I 
109TH CONGRESS 
1ST SESSION H. R. 3363 
To amend the Tariff Act of 1930 relating to drawback. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 20, 2005 
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 relating to drawback. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. DRAWBACK. 
Section 313 of the Tariff Act of 1930 (19 U.S.C. 
1313) is amended to read as follows: 
‘‘SEC. 313. DRAWBACK. 
‘‘(a) DRAWBACK FOR EXPORTED MERCHANDISE.— 
If merchandise is imported into the United States and 
that merchandise or its substitute, whether self-contained 
or contained in drawback merchandise, or drawback mer-
chandise or its substitute, whether self-contained or con-
tained in other drawback merchandise or its substitute,
is subsequently exported, drawback shall be granted if the 
following conditions are met: 
‘‘(1)(A) The exporter of the imported merchan-
dise or its substitute imported the merchandise, or 
received the imported merchandise or its substitute 
directly or indirectly from the importer. 
‘‘(B) The exporter of the drawback merchandise 
or its substitute received drawback merchandise or 
its substitute, or produced drawback merchandise or 
its substitute directly or indirectly. 
‘‘(2) The exported merchandise or its substitute 
is classifiable within the same 8-digit HTS sub-
heading as the imported merchandise. If the ex-
ported merchandise or its substitute is not classifi-
able within the same 8-digit HTS subheading as the 
imported merchandise, the claimant may show by 
records that— 
‘‘(A) the exported merchandise or its sub-
stitute could be classifiable within the same 8- 
digit HTS subheading as the imported mer-
chandise; or 
‘‘(B) the imported merchandise or its sub-
stitute, or drawback merchandise or its sub-
stitute, could be contained in, used in the pro-
duction of, or in any other manner integrated
with, the exported merchandise or its sub-
stitute. 
‘‘(b) DRAWBACK CLAIMANTS.— 
‘‘(1) IN GENERAL.—A drawback claimant may 
be any party, if the following conditions are met: 
‘‘(A) If the claimant is not the importer, 
the claimant has obtained permission from the 
importer to receive drawback for the designated 
import. 
‘‘(B) If the claimant is not the exporter, 
the claimant has obtained permission from the 
exporter to obtain drawback for the designated 
export. 
‘‘(2) JOINT AND SEVERAL LIABILITY.—Import-
ers, 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 
are jointly and severally liable for drawback claims. 
‘‘(c) TIME LIMITATION FOR FILING.—No drawback 
shall be paid unless the drawback claim is filed within 5 
years from the earliest date of importation of the mer-
chandise that is designated on the claim. 
‘‘(d) AMOUNT
OF
DRAWBACK.—The drawback 
amount paid to the claimant shall not exceed the amount 
of duties, taxes, and fees paid on the designated line item.
The exclusive means for determining the amount of draw-
back to be paid to the claimant shall be as follows: 
‘‘(1) For drawback under paragraphs (1)(A) 
and (2)(A) of subsection (a), the lesser of— 
‘‘(A) the amount of the duties, taxes, and 
fees per unit on the line item designated for 
drawback, based upon the entered value of that 
line item, multiplied by the number of units 
claimed; and 
‘‘(B) the amount of the duties, taxes, and 
fees per line item unit that would have been im-
posed on the exported merchandise or its sub-
stitute had such merchandise been imported, 
based upon the value of that exported merchan-
dise or its substitute, multiplied by the number 
of units claimed. 
‘‘(2) For drawback under paragraph (1)(B) and 
(2)(B) of subsection (a), the amount of the duties, 
taxes, and fees per unit on the line item designated 
for drawback, based upon the entered value of that 
line item, multiplied by the number of units claimed. 
‘‘(e) REFUNDS, WAIVERS, OR REDUCTIONS UNDER 
CERTAIN FREE TRADE AGREEMENTS.— 
‘‘(1) NAFTA.—For purposes of subsections (a) 
and (g), if merchandise that is exported to a
NAFTA country is a good subject to NAFTA draw-
back, no customs duties on the merchandise may be 
refunded, waived, or reduced in an amount that ex-
ceeds the lesser of— 
‘‘(A) the total amount of customs duties 
paid or owed on the merchandise on importa-
tion into the United States; or 
‘‘(B) the total amount of customs duties 
paid on the merchandise to the NAFTA coun-
try. 
