
mal course of business. 
‘‘(3) If the drawback claims filed pursuant to 
paragraph (1), (2), or (4) of subsection (e), the Ca-
nadian or Mexican entry records. 
‘‘(4) For a deemed exportation, any record that 
establishes the fact of deemed exportation that in-
cludes a description of the article or merchandise by 
the 8-digit HTS subheading number (or equivalent 
Schedule B number) under which the article or mer-
chandise would be classifiable, quantity, and de-
clared value. 
‘‘(g) SPECIAL ELIGIBILITY RULES.— 
‘‘(1) VESSELS
BUILT
FOR
RESIDENTS
OF
A 
FOREIGN COUNTRY.—Drawback under this section 
may be claimed for materials imported and used in 
the construction and equipment of vessels built for 
foreign account and ownership, or for the govern-
ment of any foreign country, notwithstanding that 
such vessels may not within the strict meaning of 
the term be exported. 
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‘‘(2) DESTROYED MERCHANDISE.— 
‘‘(A) 
ELIGIBILITY
FOR
DRAWBACK.— 
Drawback under this section may be claimed 
for— 
‘‘(i) imported merchandise, 
‘‘(ii) an article incorporating the im-
ported merchandise, or 
‘‘(iii) substitute merchandise, 
that is not exported because it was destroyed. 
‘‘(B) AMOUNT OF DRAWBACK.—Subject to 
subparagraph (C), the amount of drawback 
paid for a claim filed pursuant to subparagraph 
(A) shall be— 
‘‘(i) the average entered value per unit 
of merchandise, multiplied by 
‘‘(ii) the duty, tax, and fee applicable 
to the designated line item of the merchan-
dise, multiplied by 
‘‘(iii) the number of units claimed, 
minus 1 percent. 
‘‘(C) 
OFFSETTING
AMOUNTS.—The 
amount of duties, taxes, and fees to be refunded 
pursuant to this paragraph shall not include 
any duties, taxes, and fees previously refunded 
to an importer of record or the person claiming 
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drawback. The value of the imported merchan-
dise on which drawback is claimed shall be re-
duced by the value of any recovered materials 
(including the value of any tax benefit or roy-
alty payment). 
‘‘(3) AGRICULTURAL PRODUCTS.—No drawback 
under this section may be claimed for an agricul-
tural product subject to over-quota rate of duty es-
tablished under a tariff-rate quota, except under a 
direct identification basis and when such product 
has not been used in the United States. 
‘‘(4) MERCHANDISE
NOT
REGULARLY
EN-
TERED.—Imported merchandise that has not been 
regularly entered or withdrawn for consumption 
shall not satisfy the exportation or destruction re-
quirements of this section. 
‘‘(5) FLAVORING
EXTRACTS, MEDICINAL, OR 
TOILET
PREPARATIONS; DISTILLED
SPIRITS
AND 
WINES.— 
‘‘(A) FLAVORING
EXTRACTS, MEDICINAL, 
OR TOILET PREPARATIONS.—Upon the expor-
tation of flavoring extracts, medicinal, or toilet 
preparations (including perfumery) manufac-
tured or produced in the United States in part 
from domestic alcohol on which an internal rev-
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enue tax has been paid, there shall be allowed 
a drawback equal in amount to the tax found 
to have been paid on the alcohol so used. 
‘‘(B) DISTILLED SPIRITS AND WINES.— 
‘‘(i) IN GENERAL.—If distilled spirits 
and wines are imported into the United 
States and such spirts and wines, or sub-
stitute merchandise, are then exported, or 
are incorporated into an article that is ex-
ported, or a substitute article is exported, 
duties, fees, and taxes imposed upon entry 
or importation shall be refunded as draw-
back pursuant to subsection (b) notwith-
standing any other provision of law. 
