Does your company have a viable drawback opportunity? ITM's panels of experts discuss new ways to claim Duty Drawback on your imported and exported goods.
Learn how much of the unclaimed $2.4 billion dollars for duty drawback might be yours. In this episode, we discuss the following topics:
We hope you will gain some valuable insight into the world of customs tariffs. With all the supply chain challenges the world is facing, our aim is to maximize your duty drawback dollars and boost your bottom line. We hope you'll subscribe to our podcast to stay current with each new episode in which will unveil numerous ways to improve your international trade profitability. Thanks for listening.
Does your company have a viable drawback opportunity? ITM's panels of experts discuss new ways to claim Duty Drawback on your imported and exported goods.
Learn how much of the unclaimed $2.4 billion dollars for duty drawback might be yours. In this episode, we discuss the following topics:
We hope you will gain some valuable insight into the world of customs tariffs. With all the supply chain challenges the world is facing, our aim is to maximize your duty drawback dollars and boost your bottom line. We hope you'll subscribe to our podcast to stay current with each new episode in which will unveil numerous ways to improve your international trade profitability. Thanks for listening.
Good afternoon and welcome to our webinar today where we will be discussing Duty Drawback and the viability of a program within your organization. My name is Jill La Madeleine and I'm the Vice President at International Tariff Management. I have 28 years of experience working with customers and I am a licensed customs broker. ITM has been managing duty, drawback classification and free trade agreements for clients for almost 40 years. During that time we have helped numerous clients collect millions of dollars in duty. Drawback. Today I am joined by two of my colleagues and I'm going to ask them each to introduce themselves. And we'll begin with Jay. Thank you, Jill. My name is Jay Charkow, and I am the president and founder of International Tariff Management. As you know, I've been doing this for almost 40 years, and over that time I've established a very solid working relationship with the United States Customs Service, and that is very important in being able to deal with duty drawback in understanding the relationship that one has with the Customs Service. And we've had many, many customers we work with. I personally members of the National Customs Brokers Association and the American Association of Importers and Exporters and have lectured on duty drawback for many years. And I'm happy to share my experiences with everyone today about what we can do for you. Excellent. And Carrie, and I'm Carrie Irwin. I'm the director of Sales. I come with 20 plus years in the sales industry. I have worked with many different industries and many different sized companies. And my perspective on this today is really to kind of bring about what prospects and clients ask. Excellent. And as I mentioned before, today we're going to discuss duty drawback and how to determine if your company has a program that where you can recover money back from U.S. Customs. And I think the best way to begin is to talk about drawback and what drawback is for those that don't know. So I'm going to ask Jay to tell us what is duty drawback? Duty drawback is not a bad word. Duty drawback is a law that was passed back in 1789. And the government passed that law so that manufacturing companies within the United States didn't have to pay a penalty if they imported goods into the US and use the United States as a basis for manufacturing. They allowed one to pay a tariff duty when the goods came into the country and that helped support the government. It was a very young government at the time and it allowed them not to pay a penalty on the duties that they paid when they imported the goods if they indeed exported that and helped the economy of the United States. Exportation is a very important part of business. Back in 1789 and it's very important part of business in 20, 22. So basically duty drawback is the ability to bring goods into the country that are dutiable and in turn export those goods and not have to pay the customs duties which allows you to be much more competitive in the marketplace. Right. And Carrie, how much is out there, how much duty is available to draw back for companies that are interested in it? Today we only recover about 25% of the 5 billion that's out there. So that means 1.2. 5 billion is the only amount recovered out of that 5 billion. So that's a lot of money being left on the table when you look at its 3.7.