‘‘(2) CANADA.—If Canada ceases to be a 
NAFTA country and the suspension of the operation 
of the United States-Canada Free-Trade Agreement 
thereafter terminates, then for purposes of sub-
section (a), the shipment to Canada during the pe-
riod such Agreement is in operation of merchandise 
made from or substituted for, as appropriate, draw-
back eligible merchandise under section 204(a) of 
the United States-Canada Free-Trade Implementa-
tion Act of 1988 (19 U.S.C. 2112 note) does not 
constitute an exportation. 
‘‘(3) CHILE.—(A) For purposes of subsections 
(a) and (g), if merchandise that is exported to Chile 
is a good subject to Chile FTA drawback, no cus-
toms duties on the merchandise may be refunded,
waived, or reduced, except as provided in subpara-
graph (B). 
‘‘(B) The customs duties referred to in sub-
paragraph (A) may be refunded, waived, or reduced 
by— 
‘‘(i) 100 percent during the 8-year period 
beginning on January 1, 2004; 
‘‘(ii) 75 percent during the 1-year period 
beginning on January 1, 2012; 
‘‘(iii) 50 percent during the 1-year period 
beginning on January 1, 2013; and 
‘‘(iv) 25 percent during the 1-year period 
beginning on January 1, 2014. 
‘‘(4) FUNGIBLE MERCHANDISE.—(A) The ex-
portation to a NAFTA country of merchandise that 
is fungible with and substituted for imported mer-
chandise, other than merchandise described in para-
graphs (1) through (8) of section 203(a) of that Act, 
shall not constitute an exportation for purposes of 
subsection (a). 
‘‘(B) 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, 
shall not constitute an exportation for purposes of 
paragraph (2). The preceding sentence shall not be 
construed to permit the substitution of unused draw-
back under paragraph (2) of this subsection with re-
spect to merchandise described in paragraph (2) of 
section 203(a) of the United States-Chile Free 
Trade Agreement Implementation Act. 
‘‘(5) TOTAL AMOUNT OF CUSTOMS DUTIES PAID 
OR
OWED.—As used in this subsection, the total 
amount of customs duties paid or owed on the mer-
chandise on importation into the United States 
means the duties, taxes, and fees per unit paid on 
the import line item designated for drawback. 
‘‘(f) MERCHANDISE FOR USE IN VESSELS.—The pro-
visions of this section shall apply to merchandise 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. 
‘‘(g) AGRICULTURAL MERCHANDISE.—No drawback 
shall be available with respect to agricultural merchandise 
subject to over-quota rate of duty established under a tar-
iff-rate quota, except on a direct identification basis when 
such merchandise has not been used in the United States. 
‘‘(h) PUERTO
RICO.—Any drawback authorized 
under this section shall be paid from the customs receipts 
of Puerto Rico if the duties were originally paid into the 
Treasury of Puerto Rico. 
‘‘(i) DESTRUCTION OF MERCHANDISE.— 
‘‘(1) IN
GENERAL.—The exportation require-
ment contained in subsection (a) may be satisfied by 
destroying merchandise, except that drawback mer-
chandise is destroyed in lieu of exportation only if— 
‘‘(A) the merchandise that was imported is 
the actual merchandise that is destroyed; and 
‘‘(B) the claimant directly identifies the ac-
tual merchandise that is destroyed in lieu of ex-
portation. 
‘‘(2) AMOUNT OF DRAWBACK.—For claims filed 
pursuant to this subsection, the drawback paid to 
the claimant shall be the amount of the duties, 
taxes, and fees per line item unit on the imported 
merchandise designated for drawback, whether by 
direct identification or by accounting method, multi-
plied by the number of units claimed. 
‘‘(j) 
LIMITATION
ON
EXPORTATION
REQUIRE-
MENT.—Imported merchandise that has not been regu-
larly entered or withdrawn for consumption does not sat-
isfy the exportation requirement of this section. 
‘‘(k) CLAIMING EXPORTATION OR DESTRUCTION.— 
An exportation or destruction may be claimed on only one 
drawback claim, except that components or ingredients of 
exported or destroyed merchandise that were not claimed 
on one drawback claim covering a certain exportation or 
destruction may be claimed on another drawback claim 
covering that same exportation or destruction. 