‘‘(ii) TAX
ON
BOTTLED
DISTILLED 
SPIRITS
AND
WINES.—Upon the expor-
tation of bottled distilled spirits and wines 
manufactured or produced in the United 
States on which an internal revenue tax 
has been paid or determined, there shall be 
allowed, under regulations to be prescribed 
by the Commissioner of Internal Revenue, 
with the approval of the Secretary of the 
Treasury, a drawback equal in amount to 
the tax found to have been paid or deter-
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mined on such bottled distilled spirits and 
wines. In the case of distilled spirits, the 
preceding sentence shall not apply unless 
the claim for drawback is filed by the 
bottler or packager of the spirits and un-
less such spirits have been stamped or re-
stamped, and marked, especially for ex-
port, under regulations prescribed by the 
Commissioner of Internal Revenue, with 
the approval of the Secretary of the Treas-
ury. 
‘‘(h) PROHIBITION ON OTHER CLAIMS FOR DRAW-
BACK.—Merchandise that is exported or destroyed to sat-
isfy any claim for drawback shall not be the basis of any 
other claim for drawback, except that appropriate credit 
and deductions for claims covering components or ingredi-
ents of such merchandise shall be made in computing 
drawback payments. 
‘‘(i) LIABILITY FOR CLAIM.—Importers, up to the 
amount of duties, taxes, and fees on the designated import 
permitted by the importer for drawback by the claimant, 
and drawback claimants, for the full amount of the claim, 
are jointly and severally liable to the United States for 
drawback claims. In implementing this section, the Sec-
retary shall provide by regulation that the United States 
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attempt to recover from the drawback claimant before at-
tempting to recover from the importer. 
‘‘(j) PAYMENT FROM RECEIPTS OF PUERTO RICO.— 
A drawback under this section for merchandise shall be 
paid from the customs receipts of Puerto Rico if the duties 
for such merchandise were originally paid into the Treas-
ury of Puerto Rico.’’. 
(b) REPORT.— 
(1) IN GENERAL.—Not later than 1 year after 
the date the drawback processing module is oper-
ational and the Automated Commercial Environment 
becomes the exclusive system of record nationally for 
drawback entries, the Commissioner of the Bureau 
of Customs and Border Protection shall submit to 
the Committee on Finance of the Senate and the 
Committee on Ways and Means of the House of 
Representatives a report that evaluates the utiliza-
tion of direct identification in drawback claims, in-
cluding measurement of the number of non-NAFTA, 
nondestruction claims filed using direct identifica-
tion, and the impact on personnel allocation within 
the Bureau. 
(2) AUTOMATED
COMMERCIAL
ENVIRONMENT 
DEFINED.—In this subsection, the term ‘‘Automated 
Commercial Environment’’ means the automated 
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trade processing system designed to collect, process, 
and analyze commercial import and export data to 
facilitate international trade and travel. 
(c) TECHNICAL AND CONFORMING AMENDMENTS.— 
(1) REFUNDS.—Section 505(b) of the Tariff 
Act of 1930 (19 U.S.C. 1505(b)), is amended by 
adding at the end the following: ‘‘Refunds of excess 
moneys deposited, as determined on a liquidation or 
reliquidation, shall be reduced by any amount paid, 
on an accelerated basis or otherwise, to a drawback 
claimant pursuant to section 313.’’. 
(2) REVIEW OF PROTESTS.—The second sen-
tence of section 515(a) of the Tariff Act of 1930 (19 
U.S.C. 1515(a)) is amended by striking the period 
at the end and inserting ‘‘in accordance with section 
505.’’. 
(d) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall take effect on the date that the Commissioner 
of the Bureau of Customs and Border Protection 
publishes a finding that the Automated Commercial 
Environment (as defined in subsection (b)(2)) is the 
exclusive system of record in the United States for 
entry summaries and shall apply to drawback claims 
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designating import entry summaries or reconfigured 
entries that are filed on or after that date. 
(2) EXCEPTION.—Subsection (a)(15) of section 
313 of the Tariff Act of 1930 (relating to definitions 
of the terms ‘‘substitute merchandise’’ and ‘‘sub-
stitute article’’), as added by subsection (a) of this 
section, shall take effect on the date of the enact-
ment of this Act and shall apply for purposes of de-
termining commercial interchangeability for unused 
merchandise drawback claims filed pursuant to sub-
section (j)(2) of such section on or after the date of 
the enactment of this Act but before the effective 
date described in paragraph (1). 
Æ 
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