$5 billion that people are not recovering. So it's a lot of money left on the table. And we want to Itim wants to make sure that we're able to help these companies get a portion of that. So in preparing for this webinar today, we talked about how we could change our format. We've done webinars in the past, and so we opened up the discussion to people out out in the world and said, What do you want to hear about and what do you want to know about in regards to duty drawback with within your organization and an overwhelmed number of people wanted to know what industries we work with that provide the most lucrative opportunity and ones that we work with and ones that remain out there so that they have an understanding. If they're there, industry would be a good opportunity. Yeah, yeah. Well, we've worked with over the years, we worked with many, many industries. We've worked with the apparel industry, we've worked with the textile industry, we've worked with the food industry. We've worked with the aerospace industry. We've worked with the chemical industry. In fact, the chemical industry is near and dear to my heart. Because I trained as a chemical engineer many, many years ago. But the interesting thing about the industries we work with and is that the duty situation has changed in the United States. Historically, there has only been what they call the most favored nations duty. Those were duties that were paid on importation into the United States. But the the present the previous administration passed a law called the 301 terrorists. And what they did was they impose duties on anything almost anything that's come in from China. So the duty drawback opportunity today has widened the opportunity to get money back because companies that never paid duty before maybe exported their goods, but never had to pay a duty on importation didn't worry about paying tariffs. And because of the 301 tariffs, which can be as high as 25% of the value there is a way to get those monies back and it is through duty drawback. And that's really one of the reasons we're having this discussion today. It shows that people should be aware of the fact that they don't have to suffer with these duties if indeed they export, or maybe even if their customers export, which we'll get into in a little while. Should we talk about that now, about not being a direct importer or exporter and how you would put together a duty drawback program? Yes, So when we talk to clients or potential clients, we first ask a two part question to really help them determine if it's going to be viable for them. So the first part is how much duties have you paid over the past two years? And then the second part is with your overall sales, how much are you exporting So to give you an example, let's say X, Y, Z company pays 1 million in duties and they export 50% of their overall sales. You can kind of calculate that they're going to come in around 500,000 where we can look at getting 99% of that back for them. And then as far as being an importer, let's say let me give you an example. Let's say you are an importer and you bring in goods from outside the country and then you sell those goods to a domestic distributor. If that domestic distributor then exports outside of the U.S., that's an opportunity for you and we simply could go to them and ask for them to sign those export rights back over to the importer. Typically what happens is the importer pays all the duties. The exporter is the one who can actually claim the drawback and then vice versa. Let's say you are buying goods within the United States who are then the importers buying those outside, and now you are the exporter and you are sending those goods outside. Same process we can and the great thing about us is we can be very careful with pricing so we can sign non-nuclear disclosures. So if anyone's concerned about that, we can help them with that process. And often companies are more willing to work with us as a third disinterested party. Yes, because we don't have there's no sales information. They're passing along to us. We don't have anything invested in that. Yes. And it can all be protected. Right. So I think the most important thing for people to know is that you don't have to be an importer and or an exporter in order to put together a pretty decent duty drawback program. Absolutely. You just need one side of the equation. If you do import and pay all these duties, there might be a way to get them back, even though you don't export. Right. And conversely, if you export product, there might be an opportunity to get additional revenue because you haven't imported these things directly. And we do it all the time. Yeah, we do do it all the time. And it's gotten more interesting now with the new drawback law, you know, with FTA now there's there's a possible possibility of putting people together that might not have been able to link up otherwise with. A shared drawback. Absolutely. I think that's a very interesting subject. And I think it's something that probably would require a separate webinar that we can put on, but we really can't cover that all in this just at this opportunity is to bring people to let them look at duty drawback and see if there's an opportunity. But there are many, many aspects to drawback that people don't understand that I think we can educate them and help them increase their bottom line. And I also think it's important to note something you mentioned earlier is that you don't only have to export, but you can destroy merchandise that also allows you to file to the drawback. Absolutely. Yeah. So I think a lot of companies don't realize that you don't have to export if you destroy the merchandise that you can claim drawback on. In many food companies that bring goods into the country and have expiration dates and before they can distribute it need to be destroyed. And that creates an opportunity. You're absolutely right. Yeah. And also with wine and spirits, if they get something that they're not going to be able to resell again, you can look at destruction fabrication, donating. Your item. Right. So maybe we should tell people about they think they have an opportunity and they want to know