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Import Cost Recovery

Duty Drawback

US Customs allows you to recover up to 99% of import duties, Section 301 tariffs, and fees on goods that are exported or destroyed. Most eligible importers never file.

Avg claim: $40,000+5-year lookbackCBP Form 7551

What is duty drawback?

Duty drawback is a refund program administered by US Customs and Border Protection (CBP) that lets importers reclaim up to 99% of duties, excise taxes, and certain fees paid on imported merchandise — provided that merchandise is subsequently exported or destroyed under CBP supervision.

The program has existed since 1789 (it was among the first acts of the First Congress) and today returns over $1 billion per year to US businesses. Despite this, industry estimates suggest that fewer than 10% of eligible importers actually file claims — largely because the documentation requirements appear daunting.

With modern digital entry records (ACE) and automated filing through the Automated Broker Interface (ABI), the barrier to filing has dropped significantly. Any importer who exports goods, manufactures for export, or returns defective merchandise should evaluate their drawback eligibility.

Types of duty drawback

Each type has different eligibility rules, documentation requirements, and timeframes.

Manufacturing Drawback (99% recovery)

The most valuable type. If you import materials, manufacture a product, and export it, you can recover 99% of duties paid on the imported inputs. Requires CBP Form 7551.

Unused Merchandise Drawback

Goods imported and then exported in the same condition — without being used or processed in the US. You recover 99% of duties paid within 5 years of import.

Rejected Merchandise Drawback

Defective, nonconforming, or incorrectly shipped goods that are returned or destroyed can qualify for a full 99% duty refund. Must be returned within 3 years.

Substitution Drawback

If you substitute commercially interchangeable imported and domestic goods, you can claim drawback on exports even if you didn't export the exact imported merchandise.

What duties are recoverable?

Duty / Fee TypeDrawback eligible?Recovery rate
MFN / Column 1 dutiesYes99%
Section 301 tariffs (China)Yes99%
Section 232 tariffs (Steel / Aluminum)Yes99%
Anti-dumping duties (ADD)Yes99%
Countervailing duties (CVD)Yes99%
Merchandise Processing Fee (MPF)Yes99%
Harbor Maintenance Fee (HMF)Yes99%
Internal Revenue taxes (excise)Yes (limited)99%
Brokerage / freight chargesNo—

How to file a duty drawback claim

Step-by-step process through CBP's Automated Commercial Environment (ACE).

01

Identify eligible entries

Pull your import records for the last 5 years. Match entries with corresponding exports or destructions. Section 301 tariffs, MPF, and HMF are all drawback-eligible.

02

Gather documentation

You'll need: CBP entry summaries, commercial invoices, proof of export (e.g., AES filing / EEI), bills of lading, and manufacturing records if applicable.

03

File CBP Form 7551

Submit your drawback claim through CBP's Automated Drawback System (ABI) within 5 years of the original import date. Claims can be as small as $100.

04

Liquidation and refund

CBP typically issues a refund check within 4–8 weeks after claim liquidation. Interest accrues on approved claims at the current IRS underpayment rate.

Duty drawback FAQ

What is duty drawback?

Duty drawback is a US Customs and Border Protection (CBP) program that allows importers to recover up to 99% of duties, taxes, and fees paid on imported goods that are subsequently exported or destroyed. It is one of the largest trade incentive programs in the United States, returning hundreds of millions of dollars to US businesses annually.

How long do I have to file a duty drawback claim?

You have 5 years from the date of importation to file a duty drawback claim. The export or destruction that qualifies the merchandise must also occur within this 5-year window from the original import date.

What percentage of duties can I recover?

Under the Trade Facilitation and Trade Enforcement Act of 2015, the drawback recovery rate increased from 99% to 99% for manufacturing and unused merchandise drawback (it was previously 99%). Section 301 tariffs paid on Chinese goods are also eligible for drawback.

Do Section 301 tariffs qualify for drawback?

Yes. Section 301 tariffs imposed on goods from China are drawback-eligible, as are standard MFN duties, merchandise processing fees (MPF), and harbor maintenance fees (HMF). This significantly increases the potential refund for companies importing Chinese goods that are re-exported.

What types of businesses benefit most from duty drawback?

Manufacturers who import raw materials and export finished goods see the largest recoveries. Retailers who import and re-export, distributors with international customers, and companies that regularly return goods to foreign suppliers also benefit significantly.

Is duty drawback worth it for small businesses?

CBP processes claims as small as $100. However, the administrative burden of documentation means most companies find it worthwhile only when cumulative annual duties exceed $10,000–$50,000. A customs broker or drawback specialist can assess your eligibility cost-effectively.

Related guides

Know exactly what you paid before you file

Zentria logs every import entry with full duty breakdown — MFN, Section 301, MPF, HMF. Your drawback specialist will have everything they need in one export.

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