Duty drawback is the refund of up to 99 percent of the duties, taxes, and fees paid on imported merchandise that is later exported or destroyed, or whose substitute is exported. The statute is 19 U.S.C. 1313, the regulations are 19 CFR Part 190, rewritten after the Trade Facilitation and Trade Enforcement Act of 2015, and the claim must be filed within 5 years of the date the goods were imported. The refund is 99 percent, not 100 percent, because a 1 percent retention is built into the statute. The reason most importers leave it on the table is not that the money is small. It is that the records linking the import to the export were never kept, and by the time someone asks about drawback, the link is unprovable. The program rewards the importer who files the paperwork at the time, not the one who reconstructs it later.
The three types, and which one fits
Unused merchandise direct identification, under 1313(j)(1), covers the imported goods themselves exported unused. The goods must be exported or destroyed in their imported condition, though testing, cleaning, repacking, sorting, and relabeling are not treated as use. Unused merchandise substitution, under 1313(j)(2), covers substitute goods exported unused in place of the imports, where the substitute is classified under the same 8-digit HTS subheading, a test that replaced the former commercial interchangeability standard. Manufacturing drawback covers imported components used to make a finished product that is then exported. In 2018, unused-merchandise substitution accounted for 41 percent of claims, unused-merchandise direct identification for 19 percent, and manufacturing substitution for 15 percent.
The type decides the records. Direct identification needs the import entry and the export record for the same goods. Substitution needs the 8-digit subheading match and the export record for the substitute. Manufacturing needs the link between the imported components and the exported finished product, which is the hardest to prove after the fact and the easiest to prove if the production records were kept as the goods moved. Pick the type before the goods move, because the records for the wrong type are useless.
Related reading on this site: TariffTrack HQ and Chapter 99 Lines Stack in a Set Order on the Entry Summary cover the neighbouring problems in more depth.
The deadlines that kill claims
The filing deadline is 5 years from the date of import, and it is strict: late claims are barred regardless of the merits. Before the 2015 modernisation, the deadline was 3 years from export, so the current rule is more generous and still missed constantly. Records must be kept for 3 years from liquidation of the claim. The notice requirement is the one that kills the most claims: for most unused merchandise drawback claims, CBP must be notified of the intended export or destruction at least 5 working days before the export occurs, 7 days for destruction, on CBP Form 7553, or the claimant must hold a waiver of prior notice privilege. Failure to provide timely notice can forfeit the claim entirely.
The practical consequence is that drawback has to be planned, not discovered. A shipment that is exported without the Form 7553 notice, and without a waiver, cannot be the basis for a claim, however well documented the rest of the file is. The notice is cheap, five working days and a form, and the claim it protects can be worth the full duty on the shipment. Put the notice step into the export procedure, not into a year-end review.
Which duties are recoverable, and which are not
Eligibility depends on which tariff was paid. Section 301 duties are recoverable. Section 232 varies by proclamation: some categories permit only manufacturing drawback and others state that no drawback is available, so the controlling proclamation for each entry governs. Duties imposed under IEEPA are a separate matter following the Supreme Court's February 2026 decision, and they are handled through CBP's refund process rather than through drawback.
The worked example is the one that convinces a finance team. An importer pays the 25 percent Section 301 list duty plus the general rate on components from China, manufactures a finished product in the United States, and exports it within five years. It can file a manufacturing drawback claim for up to 99 percent of the duties paid on those components, provided its records link the imports to the exports or meet the 8-digit substitution standard. On a $100,000 duty bill, that is $99,000 back, and the only cost is the recordkeeping that should have existed anyway. Accelerated payment is available for a claimant with an approved bond, but if the claim is later denied, the amount must be repaid, so the privilege shifts the timing of the recovery rather than removing the risk.
Frequently asked questions
What is duty drawback?
Duty drawback is the refund of up to 99 percent of the duties, taxes, and fees paid on imported goods that are later exported or destroyed, or whose substitute is exported. The statute is 19 U.S.C. 1313, and the regulations are in 19 CFR Part 190.
How long do you have to file a drawback claim?
Five years from the date of import, for both the export and the claim. The deadline is strict, and late claims are barred regardless of the merits. Records must be kept for three years from liquidation of the claim.
What is CBP Form 7553?
The notice of intent to export or destroy, which CBP must receive at least five working days before the export, seven days for destruction, for most unused merchandise drawback claims. Failure to provide timely notice can forfeit the claim, unless the claimant holds a waiver of prior notice privilege.
Are Section 301 duties recoverable through drawback?
Yes, Section 301 duties are recoverable. Section 232 varies by proclamation, some categories permit only manufacturing drawback and others state that no drawback is available, so the controlling proclamation for each entry governs.