How to prepare for a Duty Drawback Program claim
You should be able to support the claim with records that show the duties paid, how the goods moved or were used after import, and the export or qualifying activity connected to the claim.
The Duty Drawback Program can create an opportunity to recover duties after goods have moved through your supply chain.
But before using the program or submitting a claim, you need a clear picture of what happened to your goods after import. This will help you assess whether they followed a path that could support a drawback claim.
In this article, we outline what you need to check before using the Duty Drawback Program, so you understand where opportunities may exist and what support you'll need to back them up.
What to review before using the Duty Drawback Program
To prepare for a Duty Drawback Program claim, you must review the original import through to the later export or qualifying use of the goods. Use the following steps for guidance:
Confirm what happened to the goods after import
Start by identifying the path the goods followed after they entered Canada. Were they exported in the same condition, used to produce other goods for export, transferred to another party, or handled in another way?
Connect the import to the export or qualifying use
A drawback claim depends on traceability. CBSA requires supporting documentation to establish that the goods qualify, which may include a copy of the export sales invoice, a bill of lading or other shipping document, and any other proof of export or additional information needed to verify the validity of the claim.
Drawback claims can be submitted through the CARM Client Portal (CCP), with supporting documentation attached.
Identify the parties involved
The importer, owner, processor, producer, and exporter of a shipment may all be different parties. Before using the program, confirm who was involved at each stage and whether supporting documents, certificates, or waivers are required.
Check the claim period
Even when goods appear to qualify, a duty drawback claim must be made within four years of the release date of the imported goods. A five-year period applies to spirits used in the manufacture of exported distilled spirits and to claims involving obsolete or surplus goods that are destroyed under the applicable CBSA rules.
If a claim is later selected for a CBSA review, having that timeline and supporting documentation in order makes the process much smoother.
Flag any special circumstances
Some situations may require closer review, such as goods used in manufacturing, goods exported by another party, obsolete or surplus goods, or goods transferred before export.
Goods exported to the United States or Mexico are also worth flagging early. CUSMA may limit the amount of duty that can be refunded by drawback for certain goods.
Considering other duty deferral options
The Duty Drawback Program may be the right option when duties have already been paid, and the goods later qualify for a refund. However, it is only one part of Canada’s broader duty deferral framework.
As you review a potential drawback claim, it’s worth considering whether another duty deferral option would better fit similar shipments in the future.
If you know before import that the goods will be exported, the Duties Relief Program may help relieve duties before you pay them.
If the goods will be stored in Canada before they are released into the Canadian market or exported, the Customs Bonded Warehouse Program may help you defer duties and taxes while the goods remain in the warehouse.
How we can help
At Cole International, we offer trade consulting and customs brokerage services to help Canadian businesses assess duty drawback opportunities and manage import and export requirements.
Reach out to one of our trade professionals to discuss whether the Duty Drawback Program may apply to your goods.
