Issue 301, May 8, 2001
Proof of exportation for duty drawback issue is the quintessential moving target. Admittedly, Customs states that this topic, "..is probably the most paper-intensive and costly part of a drawback program for claimants and many times, it is open to interpretation as to whether or not a given bill of lading is sufficient to prove export.." How this issue has evolved over time speaks volumes about Customs' administration of the drawback laws. Prior to the regulations that went into effect in April 1998, the burden on drawback claimants was less than the requirement(s) of today. The previous drawback regulations held in 19 C.F.R. §191.52(c)(2):

"...shall be supported by documentary evidence of exportation, such as the bill of lading, air waybill, freight waybill, Canadian Customs manifest, cargo manifest, or certified copies thereof, issued by the exporting carrier."

For a long period of time, Customs had a position that an unsigned, non-negotiable bill of lading would satisfy the above. This position was stated in C.S.D. 82-59 wherein Customs held that the term "issued" does not mean "signed," "certified" or "authenticated." However, the regulations that are in effect now hold a different position. This is provided in §191.72(a):

"Actual evidence of exportation consisting of documentary evidence, such as an originally signed bill of lading, air waybill, freight waybill, Canadian Customs manifest, and/or cargo manifest, or certified copies thereof, issued by the exporting carrier."

The largest distinction is the signature. This part of the regulation never appeared in any of the draft proposals. It only appeared in the final rule, and Customs disregarded the comments on how this was a substantive change from the past. Due to the feedback from the trade, Customs issued a memorandum dated April, 4 1998 signed on behalf of Mr. Philip Metzger. In this document, Customs stated that, "Certification must be made by the exporter, claimant or authorized agent and must state that the bill of lading or other documentation establishing export is a true copy of the original document."

Unfortunately, Customs has come out with new operating procedures this past October, and the bar has been raised again. Now, Customs can ask for proof of export, and it must be certified by a "disinterested third party." Now remains the question: Who would know the facts of the transaction and be disinterested?

Hopefully, the industry and Customs can come together and work out a strategy that meets the statutory burden while at the same time not establishing impediments for claimants to overcome.

Our contributing writer, Bobby Waid, is the Executive Vice President of Danzas AEI Duty Drawback Services, located in Katy, Texas. If you have any questions or comments regarding this subject, you can contact Mr. Waid via bwaid@danzasaeidrawback.com or at 281-578-9605.

Please note that due to the complex nature of the subject matter, Danzas AEI cannot be responsible for actions taken by the reader in reliance on the information contained herein without prior consultation with Danzas AEI.