This subpart sets forth the provisions regarding drawback claims and duty-deferral programs under Article 2.5 of the USMCA and applies to any good that is a “good subject to USMCA drawback” within the meaning of 19 U.S.C. 4534. The provisions of this subpart apply to goods which are entered for consumption, or withdrawn from warehouse for consumption, into the United States on or after July 1, 2020. The requirements and procedures set forth in this subpart for USMCA drawback are in addition to the general definitions, requirements, and procedures for all drawback claims set forth in part 190 of this chapter, unless otherwise specifically provided in this subpart. Also, the requirements and procedures set forth in this subpart for USMCA duty-deferral programs are in addition to the requirements and procedures for manipulation, manufacturing, and smelting and refining warehouses contained in part 19 and part 144 of this chapter, for foreign trade zones under part 146 of this chapter, and for temporary importations under bond contained in part 10 of this chapter.

The following duties or fees which may be applicable to a good entered for consumption or withdrawn from warehouse for consumption in the Customs territory of the United States are not subject to drawback under this subpart:

(a) Antidumping and countervailing duties;

(b) A premium offered or collected on a good with respect to quantitative import restrictions, tariff-rate quotas or tariff preference levels; and

(c) Customs duties paid or owed under unused merchandise substitution drawback. There will be no payment of such drawback under 19 U.S.C. 1313(j)(2) on goods exported to Canada or Mexico.

Except as otherwise provided in this subpart, drawback is authorized for an imported good that is entered for consumption and is:

(a) Subsequently exported to Canada or Mexico (see 19 U.S.C. 1313(j)(1));

(b) Used as a material in the production of another good that is subsequently exported to Canada or Mexico (see 19 U.S.C. 1313(a)); or

(c) Substituted by a good of the same kind and quality as defined in § 182.44(d) and used as a material in the production of another good that is subsequently exported to Canada or Mexico (see 19 U.S.C. 1313(b)).

(a) General. Except in the case of goods specified in § 182.45, drawback of the duties previously paid upon importation of a good into the United States may be granted by the United States, upon presentation of a USMCA drawback claim under this subpart, on the lower amount of:

(1) The total duties paid or owed on the good in the United States; or

(2) The total amount of duties paid on the exported good upon subsequent importation into Canada or Mexico.

(b) Individual relative value and duty comparison principle. For purposes of this section, relative value will be determined, and the comparison between the duties referred to in paragraph (a)(1) of this section and the duties referred to in paragraph (a)(2) of this section will be made, separately with reference to each individual exported good, including where two components or materials are used to produce one exported good or one component or material is divided among multiple exported goods.

(c) Direct identification manufacturing drawback under 19 U.S.C. 1313(a). Upon presentation of the USMCA drawback claim under 19 U.S.C. 1313(a), in which the amount of drawback payable is based on the lesser amount of the customs duties paid on the good either to the United States or to Canada or Mexico, the amount of drawback refunded may not exceed 99 percent of the duty paid on such imported merchandise into the United States.

(d) Substitution manufacturing drawback under 19 U.S.C. 1313(b). Upon presentation of a USMCA drawback claim under 19 U.S.C. 1313(b), on which the amount of drawback payable is based on the lesser amount of the customs duties paid on the good either to the United States or to Canada or Mexico, the amount of drawback is the same as that which would have been allowed had the substituted merchandise used in manufacture been itself imported.

(1) General. For purposes of drawback under this subpart, the term “same kind and quality” has the same meaning as the 8-digit HTSUS substitution standard established in 19 U.S.C. 1313(b)(1) (see §§ 190.2 and 190.22(a)(1)(i) of this chapter).

(2) Special rule for sought chemical elements. For purposes of drawback under this subpart, for sought chemical elements, the term “same kind and quality” has the same meaning as the 8-digit HTSUS substitution standard established in 19 U.S.C. 1313(b)(4) (see § 190.22(a)(2) of this chapter).

(e) Meats cured with imported salt. Meats, whether packed or smoked, which have been cured with imported salt may be eligible for drawback in aggregate amounts of not less than $100 in duties paid on the imported salt upon exportation of the meats to Canada or Mexico (see 19 U.S.C. 1313(f)).

(f) Jet aircraft engines. A foreign-built jet aircraft engine that has been overhauled, repaired, rebuilt, or reconditioned in the United States with the use of imported merchandise, including parts, may be eligible for drawback of duties paid on the imported merchandise in aggregate amounts of not less than $100 upon exportation of the engine to Canada or Mexico (19 U.S.C. 1313(h)).

