Neville Peterson LLP: Customs and International Trade Law

March 15, 1998
M E M O R A N D U M
TO: Clients and Friends of the Firm
FROM: John M. Peterson
Neville Peterson LLP
RE: New Customs Duty Drawback Regulations
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I. EXECUTIVE SUMMARY

     The United States Customs Service has published Treasury Decision 98-16, a comprehensive overhaul of the agency's duty drawback regulations. The new regulations, which become effective April 6, 1998, reflect amendments to the drawback law made by the Customs Informed Compliance and Modernization Act, and make numerous changes in drawback administration. This Memorandum highlights some of the most important drawback law changes.

II. HIGHLIGHTS OF THE NEW REGULATIONS

     Reapplication for Drawback "Privileges";
     Waiver of Prior Notice of Exportation,
     Accelerated Payment of Drawback

     Drawback claimants who have been authorized to file unused merchandise drawback claims with waiver of prior notice of exportation or to receive accelerated payment of drawback must file applications to renew those privileges by April 6, 1999.

     Exporter's Summary Procedure

     Filing drawback claims using the Exporter's Summary Procedure (ESP) is no longer a "privilege" requiring Customs' approval, but may be used at the option of the drawback claimant;

     Use of HTS and Schedule B Numbers in Drawback Claims

     For designated import entries made on or after April 6, 1998, drawback claimants will be required to include Harmonized Tariff Schedule classification numbers (taken from Customs Form 7501 or a Certificate of Delivery) on drawback claims. For merchandise exported made on or after April 6, 1999, the drawback claim must also show the HTS or Schedule B number, taken from the Shipper's Export Declaration (SED).

     Notice of Intent to Export

     The time for filing with Customs a notice of intent to export merchandise (for unused merchandise claims) has been shortened to 2 working days (from 5 working days) prior to the date of intended exportation. Notices of intent to destroy goods for drawback must be filed at least (7) business days before the date of intended destruction.

     One-Time Application for Waiver of Pre-export Notification

     Treasury Decision 98-16 provides a "one-time" procedure to allow the approval of unused merchandise drawback claims in cases were claimants did not furnish pre-export notification. the procedure requires the claimant to furnish extensive data regarding the nature of the imported and exported merchandise involved in the drawback claim, and to make available to Customs business records, laboratory records and inventory records, establishing compliance with drawback requirements.

     Statements in Protests Involving Import Entries

     Effective April 6, 1998, importers challenging the liquidation of an import entry must include in their protest, a declaration, to the best of their knowledge, "as to whether the entry is the subject of drawback, or whether the entry has been referenced on a certificate of delivery of certificate of manufacture and delivery so as to enable the party to make such entry the subject of drawback."

     Customs Drawback Compliance Program

     Customs has now implemented final regulations governing applications for, and participation in, the voluntary Drawback Compliance Program authorized by the Customs Informed Compliance and Modernization Act.

III. OVERVIEW OF THE NEW REGULATIONS

     Treasury Decision 98-16 is a comprehensive revision of the duty drawback regulations, which implements changes to the drawback laws effected by Section 632 of the Customs Informed Compliance and Modernization Act, and the Uruguay Round Agreements Act. It publishes a new Part 191 of the Customs regulations, and also makes changes to Customs' administration of drawback.

     This Memorandum summarizes the principal provisions of Customs' regulations.

     Customs has also published a new "Informed Compliance Publication" regarding duty drawback for the guidance of the trade community. A copy of this publication is enclosed.

     Customs' new regulations enter into force on April 6, 1998, except as specifically noted in the regulations.

IV. DEFINITIONS AND STATUTORY IMPLEMENTATION

1. Definitions

     A. Generally. The regulations [19 C.F.R. Section 191.2] set forth new definitions for a number of terms associated with drawback, including:

Certificate of Delivery
Certificate of Manufacture and Delivery
Commercially interchangeable merchandise
Designated merchandise
Destruction
Exportation
General manufacturing drawback ruling
Manufacture or production
Possession
Records
Relative value
Specific manufacturing drawback ruling
Substituted merchandise.

The definition of "records" is a new one, which was not reflected in the proposed regulations. It encompasses all "statements, declarations, documents and electronically generated or machine readable data which pertain to the filing of a drawback claim" or to the information required by 19 U.S.C. Section 1508.

