Manufacturing Drawback is the type of drawback claim where imported merchandise is manufactured or processed in the U.S. into a different article, and that resulting article is exported or destroyed. It is authorized by 19 U.S.C. § 1313(a) and (b) and is the most complex type of drawback.
Two pathways:
- Direct identification (1313(a)) — the manufacturer traces specific imported components into specific exported finished goods. Requires detailed production records
- Substitution (1313(b)) — substituted components of the same 8-digit HTS may be used in production. The exported article must contain components of that HTS, but they need not be the imported units themselves. See substitution drawback
General manufacturing drawback ruling. Before filing manufacturing claims, the manufacturer must have either:
- An approved specific manufacturing drawback ruling (issued under 19 CFR § 190.7), or
- A general manufacturing drawback ruling application (using one of CBP's pre-approved general rulings — there are general rulings for petroleum, sugar, components for civil aircraft, and others)
Waste and byproducts. Manufacturing drawback rules carefully account for:
- Valuable waste — recovered scrap that has commercial value reduces the drawback amount
- Irrecoverable waste — losses in production do not reduce drawback
- Byproducts — separate articles produced incidentally; treated separately under the ruling
Claim cycle.
- File the manufacturing ruling
- Track imported components into the production process
- Document the exportation of the finished article
- File the drawback claim within 5 years of importation (TFTEA window)
Manufacturing drawback is used heavily by chemical, petroleum, electronics, and aerospace manufacturers. Filed through ACE drawback module.