‘‘(l) REGULATIONS.—The Secretary of the Treasury 
is authorized to promulgate regulations to carry out this 
section. 
‘‘(m) FLAVORING EXTRACTS; MEDICINAL OR TOILET 
PREPARATIONS; BOTTLED
DISTILLED
SPIRITS
AND 
WINES.— 
‘‘(1) FLAVORING EXTRACTS; MEDICAL OR TOI-
LET PREPARATIONS.—Upon the exportation of fla-
voring extracts, medicinal or toilet preparations (in-
cluding perfumery), manufactured or produced in 
the United States in part from domestic alcohol on 
which an internal revenue 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. 
‘‘(2) DISTILLED
SPIRITS.—Upon the expor-
tation of bottled distilled spirits and wines manufac-
tured 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 pre-
scribed 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 determined on such bottled dis-
tilled spirits and wines. In the case of distilled spir-
its, the preceding sentence shall not apply unless— 
‘‘(A) the claim for drawback is filed by the 
bottler or packager of the spirits; and 
‘‘(B) the spirits have been stamped or re-
stamped, and marked, especially for export, 
under regulations prescribed by the Commis-
sioner of Internal Revenue, with the approval of 
the Secretary of the Treasury. 
‘‘(n) DEFINITIONS.—As used in this section: 
‘‘(1) DRAWBACK.—The term ‘drawback’ means 
a refund of 99 percent of applicable duties, taxes, 
and fees paid pursuant to Federal law upon impor-
tation of merchandise, and not refunded under any 
other law, in a case in which— 
‘‘(A) the imported merchandise or its sub-
stitute, or drawback merchandise or its sub-
stitute, is exported; or
‘‘(B) the imported merchandise is de-
stroyed. 
‘‘(2) HTS.—The term ‘HTS’ means the Har-
monized Tariff Schedule of the United States. 
‘‘(3) NAFTA COUNTRY; GOOD
SUBJECT
TO 
NAFTA
DRAWBACK.—The terms ‘NAFTA country’ 
and ‘good subject to NAFTA drawback’ have the 
meanings given those terms in sections 2(4) and 
203(a), respectively, of the North American Free 
Trade 
Agreement 
Implementation 
(19 
U.S.C. 
3301(4) and 3333(a)). 
‘‘(4) GOOD
SUBJECT
TO
CHILE
FTA
DRAW-
BACK.—The term ‘good subject to Chile FTA draw-
back’ has the meaning given that term in section 
203(a) of the United States-Chile Free Trade Agree-
ment Implementation Act (19 U.S.C. 3805 note). 
‘‘(5) SUBSTITUTE.—Any merchandise may be 
substituted for any other merchandise when the two 
share the same 8-digit HTS subheading. When the 
two do not share the same 8-digit HTS subheading, 
they may be substituted for one another if a claim-
ant can demonstrate that they were both classifiable 
within the same 8-digit HTS subheading during the 
period beginning on the date of importation of the 
merchandise designated for drawback to the date of
the drawback claim. To establish such a nexus, the 
claimant shall submit records with its claim that 
demonstrate the link from one 8-digit HTS sub-
heading to the other 8-digit HTS subheading. 
‘‘(6) FUNGIBLE.—Merchandise is fungible when 
it is commercially identical to other merchandise in 
all instances. 
‘‘(7) LINE ITEM.—The term ‘line item’ means 
the line item on the entry summary or its equivalent 
and a reconfigured entry. 
‘‘(8) CONTAINED IN.—The term ‘contained in’ 
means contained in, used in the production of, or in 
any other manner integrated with, other merchan-
dise. 
‘‘(9) DRAWBACK
MERCHANDISE.—The term 
‘drawback merchandise’ means merchandise in which 
is contained imported merchandise or its substitute, 
or other drawback merchandise or its substitute. 
Drawback merchandise may be exported or de-
stroyed with a claim for drawback, or it may be con-
tained in other drawback merchandise or its sub-
stitute. 
‘‘(10) DIRECTLY IDENTIFY.—The term ‘directly 
identify’ means to identify of merchandise by a
unique identifier such as a serial number or by the 
use of an approved inventory accounting method.’’. 
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