(g) Unused goods under 19 U.S.C. 1313(j)(1) that have changed in condition. An imported good that is unused in the United States under 19 U.S.C. 1313(j)(1) and that is shipped to Canada or Mexico not in the same condition within the meaning of § 182.45(b)(1) may be eligible for drawback under this section except when the shipment to Canada or Mexico does not constitute an exportation under 19 U.S.C. 1313(j)(4).

(a) Goods originating in Canada or Mexico. A Canadian or Mexican originating good that is dutiable and is imported into the United States is eligible for drawback without regard to the limitation on drawback set forth in § 182.44 if that good is originating under the rules of origin set out in General Note 11, HTSUS, and Appendix A of this part, and is:

(1) Subsequently exported to Canada or Mexico;

(2) Used as a material in the production of another good that is subsequently exported to Canada or Mexico; or

(3) Substituted by a good of the same 8-digit HTSUS subheading number and used as a material in the production of another good that is subsequently exported to Canada or Mexico.

(b) Claims under 19 U.S.C 1313(j)(1) for goods in same condition. A good imported into the United States and subsequently exported to Canada or Mexico in the same condition is eligible for drawback under 19 U.S.C. 1313(j)(1) without regard to the limitation on drawback set forth in § 182.44 .

(1) Same condition defined. For purposes of this subpart, a reference to a good in

the “same condition” includes a good that has been subjected to any of the following operations provided that no such operation materially alters the characteristics of the good:

(i) Mere dilution with water or another substance;

(ii) Cleaning, including removal of rust, grease, paint or other coatings;

(iii) Application of preservative, including lubricants, protective encapsulation, or preservation paint;

(iv) Trimming, filing, slitting or cutting;

(v) Putting up in measured doses, or packing, repacking, packaging or repackaging; or

(vi) Testing, marking, labelling, sorting, grading, or inspecting a good.

(2) Commingling of fungible goods—(i) General—(A) Inventory of other than all non-originating goods. Commingling of fungible originating and non-originating goods in inventory is permissible provided that the origin of the goods and the identification of entries for designation for same condition drawback are on the basis of an approved inventory management method set forth in the Appendix A to this part (see 19 CFR 102.1).

(B) Inventory of the non-originating goods. If all goods in a particular inventory are non-originating goods, identification of entries for designation for same condition drawback must be on the basis of one of the accounting methods in § 190.14 of this chapter, as appropriate.

(ii) Exception. Agricultural goods imported from Mexico may not be commingled with fungible agricultural goods in the United States for purposes of same condition drawback under this subpart.

(c) Goods not conforming to sample or specifications or shipped without consent of consignee under 19 U.S.C. 1313(c). An imported good exported to Canada or Mexico by reason of failure of the good to conform to sample or specification or by reason of shipment of the good without the consent of the consignee is eligible for drawback under 19 U.S.C. 1313(c) without regard to the limitation on drawback set forth in § 182.44. Such a good must be exported or destroyed within the statutory 5-year time period and in compliance with the requirements set forth in subpart D of part 190 of this chapter, as applicable.

(d) Certain goods exported to Canada or Mexico. A good provided for in U.S. tariff items 1701.13.20 or 1701.14.20 that is imported into the Customs territory of the United States under any re-export or like program that is used as a material, or substituted for by a good of the same kind and quality that is used as a material, in the production of a good provided for in Canadian tariff item 1701.99.00 or Mexican tariff items 1701.99.01, 1701.99.02, and 1701.99.99 (relating to refined sugar), is eligible for drawback without regard to the limitation on drawback set forth in § 182.44. Same kind and quality for purposes of this subsection means that the imported good and the substituted good must be capable of being used interchangeably in the manufacture or production of the exported or destroyed articles with no substantial change in the manufacturing or production process.

(e) Certain goods exported to Canada. Goods identified in Article 2.5.6(g) of the USMCA and in 19 U.S.C. 4534(a)(7) and (8), if exported to Canada, are eligible for drawback without regard to the limitations on drawback set forth in § 182.44.

(f) Certain goods that are exported or deemed exported. Goods that are delivered:

(1) To a duty-free shop,

(2) For ship's stores or supplies for ships or aircrafts, or

(3) For the use in a project undertaken jointly by the United States and a USMCA country, and destined to become the property of the United States, are eligible upon exportation for drawback without regard to the limitations on drawback set forth in § 182.44.