B. "Commercially Interchangeable Merchandise". The term "commercially interchangeable merchandise" is of particular importance since it governs the allowance of drawback under the substitution unused merchandise drawback law [19 U.S.C. Section 1313(j)(2)] as well as the provisions concerning substitution of petroleum derivatives [19 U.S.C. Section 1313(p)]. Section 191.2(e) of the regulations sets out a definition which is rather unrevealing:

(e) Commercially interchangeable merchandise. "Commercially interchangeable merchandise" means merchandise which may be substituted under the substitution unused merchandise drawback law, section 313(j)(2) of the Act, as amended, (19 U.S.C. Section 1313(j)(2)) (see @ 191.32(b)(2) of this subpart or under the provision for the substitution of finished petroleum derivatives, section 313(p), as amended (19 U.S.C. 1313(p)).

     However, the regulatory definition may be eclipsed by the recent United States Court of International Trade decision in Texport Oil Company v. United States, Slip Op. 98-20 (March 5, 1998), which defines "commercially interchangeable" merchandise as goods which are (1) commercially accepted, and (2) given the same descriptions on import and export invoices or contracts.

     C. Amendment of Certain Existing Definitions. Customs has revised its definition of "fungible merchandise" to clarify that the definition applies to both "merchandise" and "articles". See 19 C.F.R. Section 191.2(o). [The definition is not substantively changed, although it is now more frequently applied for purposes of determining whether commingled goods may be accounted for on the basis of accounting rules, than for purposes of determining eligibility of goods for drawback].

     Customs has also amended its definition of "substituted merchandise or articles" to make clear that it extends to all provisions of the drawback law for which substitution is permitted. However, separate definitions are provided for the manufacturing drawback law, 19 U.S.C. Section 1313(b), the substitution unused merchandise drawback law, 19 U.S.C. Section 1313(j)(1), and petroleum substitution, 19 U.S.C. Section 1313(p). See 19 C.F.R. Section 191.2(x).

     D. "Ordinary Customs Duties". The regulations define the "ordinary Customs duties" eligible for drawback to include finally liquidated duties paid on an entry, or withdrawal from warehouse, or estimated duties (in cases where drawback is claim prior to liquidation of an import transaction). 19 C.F.R. Section 191.3(a)(1)(iii).

     In conformity with current administrative precedents, the definition is expanded to include voluntary tenders of additional duties, including payments of "withheld duties" pursuant to 19 U.S.C. Section 1592(d). These duties may be designated for drawback, provided:

(a) liquidation of the import entry or withdrawal became final prior to the payment of the additional duties to Customs;

(b) the payment was specifically identified as being of duties for a particular entry or withdrawal; and

(c) the drawback entry in which the import entry of withdrawal is designated has not been finally liquidated.

See also 19 C.F.R. Section 191.82.

E. Harbor Maintenance Taxes; Merchandise Processing User Fees. The regulations [19 U.S.C. Section 191.3(b)] state that harbor maintenance taxes (HMTs), currently assessed at the rate of 0.125% ad valorem on waterborne imports and merchandise processing user fees (MPFs), currently assessed on imports at the rate of 0.21%, with a $485 per entry "cap", are not eligible for drawback.

However, the U.S. Court of International Trade recently ruled, in Texport Oil Company v. United States, Slip Op. 98-20 (March 5, 1998) that both HMTs and MPFs are eligible for drawback as "Federal taxes assessed upon goods by reason of their importation". This provision of the regulations may therefore be obsolete, if the Texport ruling stands.

We have recommended that drawback claimants amend all currently unliquidated claims to request drawback of HMTs and MPFs paid in respect of import entries.

We have also recommended that drawback claimants consider filing suit in the U.S. Court of International Trade, seeking refunds of HMTs and MPFs on all drawback claims liquidated within the last two years.

     F. Manufacturing Drawback Contracts/Rulings. As discussed below, the terms "specific drawback contract" and "general drawback contract", as used with respect to manufacturing drawback [19 U.S.C. Section 1313(a) and (b)] are replaced with the terms "specific manufacturing drawback ruling" and "general manufacturing drawback ruling". See 19 C.F.R. Sections 191.7, 191.8.

     The regulations also provide that existing manufacturing drawback contracts/rulings, remain in effect unless they materially conflict with the drawback statute or the new regulations, in which case they are considered to be superseded. Drawback claims which have been filed pursuant to an existing contract are valid, provided the subject goods were exported prior to the effective date of the new regulations, and there is no material conflict with the statute. [Unfortunately, Customs' rulemaking notice does not furnish definitive guidance concerning when existing drawback contracts or claims are in "material" conflict with the law or regulations].

