Rejected Merchandise Drawback

Duty-paid goods that were entered or withdrawn for consumption and then rejected for one of the reasons in 19 U.S.C. 1313(c)(1):

• they did not conform to sample or specifications;
• they were shipped without the consignee's consent;
• they were defective at the time of import; or
• they were sold at retail and, for any reason, returned to and accepted by the importer or the party that received them from the importer.

The goods must be exported or destroyed under CBP supervision within five years after the date of import (1313(c)(1)(D)); exports after that are denied (19 CFR 190.42(a)).

Not physically, in most cases. The statute dropped the requirement to return the goods to CBP custody in 2004. The regulation still uses the term: you file a notice of intent on CBP Form 7553 at least 5 working days before the intended return to CBP custody (19 CFR 190.42(c)), and if CBP waives examination, or does not respond within 2 working days, the goods are deemed returned to custody. If CBP decides to examine them, you present the goods. Destroying rejected goods instead takes 7 working days' notice (190.71(a)), and the value of anything recovered from the destruction is deducted. A waiver of prior notice removes the need for these notices.

Only for retail returns. A retailer claiming on returned goods can designate an import made within one year before the export or destruction, if it has the same 8-digit HTS subheading and the same specific product identifier, such as a part number, SKU or product code (19 U.S.C. 1313(c)(2); 19 CFR 190.45(b)). Defective or nonconforming goods must be the goods that were imported. If goods qualify both ways, you can claim them as unused merchandise under 1313(j)(1) instead (190.43).

• A complete claim in ACE with the rejected merchandise basis code (19 CFR 190.51(a)).
• Evidence of the defect, the nonconformity or the lack of consent (190.42(b)), or the retail-return certification for returned goods (190.45(b)(2)(ii)).
• Proof of export (190.72), or evidence of destruction from a third party (190.71(b)).
• If you are not the importer: a statement, signed by the importer and every other owner except the ultimate purchaser, that no other drawback claim was made on the goods, plus a records certification (190.42(b)).

The refund is 99% of the duties, taxes and fees paid (190.45(c)), and the claim is due within five years of import like every other drawback claim. See the drawback claim deadline.

DrawbackAI by Stable Software handles rejected merchandise claims alongside unused merchandise, substitution and manufacturing claims, and customs brokers file them for their importer clients under their own filer code and POA. Flat software license. No contingency, no percentage of the refund. See DrawbackAI.