(a) Time of filing. A drawback claim under this subpart must be filed within 5 years after the date of importation of the goods on which drawback is claimed. No extension will be granted unless it is established that a CBP official was responsible for the untimely filing. Drawback will be allowed only if the completed good is exported within 5 years after importation of the merchandise identified or designated to support the claim.

(b) Method of filing. A drawback claim must be filed electronically through a CBP-authorized electronic system (see § 190.51 of this chapter).

(a) General. A claim for drawback will be granted, upon the submission of appropriate documentation to substantiate compliance with the drawback laws and regulations of the United States, evidence of exportation to Canada or Mexico, and satisfactory evidence of the payment of duties to Canada or Mexico. Unless otherwise provided in this subpart, the documentation, filing procedures, time and place requirements and other applicable procedures required to determine whether a good qualifies for drawback must be in accordance with the provisions of part 190 of this chapter, as appropriate; however, a drawback claim subject to the provisions of this subpart must be filed separately from any part 190 drawback claim (that is, a claim that involves goods exported to countries other than Canada or Mexico). Claims inappropriately filed or otherwise not completed within the periods specified in § 182.46 will be considered abandoned.

(b) Complete drawback claim—(1) General. A complete drawback claim under this subpart must consist of the filing of the appropriate completed drawback entry, evidence of exportation (a copy of the Canadian or Mexican customs entry showing the amount of duty paid to Canada or Mexico) and its supporting documents, and a certification from the Canadian or Mexican importer as to the amount of duties paid. Each drawback entry filed under this subpart must be filed using the indicator “USMCA Drawback”.

(2) Specific claims. The following documentation, for the drawback claims specified below, must be submitted to CBP in order for a drawback claim to be processed under this subpart. Missing documentation or incorrect or incomplete information on required customs forms or supporting documentation will result in an incomplete drawback claim.

(i) Manufacturing drawback claim. The following must be submitted in connection with a claim for direct identification manufacturing drawback or substitution manufacturing drawback:

(A) A completed CBP Form 331, or its electronic equivalent, to establish the manufacture of goods made with imported merchandise and, if applicable, the identity of substituted domestic, duty-paid or duty-free merchandise, and including the tariff classification number of the imported merchandise;

(B) CBP Form 7501, or its electronic equivalent, or the import entry number;

(C) [Reserved]

(D) Evidence of exportation and satisfactory evidence of the payment of duties in Canada or Mexico, as provided in paragraph (c) of this section;

(E) Waiver of right to drawback. If the person exporting to Canada or Mexico was not the importer or the manufacturer, written waivers executed by the importer or manufacturer and by any intervening person to whom the good was transferred must be submitted in order for the claim to be considered complete; and

(F) An affidavit of the party claiming drawback stating that no other drawback claim has been made on the designated goods, that such party has not provided an exporter's certification of origin pertaining to the exported goods to another party except as stated on the drawback claim, and that the party agrees to notify CBP if the party subsequently provides such an exporter's certification of origin to any person.

(ii) Same condition drawback claim under 19 U.S.C. 1313(j)(1). The following must be submitted in connection with a drawback claim covering a good in the same condition:

(A) The foreign entry number and date of entry, the HTSUS classification for the foreign entry, the amount of duties paid for the foreign entry and the applicable exchange rate, and, if applicable, a certification from the claimant that provides as follows: “Same condition—The undersigned certifies that the merchandise herein described is in the same condition as when it was imported under the above import entry(s) and further certifies that this merchandise was not subjected to any process of manufacture or other operation except the allowable operations as provided for by regulation.”;

(B) Information sufficient to trace the movement of the imported goods after importation;

(C) In-bond application submitted pursuant to part 18 of this chapter, if applicable. This is required for merchandise which is examined at one port but exported through border points outside of that port. Such goods must travel in bond from the location where they were examined to the point of the border crossing (exportation). If examination is waived, in-bond transportation is not required;

(D) Notification of intent to export or waiver of prior notice. CBP must be notified at least 5 business days in advance of the intended date of exportation in order to have the opportunity to examine the goods (see § 190.35 of this chapter);

(E) Evidence of exportation. Acceptable documentary evidence of exportation to Canada or Mexico may include originals or copies of any of the following documents that are issued by the exporting carrier: bill of lading, air waybill, freight waybill, export ocean bill of lading, Canadian customs manifest, and cargo manifest. Supporting documentary evidence must establish fully the time and fact of exportation, the identity of the exporter, and the identity and location of the ultimate consignee of the exported goods;

(F) Waiver of right to drawback. If the party exporting to Canada or Mexico was not the importer, a written waiver from the importer and from each intermediate person to whom the goods were transferred is required in order for the claim to be considered complete; and

(G) An affidavit of the party claiming drawback stating that no other drawback claim has been made on the designated goods.

