What is duty drawback?
Duty drawback is a refund of up to 99% of the duties, taxes and fees paid on imported goods that are later exported or destroyed.[1]
11 questions
Read the full answer
Can you give me an example of a duty drawback?
Yes. Say you paid $10,000 of duty to import 1,000 valves and later exported 400 of them unused (an illustration, not a client result).
Drawback can return up to 99% of the duty on those 400: up to $3,960, plus a share of the fees on that entry.
The detail
For a full worked file, see the demonstration file (synthetic data): Meridian Aerostructures, a fictional supplier, with 12 entries, 73 documents and 6 export shipments.
What is the difference between a duty drawback and a duty refund?
Drawback returns duty that was lawfully paid, because the goods later left the country or were destroyed.
Other duty refunds correct duty that was overpaid or that the law didn't support, through a correction, a protest or, for IEEPA duty, a CAPE declaration.
The detail
The two can touch the same entry, which is why their order matters; see Can I claim both an IEEPA refund and duty drawback on the same entry?
Is duty drawback still available?
Yes. Drawback remains law under 19 U.S.C. 1313, and CBP's drawback regulations have had no substantive change since 2021; the June 2024 edits touched only the appendices.
The detail
The 2026 duties feed it: Section 301, including the forced-labor and Brazil actions, the Section 122 surcharge and the Section 338 duties on Canada are all drawback-eligible.
Is duty drawback required?
No. Drawback is optional: the exporter, or the party it waives the right to, chooses whether to claim.
The detail
If you do claim, you must file within five years of import and keep the claim records for three years after the claim liquidates.
What are the types of duty drawback?
There are three main types: unused merchandise, manufacturing and rejected merchandise.
What is the difference between direct identification and substitution drawback?
Direct identification claims duty on the same goods you imported; substitution claims it on other goods of the same kind, matched by tariff classification.
How are exports matched back to imports?
Each export or destruction is tied to a specific import entry and line, either by tracing the same goods through your records or by substitution within the same 8-digit HTS subheading.
The detail
The agent proposes each match with its evidence: the export record, the import line and the document behind each.
Your broker reviews and approves every match before anything is filed.
What is AI duty drawback?
AI duty drawback means software reads your customs records and drafts each claim line with its evidence, while a licensed customs broker decides and files.
What types of duty drawback does NexQloud Drawback handle?
The agent drafts claims for unused merchandise (direct identification and substitution), manufacturing, rejected merchandise and destruction.
The detail
Every engagement also includes the IEEPA sequencing check.
We don't file CAPE declarations or protests, and we don't handle litigation; your broker, refund firm or counsel does.
A licensed customs broker, ours or yours, reviews every line and files.
Is NexQloud Drawback a government agency or a customs broker?
Neither. NexQloud Drawback is software from NexQloud AI Drawback, LLC, a NexQloud company.
The company is not a customs broker and does not file claims. A licensed customs broker, ours or yours, reviews every line and files.
Editorial
Sources and changes
Written by the NexQloud Drawback team from the primary sources linked on this page.
Change log
- First published.
Not legal advice. NexQloud Drawback is not a government agency.
NexQloud Drawback is software used by licensed customs brokers.
Get started
Read less. Run the demo.
Run the demo on a sample file. About three minutes.
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01
Upload one quarter.
Entry summaries, invoices and export records.
WhoYou
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02
AI drafts your claim.
It ties each export to its import, to the cent.
WhoThe agent
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03
Your broker files. CBP pays you.
The refund goes directly to your bank account.
WhoA licensed broker
Your email and name open the demo. We never ask for your ACE login or bank details.
Ready now? Start a claimIEEPA refunds
Got your IEEPA refund? Drawback is the one that repeats.
We check every entry for CAPE first, the order CBP recommends.[4] Drawback can recur every year.
Which tariffs qualify?
For partners
Be the firm that finds your clients a second refund.
Brokers earn the drawback fee. CPA firms bill their own work. Refund firms keep their CAPE clients. Design partners help shape it before launch.
Apply to partner
No fee to apply. We reply within 2 business days.
What is duty drawback?
A refund of up to 99% of the duties, taxes and fees you paid on imports that you later export or destroy, or that went into products you export.[1] It works in any industry.
When can I start?
We open to importers in waves, in the order of the waitlist. The demo shows the whole product with sample data today, and partners can apply now.
What will you need from me?
One quarter of records to start: entry summaries, invoices, packing lists, shipping documents, and export, return or destruction records.
How long until CBP pays?
With accelerated payment, CBP can pay before the claim is final. Its only published timing, from December 2018: processing "will generally take place within 3 weeks of the claim resubmission date."[15]
Can I use my own customs broker?
Yes. Invite your own broker, or use one we name before you sign. Your POA stays with your broker, and your broker sets its own fee.
What if CBP pays less than claimed?
The fee follows what CBP actually pays. If CBP later recovers part of a payment, the fee is reduced to match.
Do you file CAPE claims?
No. We check every entry for CAPE first and flag what belongs there. You or your broker files CAPE. Refund firms work through one of you.