2. Manufacturing Drawback

     A. "Use" of Merchandise. Reflecting statutory changes, Customs' regulations recognize that drawback is payable on manufactured "drawback products" upon their exportation, or upon their destruction under Customs supervision. The regulations specify that goods may not have been "used" within the United States prior to such exportation or destruction.

     B. Principal/Agent Manufacturing Relationships. Customs' regulations recognize that, where a manufacturing drawback claimant appoints an agent to perform some or all of the manufacturing operations, the principal is considered the "manufacturer". A principal need not furnish a Certificate of Delivery to its agent, when transferring merchandise to the agent. However, the agent is required to furnish the principal with a Certificate of Manufacture and Delivery for goods transferred back to the principal. The CMD would not assign drawback rights to the principal, since the principal is already considered to have these rights.

     The principal bears the burden of establishing a principal/agent relationship, which preferably should be with a written agency agreement.

3. Rejected Merchandise Drawback

     The regulations reflect statutory changes, which allow rejected merchandise to be returned to Customs custody for exportation or destruction within 3 years after importation (rather than within 90 days). The regulations also conform to statutory changes by allowing rejected merchandise drawback whenever the goods are shown to be defective at the time of importation -- without reference to purchase specifications or samples.

4. Unused Merchandise Drawback

     A. "Unused" Versus "Same Condition". Customs' regulations recognize that the "unused merchandise" drawback statute [19 U.S.C. Section 1313(j)] is more liberal than its "same condition drawback" predecessor. For instance, goods need no longer be exported in the "same condition" as when imported (or when designated merchandise was imported). Drawback is available for goods which have deteriorated in condition since importation, provided the deterioration is not he result of use. Furthermore, the regulations acknowledge that an expanded list of incidental operations may be performed on exported merchandise which will not constitute a disqualifying "use" for drawback purposes.

     B. Establishing "Commercial Interchangeability". Customs has withdrawn its earlier proposal which would have obligated drawback claimants to obtain "rulings" confirming that imported and substituted goods are "commercially interchangeable" in all cases where drawback is claimed on a substitution basis under 19 U.S.C. Section 1313(j)(2).

     Customs' regulations [19 U.S.C. Section 191.32] provide, however, that drawback claimants may obtain a determination of "commercial interchangeability" in either of two ways:

(a) a formal ruling from Customs Headquarters' Office of Regulations and Rulings, Duty and Refund Determinations Branch; or

(b) submission of all the documentation necessary to make a commercial interchangeability determination with each individual drawback claim filed.

Claimants may also seek a non-binding "predetermination" of commercial interchangeability" from the drawback office where the claim will be filed.

     We note that, under the United States Court of International Trade's recent Texport Oil Company ruling, a determination of "commercial interchangeability" may turn on the invoice and contract descriptions used for the merchandise. This suggests that, even where a Customs Headquarters ruling is obtained, the final determination of commercial interchangeability may turn upon the submission of documentation to support the claim.

     C. "Possession" of Imported or Substituted Merchandise. In order to be eligible to receive drawback under 19 U.S.C. Section 1313(j)(2), a claimant must "either be the importer of the imported merchandise, or have received, directly or indirectly, the imported merchandise, commercially interchangeable merchandise or any combination thereof." Customs' regulations "allow for multiple transfers of imported or substituted merchandise, but do not permit multiple substitutions."

     Thus, if A imports duty paid merchandise, transfers commercially interchangeable merchandise to B, and B transfers the same merchandise to C, then party C is entitled to claim drawback, or to assign drawback through the chain of possession. However, if B had substituted other merchandise for that received from A, then there would have been a multiple substitution, and C would not be permitted to claim drawback.

     The concept of "possession" has also been expanded to reflect statutory changes, and to include "ownership while in bailment, in leased facilities, in transit to, or in any manner under the operational control of, the party claiming drawback."

     Moreover, the pre-export notification period for unused merchandise drawback claims has been reduced to two (2) business days, unless Customs waives inspection or authorizes a different notification period.

5. Substitution of Finished Petroleum Derivatives [19 U.S.C. Section 1313(p)

     Section 313(p) of the Tariff Act permits the payment of drawback on exported finished petroleum derivatives which are of the "same class or kind" as a "qualified article", to wit, an imported duty-paid article, or a manufactured article which, if exported, would be eligible for drawback. Customs' regulations recognize the substitution principles for these products.

