Customs Extends Drawback Comment Period

Exporters and other interested parties have an additional month to tell Customs and Border Protection what they think about a controversial change in drawback regulations.

The agency on Wednesday extended the comment period past the original deadline of Dec. 14 to Jan. 12, 2010, on a proposed rule change that would keep importers from claiming drawback on goods subject to U.S. excise taxes.

Companies have been able to recover 99 percent of the excise taxes they pay on imported goods if they export “commercially interchangeable” products. It’s widely used in the alcohol, tobacco and petroleum industries.

Treasury officials said it was difficult to assess how much revenue the government lost because of the practice, and the proposed rule change is intended to get regulations in line with what Congress intended when it passed excise tax measures.

Importers oppose the change, saying drawback has been part of the Customs system for more than 200 years as a way to encourage manufacturing exports. Since customs law allows exporters to recover fees and taxes, drawback on excise taxes should not be excluded, they said.

Contact R.G. Edmonson at bedmonson@joc.com.