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Duty Drawback Newsletter - August 2009

We can do it all

I remember when I was a child (many, many years ago) we had a family doctor who did absolutely everything - he brought me into the world, he treated my colds, he gave me flu shots, he took out my tonsils, he set broken bones, he cured poison ivy - he did it all! Now you are lucky to find a doctor that will do more than take your blood pressure and test your knee reflexes. Everything else needs a specialist. You have a cardiologist for your heart, an orthopedist for your bones, a podiatrist for your feet, a dermatologist for your skin, etc., etc. The older you get, the more specialists you have.

Business is getting as specialized as the medical profession. It used to be that companies prided themselves on being "vertically integrated". Carnegie Steel was one of those known for their total control. They owned the mines that extracted the iron ore from the ground, the ships that transported the iron ore, the railroads that moved the coal to the factory, and the mills where the steel was manufactured. They even trained their own people in an institute of higher learning to prepare the next generation of employees and management.

Now the push is to outsource as much as possible. The prevailing philosophy is that a company should not try to do everything internally, but rather should focus on a single key process or product line, and strive to do that one thing better than anyone else. All other aspects of the business can and should be provided by specialists in those disciplines. In that manner every required function is performed by the best - a specialist - making the entire process more efficient and resulting in superior profits.

These changes in how businesses operate necessitate a broader understanding of the flexibilities of duty drawback. Gone are the days when a client comes in and says, "We import, we manufacture, and we export. Where's my refund?" Now companies might import merchandise themselves, or may purchase from others that import. They may manufacture themselves, or they may have others manufacture on their behalf. They may purchase from companies that make subassemblies from imported merchandise and then incorporate those subassemblies in their finished product. They may export themselves, or sell to other companies that export in their own name.

Duty drawback is one of those business functions that can and should be performed by a specialist like Comstock. We work with your brokers, suppliers and customers to obtain the required import and export information while insulating that data from unauthorized disclosure. We learn your existing record keeping procedures and then build a process with our in-house programmers that allows for the efficient and accurate transfer of vital data for claim preparation. We prepare the claims, secure the requisite bonding, and monitor the claims to ensure prompt and accurate payment. We provide training to educate claimants on the drawback laws, regulations, and procedures so that they know not only what to do but also why it must be done. We intercede on the claimant's behalf on any questions being raised by Customs, and assist on all Desk Reviews and Compliance Audits of drawback claims.

In order for a company to obtain the full benefit from its drawback program, Comstock needs to be informed of every twist and turn in the purchasing, production, and sale of the company's products. The Purchasing department must determine if the merchandise used in production was imported and duty paid, purchased from others that imported and paid duty, or made from imported duty-paid merchandise. Manufacturing personnel must determine if all of the production is being done in house, or if outside converters or agents are doing some or all of the required processes. The Sales Department needs to know if the company is selling the goods directly to overseas customers, or if the customer is purchasing the product in the USA and then exporting in their own name.

Every one of these wrinkles can be used to maximize a company's drawback program. But that can only happen if the drawback specialist knows what is going on. When properly advised of these situations, we can make the connections, secure the required documentation and approvals, interact with outside corporate entities, and bring the entire process into a cohesive, comprehensive, and efficient drawback program. The drawback specialist, Comstock, can do it all. Kind of like that family doctor I was telling you about....