a little bit, just a little bit about what's required to support the program, what are they going to have to provide to ITM in order to participate in the duty drawback program. So do you want to talk a little bit about that? Sure. There are really two phases to a drawback program, and we've ignored the fact that it's administered by the Department of Homeland Security Customs and Border Protection. And the first aspect is one needs to get an application in a ruling they've create. They've corrected me many times. The Customs Service, it used to be an application. It's now called the ruling. You need to get the ruling approved before you can do duty drawback And we take care of that in coordination with our clients. This requires one to take a trace of documentation from the time your order is placed on your vendor overseas. Told Time you receive the goods you put it into your inventory and then you subsequently get an order to export it out of the country. We also neglected to mention that there are two kinds of drawback there's manufacturing drawback in unused merchandise, drawback and unused merchandise comes in and it goes out. Manufacturing drawback. You bring in a raw material, you manufacture something and you then export it. So the opportunity we have to put together in determine which which one is applicable. We put this application in ruling into the government and we then start collecting the data. And the data we need to collect are the importation, the import papers and the export papers. One needs to make sure that you have all of the data in the proper order because you need to be compliant with the regulations. The regulations are very specific and you just can't do this in a haphazard manner. And it's very important to be working with somebody that's experienced and knows how to meet the requirements of the regulations. And we specialize in duty drawback. It's not something that it's an add on service. It's what we specialize in. And as we've said earlier, we've been doing it for almost 40 years, and we've gone into the depths of the regulations. We've helped develop the regulations, and we would make sure that all of our clients are compliant with the regulations, which is a very important part. I also think it's important to note that we not only have the experience in working with all these industries, but we've also worked with Customs during all this time, and we have ongoing relationship with all of the specialists at Customs, and we know them all by name and we've met with them in person. And so we have that ability to work through these drawback programs with customs in particular. That is important because dealing with the bureaucracy that our government surely is, it's it's very enlightening and helpful to know the people because the people are more than willing to work with you at a human level as opposed to a bureaucratic kind of a nightmare where you're thrown into this morass of regulations. And that's across the country. Like we work with companies not just in our regional area, but all over the United States, and we have those relationships with Customs all over the United States. And one of the things that I'm always being asked is during the process we mentioned we have to have tree documents and these things. Well, the great thing about ITM is that we assign a tariff manager to every single account that stays with you from the very beginning to the very end. And we have weekly kickoff meetings with them to kind of keep everybody on track and help guide them on whatever documents. So it's a true partnership between the company and us. Right. That's an excellent point because as you deal with companies, everybody gets excited about doing Drawback and then the other priorities come up and it's important to keep on focus because otherwise you'll never get to the endgame. And we need to do that. That's an excellent point. And we had this individual tariff managers are in place to work individually with the companies to give them the time and effort they need to accumulate the documentation. So the end result is money in their pocket? Yes. So maybe throughout the course of this discussion, people have determined that they pay enough duty and that they have the supporting information to file duty drawback. So what should they do now? They can either reach out on our website, which is tariff management dot com, or at the bottom of this, all the contact information for J Jill and myself will be there. They can reach us directly. All right. Great. And I think it's important. One last note is that we manage all of our duty drawback programs on a contingency basis, definitely. So that there are no upfront fees. Certainly call us and we can discuss your opportunity and if we think there's a viable program and you're going to have the support data, we'll get going. And we don't get paid until you get paid. And any questions is fully complimentary. So don't be afraid to give us a call. If you're just questioning if this might work for you or not, and definitely help you. That's right. Well, thank you all for joining us today. We hope you found this helpful and be on the lookout for emails. We're going to be asking what other topics you want to hear us talk about so that we can we can provide you with the information that you're looking for. And I want to thank Carrie and Jay for joining me today. And I think this was fun. Yeah. Thank you. Thank you for inviting me.