(iii) Nonconforming or improperly shipped goods drawback claim. The following must be submitted in the case of goods not conforming to sample or specifications, or shipped without the consent of the consignee and subject to a drawback claim under 19 U.S.C. 1313(c):

(A) Customs Form 7501, or its electronic equivalent, to establish the fact of importation, the receipt of the imported goods, and the identity of the party to whom drawback is payable (see § 182.48(b));

(B) [Reserved]

(C) CBP Form 7512, or its electronic equivalent, if applicable;

(D) Notification of intent to export or waiver of prior notice. CBP must be notified at least 5 business days in advance of the intended date of exportation in order to have the opportunity to examine the goods (see § 190.42 of this chapter); and

(E) Evidence of exportation, as provided in paragraph (b)(2)(ii)(E) of this section.

(iv) Meats cured with imported salt. The provisions of paragraph (b)(2)(i) of this section relating to direct identification manufacturing drawback will apply to claims for drawback on meats cured with imported salt filed under this subpart insofar as applicable to and not inconsistent with the provisions of this subpart, and the forms referred to in that paragraph must be modified to show that the claim is being made for refund of duties paid on salt used in curing meats.

(v) Jet aircraft engines. The provisions of paragraph (b)(2)(i) of this section relating to direct identification manufacturing drawback will apply to claims for drawback on foreign-built jet aircraft engines repaired or reconditioned in the United States filed under this subpart insofar as applicable to and not inconsistent with the provisions of this subpart and the provisions of subpart N of part 190 of this chapter.

(c) [Reserved]

All records required to be kept by the exporter, importer, manufacturer or producer under this subpart with respect to manufacturing drawback claims, and all records kept by others which complement the records of the importer, exporter, manufacturer or producer, including any person who transfers or enables another person to make or perfect a drawback claim, must be retained for at least three years from the date of liquidation of such claims or longer period if required by law (see §§ 190.10, 190.15, 190.38, and 190.175(c) of this chapter).

(a) General. When the drawback claim has been fully completed by the filing of all required documents, and exportation of the articles has been established and the amount of duties paid to Canada or Mexico has been established, the entry will be liquidated to determine the proper amount of drawback due either in accordance with the limitation on drawback set forth in § 182.44 of this subpart or in accordance with the regular drawback calculation. The liquidation procedures of subpart H of part 190 of this chapter, as appropriate, will control for purposes of this subpart.

(b) [Reserved]

(c) Accelerated payment. Accelerated drawback payment procedures will apply as set forth in § 190.92 of this chapter, as appropriate. However, a person who receives drawback of duties under this procedure must repay the duties paid if a USMCA drawback claim is adversely affected thereafter by administrative or court action.

(a) Double payment of claim. The drawback claimant must certify to CBP that the claimant has not earlier received payment on the same import entry for the same designation of goods. If, notwithstanding such a certification, such an earlier payment was in fact made to the claimant, the claimant must repay any amount paid on the second claim.

(b) Preparation of Certification of Origin. The drawback claimant must, within 30 calendar days after the filing of the drawback claim under this subpart, submit to CBP a written statement as to whether the claimant has prepared, or has knowledge that another person has prepared, a certification of origin provided for under § 182.12 and pertaining to the goods which are covered by the claim. If, following such 30-day period, the claimant prepares, or otherwise learns of the existence of, any such certification of origin, the claimant must, within 30 calendar days thereafter, disclose that fact to CBP.

If a claim for a refund of duties is allowed by the Canadian or Mexican customs administration under Article 5.11 of the USMCA (post-importation claim) or under any other circumstance after drawback has been granted under this subpart, the appropriate CBP official must reliquidate the drawback claim and obtain a refund of the amount paid in drawback in excess of the amount permitted to be paid under § 182.44.

The allowance of a claim for drawback, waiver or reduction of duties submitted under this subpart is subject to such verification, including verification with the Canadian or Mexican customs administration, of any documentation obtained in Canada or Mexico and submitted in connection with the claim, as CBP may deem necessary.