     In addition, the regulations require that the exporter of the qualified article must have imported it or manufactured it in accordance with 19 U.S.C. Section 1313(a) or (b); or have purchased or exchanged it, directly or indirectly, from an importer or from the producing refinery, in a quantity at least as great as the quantity of the exported article.

     There has been controversy concerning the extent and nature of the substitution permitted under 19 U.S.C. Section 1313(p), and litigation on the subject is currently pending before the United States Court of International Trade.

6. Packaging Materials

     Customs' regulations recognize the recodification of the provisions regarding drawback on packaging materials from 19 U.S.C. Section 1313(j)(4) to 19 U.S.C. Section 1313(q). It also recognizes that packaging materials are now eligible for drawback under the manufactured, rejected merchandise and unused merchandise drawback provisions. Packaging material is subject to drawback under the same drawback statute as its contents; however, the duties refunded are those paid on the packaging material itself. 19 C.F.R. Section 191.13.

     Customs has ruled that packaging materials which are produced by one person and then filled by another are "used" in the United States, in a manner which disqualifies them from drawback eligibility under certain circumstances. Legislation to overturn this ruling is pending in Congress.

7. Filing of Drawback Claims UnderWrong Provision

     Section 632 of the Customs "Mod Act" provides that, if a drawback claim is filed under one regime (e.g., manufacturing), but Customs determines the claim is eligible for drawback under another regime (e.g., unused merchandise), the agency may process the claim under the regime it deems applicable. Customs' has indicated that the agency "is not required to investigate all alternatives in addition to that claimed before liquidating a drawback claim as presented." Rather, if Customs determines that a transaction does not qualify for drawback under the scheme referenced in the drawback claim, it may liquidate the claim "no drawback". The burden then rests with the claimant, by protest, to assert a claim for drawback under the proper regime.

     Where a request is made to process a drawback claim under a different regime, the claimant must comply with all substantive and procedural requirements of the applicable scheme (e.g., pre-export notification of goods exported under 19 U.S.C. Section 1313(j), or an appropriate waiver). 19 C.F.R. Section 191.12.

8. Successorship Under 19 U.S.C. Sections 1313(b) and (j)(2)

Customs' regulations also reflect 19 U.S.C. Section 1313(s), which was added to the statute in 1993 to reflect the cases where goods imported or used in manufactured by a predecessor entity may be used as the basis of a drawback claim by a successor entity. The statute authorizes a successor entity to obtain pre-existing drawback rights of a predecessor, for example by acquiring the all or substantially all of the rights and liabilities of the predecessor, or acquiring the business assets and rights of a single plant, division, or other business unit of a predecessor party.

9. Drawback on Certain Agricultural Products

     The Uruguay Round Agreements Act replaced a number of United States quotas on imports of agricultural products with a system of "tariff rate quotas" (TRQs). Under these programs, a stated quantity of merchandise may enter the United States each year at low "under TRQ" duty rates; goods entered in excess of these quantities are subject to drastically higher "over-TRQ" duty rates.

     Section 404(e)(5) of the Uruguay Round Agreements Act provides that no drawback (except direct identification unused merchandise drawback of 19 U.S.C. Section 1313(a)) "shall be available with respect to an agricultural product subject to an over-quota rate of duty". [However, direct identification manufacturing drawback is allowed in respect of over-TRQ tobacco]. The evident intent of this provision was to prevent drawback claimants from evading the over-TRQ duty rate by designating imports of goods subject to that rate as the basis of drawback.

     Customs' regulations provide that no drawback will be available when either the designated imported merchandise, or the substituted merchandise (in the case of substitution drawback) is an agricultural commodity on which duty was paid at an over-Tariff Rate Quota (TRQ) rate of duty. 19 C.F.R. Section 191.3(c). Customs has modified this regulation to clarify that agricultural commodities which are subject to TRQ regimes, but which were assessed duty at under-TRQ rates, are eligible for drawback. It also clarifies that over-TRQ goods are eligible for direct identification unused merchandise drawback under 19 C.F.R. Section 1313(j)(1).

V. MAJOR ADMINISTRATIVE CHANGES

1. Manufacturing Drawback "Rulings"

     Under present practice, companies wishing to claim manufacturing drawback propose to Customs a "drawback contract". Customs reviews the proposal to ascertain whether it satisfies substantive and procedural requirements, and whether it will allow for verification of drawback claims. If so, Customs issues a "specific drawback contract" to the applicant.

