As many of you are aware from our previous communications, drawback is scheduled to be deployed to ACE on February 24, 2018, as the announcement was listed in Federal Register Notice Vol. 83, No. 12, released 1/18/2018 (FRN ACE Becoming the Sole CBP-Authorized Electronic Data Interchange (EDI) System for Processing Electronic Drawback Filings). February 24, 2018 is the date that transitions “core” drawback (drawback under the current statute) into ACE, and is the first date by which drawback claims can be filed under Trade Facilitation and Trade Enforcement Act (TFTEA) Section 906.
Based on meetings that we’ve been involved in with the Drawback Working Group in the last week, CBP has advised the Trade that Accelerated Payment would not be made for claims filed under the TFTEA drawback provisions until final regulations have been implemented. Combining this with the fact that TFTEA claims will not be processed or liquidated, drawback payments will stop completely after February 24, 2019 if the regulations are not implemented by that time. The Working Group discussed this issue at length with CBP officials to explain why it’s important to continue Accelerated Payment in the interim.
Accelerated Payment (AP) is outlined in 19 CFR 191.92 of the regulations, stating in §191.92(a)(1) that “Accelerated payment of drawback consists of the payment of estimated drawback before liquidation of the drawback entry.” Traditionally these payments are made within 1-2 months of a drawback claim’s receipt and processing at one of the four drawback centers. This privilege is granted once a claimant can meet the requirements of the application and can furnish a bond to cover the claim, dollar for dollar. Most claimants in the industry file under AP so that they don’t have to wait until the claim liquidates, which could take a year, or longer, if extensions are taken by CBP to keep the drawback claim open.
CBP is planning to issue a Guidance Document for policies that will be applied for TFTEA claims pending final regulations. The Drawback Working Group had a chance to discuss some of the details of this proposed document last week. The final document should be released in the next few weeks and will instruct the trade on how TFTEA drawback claims are to be filed on 2/24/2018 and thereafter. Please note that these policy positions are still being defined and that the guidance is not yet final. This document will be important as it will be the policy reference point for filing drawback claims until the regulatory reviews have been completed.
We will continue to issue these informational bulletins as we move closer to the rollout of the ACE drawback module on February 24th and as CBP issues guidance and policy statements regarding the filing and processing of TFTEA drawback claims.