     In addition, Customs has from time to time published a number of "General Drawback Contracts" covering operations likely to be conducted by multiple claimants (e.g., manufacture of orange juice from concentrate, assembly of electronic components), and invited claimants to submit letters offering to follow these general contracts.

     In Customs' view, the process by which it establishes drawback contracts is substantively identical to the process by which it issues rulings on a variety of other Customs matters. The agency therefore has redesignated these devices as "specific manufacturing drawback rulings" and "general manufacturing drawback rulings". Sample drawback rulings, and general drawback rulings are published as an appendix to 19 C.F.R. Part 191.

     Where a claimant wishes to follow the procedures specified in a general manufacturing drawback ruling, it can do so by submitting a letter to the Customs drawback office with which claims will be filed, furnishing information concerning the claimant and its specific merchandise.

2. Completion of Drawback Claims

     Customs has published extensive regulations concerning the "completion" and "amendment" of drawback claims. [19 C.F.R. Sections 191.51 - 191.53].

     A. Submission of Certificates of Delivery, Etc.. Customs' new regulations specify the documents which constitute a complete drawback claim. Certificates of Delivery must be in possession of the person to whom the referenced merchandise was delivered. Certificate of Manufacture and Delivery must be included in the claim. Where such a certificate has been filed with Customs in connection with one drawback claim, successive drawback claims need only reference the certificate and the claim with which it was filed. 19 C.F.R. Section 191.51(a).

     Where a drawback claim is incomplete, Customs may "reject" it, see 19 C.F.R. Section 191.52(a). The claimant may complete and re-file the claim, subject of course to statutory time limits.

     B. "Perfecting" and "Amending" Drawback Claims. According to the regulations, where a complete drawback claim is timely filed within the period provided by law, but additional evidence is required, Customs will notify the claimant in writing, and the claimant will have 30 days to submit the additional information required. This information may be submitted after expiration of the three year post-export period for filing drawback claims. 19 C.F.R. Section 191.52(b).

     C. "Restructuring" a Drawback Claim.Customs' regulations authorize the agency to require claimants to "restructure" drawback claims, so long as the restructuring is not shown to be impossible or impractical for the claimant. The claimant bears the burden of demonstrating that it should not be required to "restructure" its claim. 19 U.S.C. Section 191.53.

3. Drawback "Privileges"

     A. "Exporter's Summary Procedure" Made Elective. Currently, an exporter must obtain specific Customs permission in order to file drawback claims using the "Exporter's Summary Procedure" (ESP), which authorizes a drawback claimant to furnish Customs with a summary schedule of exports over a stated time period, rather than filing claims for each export shipment. Under Customs' regulations, the use of ESP is solely at the election of the drawback claimant.

     B. "Accelerated Payment of Drawback": Need for Reapplication. Payment of accelerated drawback remains a "privilege" under Customs' regulations, for which claimants must file an application and provide a bond.

     All existing accelerated drawback privileges will expire one year after the regulations become effective, to wit, April 6, 1999, unless the claimant files a new application for the privilege. A current privilege-holder would be allowed to continue exercising its privileges if it files a timely application.

     C. Waiver of "Prior Notice of Intent to Export or Destroy". "Blanket waivers" of the requirement to provide Customs with prior notice of intent to export or destroy merchandise subject to drawback under 19 U.S.C. Section 1313(j) will continue to be "privileges", subject to application and bonding requirements.

     All existing blanket waivers will expire one year after the regulations become effective, to wit, April 6, 1999, unless the claimant files a new application for the privilege. A current privilege-holder would be allowed to continue exercising its privileges if it files a timely application.

     In response to a critical report from the General Accounting Office, Customs has eliminated retroactive waivers of the prior notice of intent to export or destroy.

     The new regulations contain a new procedure, which permits claimants to apply for a one time waiver of the notice requirement on a retroactive basis, so that drawback might be claimed on past exports. An extensive written application must be filed, containing information sufficient to persuade Customs that drawback should be allowed on a retroactive basis, and that the privilege is not being used. Each claimant may use this "retroactive" provision only once, except where good cause is shown (e.g., in cases of successorship). Customs intends to use this provision to educate claimants concerning the procedures for seeking waiver of notice, and for "informed compliance" education of drawback claimants.

     D. "Stay" of Drawback Privileges. Customs' regulations condition the grant of "blanket waivers" of pre-export notification and accelerated payment privileges by a provision allowing Customs to issue a written "stay" of the privilege for a reasonable and definite time. A "stay" would allow Custom to conduct an investigation to determine whether the privilege should be continued. Under Customs' regulation, the issuance of a stay will not be considered a revocation or suspension of the privilege.

4. Use of Harmonized Tariff Schedule and Schedule B Numbers

     Customs' regulations require that all drawback claims, as well as all Certificates of Delivery/Manufacture & Delivery, contain the six-digit Harmonized Tariff Schedule or Schedule B heading applicable to the imported and exported merchandise covered thereby.

     This requirement will become effective for imported merchandise entered on and after April 6, 1998, and for goods exported goods on or after April 6, 1999.

5. Drawback Compliance Program

     Treasury Decision 98-16 formally implements Customs' voluntary Drawback Compliance Program, which is established pursuant to the Customs Informed Compliance and Modernization Act. The purpose of the program is to increase the "informed compliance" awareness of drawback claimants, and to allow Customs officials to review claimants' recordkeeping, manufacturing and claims-filing procedures, in order to verify legal compliance before the actual processing or audit of claims.

     Participation in the drawback compliance program is open not only to drawback claimants, but to any party participating in drawback (e.g., parties issuing Certificates of Delivery, manufacturing agents, etc.).

     Section 593 of the Tariff Act provides for the imposition of civil penalties on claimants who make false or negligent drawback claims. Penalty procedures and mitigation guidelines for this statute will be established in a separate rulemaking proceeding.

6. Identification of Goods by Accounting Methods

     A. Acceptable Accounting Methods. In cases where substitution is not permitted, the Customs regulations permit drawback claimants to identify merchandise for drawback purposes using any one of four (4) approved accounting methods, to wit:

(i) FIFO (first in, first out); (ii) LIFO (last in, first out); (iii) low-to-high; and (iv) weighted average.

These methods may be used in lieu of tracking the actual physical inventory movements of goods. Customs would also be authorized to permit a drawback claimant to use "either a modification of one of these methods, or a different method".

     Thus, a properly-documented turnover period may be used to establish, for instance, the use of imported merchandise in manufacture.

     Where substitution is not permitted, the "average" method of accounting will not be permitted.

     B. Commingling Permitted But Not Required. Prior Customs regulations and rulings limit the use of accounting methods to situations where goods having different drawback statuses are commingled in a single inventory location. Under the regulations, such commingling is allowed but not mandated. A company's records will be the determining factor in the employment of an accounting method.

6. Recordkeeping

     Drawback claimants are required to keep records to establish compliance with applicable laws and regulations. Such compliance is a condition precedent to the granting of drawback.

     Customs' regulations require drawback claimants to maintain [or to require the maintenance by others] of records sufficient to establish entitlement to drawback, for at least three years after the payment of drawback. However, Customs encourages claimants to maintain records at least until the liquidation of the drawback entry becomes final.

7. Improvements in Customs Administration

     To evenly distribute workloads, and make optimum use of Customs resources, Customs has indicated that (as an internal work management matter), drawback claims filed at one Customs office may be transferred to another office for review and processing. This might be done where one drawback office is overburdened, or where a given drawback office has special expertise in dealing with a claimant or the merchandise involved in a claim. However, liquidation notices will be posted at the Customhouse where the claim was originally filed.

8. Protests/Requests for Reliquidation

     Customs has amended Parts 173 and 174 of its regulations to require that all protests [19 U.S.C. Section 1514] and requests for reliquidation [19 U.S.C. Section 1520(c)] be annotated to indicate whether the entries which are the subject thereof are the subject of any claims for drawback. In addition, drawback claimants are required to indicate whether import entries involved in a claim are the subject of a pending protest or reliquidation request.

     While this regulation seeks to provide clarity in the processing of drawback claims, the fact is that drawback claim information may not be available within the tight statutory deadlines in which protests and reliquidation petitions must be filed. A protestant or petitioner's inability to provide this information within the time for filing a protest or petition should not affect the validity of that filing.

VI. NEW DRAWBACK FORMS

     Customs has replaced and renumbered its forms for duty drawback. The new forms are as follows:

Form Number	Description
7551	Drawback Entry
7552	Delivery Certificate for Purposes of Drawback
7553	Notice of Intent to Export, Destroy, or Return Merchandise for Purposes of Drawback

VII. CONCLUSION

This Memorandum summarizes some of the major changes worked by Treasury Decision 98-16. All drawback claimants will need to obtain a working knowledge of the new regulations,which contain many additional changes.

Our offices stand ready to furnish any additional information or assistance which drawback claimants or others may require with respect to the new drawback laws and regulations.

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