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Short answer
Duty drawback is a refund of customs duties, taxes and fees that were paid on imported merchandise, available when that merchandise (or an article made from it) is later exported or destroyed. In the United States it is set by 19 U.S.C. 1313 and administered by U.S. Customs and Border Protection (CBP) under 19 CFR Part 190. There are three main routes: manufacturing, unused merchandise and rejected merchandise.
Definition and scope
CBP’s regulation defines drawback as “the refund, in whole or in part, of the duties, taxes, and/or fees paid on imported merchandise, which were imposed under Federal law upon entry or importation” (19 CFR 190.2, checked 2026-10-29). The same definition also covers refunds of internal revenue taxes paid on domestic alcohol under 19 U.S.C. 1313(d). Part 190 states that it contains the general provisions applicable to all drawback claims and the specialized provisions for the specific types of claims filed under 19 U.S.C. 1313 (19 CFR 190.0).
Drawback is a refund mechanism, not an exemption: the duties are paid at import and a claim is made afterwards. For unused merchandise, the statute provides in 19 U.S.C. 1313(l)(2)(B) for a refund equal to 99 percent of the duties, taxes and fees paid on the imported merchandise.
How it works in practice: the three types
The statute and the regulation organise drawback by what happened to the imported goods before they left the country or were destroyed. Part 190 mirrors this in its subparts: Subpart B covers manufacturing drawback (sections 190.21 to 190.29), Subpart C covers unused merchandise drawback (190.31 to 190.38) and Subpart D covers rejected merchandise drawback (190.41 to 190.45).
Manufacturing drawback
This route applies when imported merchandise is used in a manufacture or production. 19 CFR 190.2 defines manufacture or production as a process, including an assembly, by which merchandise “is either made into a new and different article having a distinctive name, character or use; or is made fit for a particular use even though it is not made into a new and different article.”
Unused merchandise drawback
Under 19 U.S.C. 1313(j)(1) the merchandise must be exported or destroyed before the close of the 5-year period beginning on the date of importation, and it must not have been “used within the United States” before that exportation or destruction. The regulation’s definition of unused merchandise is broader than “untouched”: it covers merchandise on which no operations were performed, or on which operations such as testing, cleaning, repacking, inspecting, sorting, refurbishing, repairing, relabeling or unpacking were performed, provided the operations do not amount to a manufacture or production (19 CFR 190.2).
Rejected merchandise drawback
Section 1313(c) covers merchandise that did not meet the order, with the statute citing merchandise “not conforming to sample or specifications” and, as a separate ground, merchandise “shipped without the consent of the consignee.” Like the other routes, it carries a 5-year window: the merchandise must be exported or destroyed within 5 years after the date of importation or withdrawal (1313(c)(1)(D)).
Types compared
| Type | What happens to the imported goods | Key condition quoted from the sources | Where it sits in 19 CFR Part 190 |
|---|---|---|---|
| Manufacturing | Used in a manufacture or production | Made into a new and different article with a distinctive name, character or use, or made fit for a particular use (190.2) | Subpart B, 190.21-190.29 |
| Unused merchandise | Exported or destroyed without being used in the United States | “is not used within the United States before such exportation or destruction” (19 U.S.C. 1313(j)(1)) | Subpart C, 190.31-190.38 |
| Rejected merchandise | Exported or destroyed because it did not match the order | “not conforming to sample or specifications” or shipped without the consignee’s consent (19 U.S.C. 1313(c)) | Subpart D, 190.41-190.45 |
Where it matters for labs, clinics and supply decisions
Laboratories, hospitals and research institutions that import instruments, consumables or reagents go through the same customs entry process as any importer, so the drawback rules are relevant whenever imported goods later leave the country or are destroyed. Two rules in the sources apply to every route:
- Time limit. Claims must be made no later than 5 years after the date the merchandise was imported (19 U.S.C. 1313(r)(1)). Claims not completed in that period are considered abandoned.
- Electronic filing. Drawback claims filed on and after the date that is 2 years after February 24, 2016 must be filed electronically (19 U.S.C. 1313(r)(4)).
The unused-merchandise definition lists testing, cleaning, inspection and repacking among permitted operations, which is the part of the rules closest to equipment that is evaluated and then re-exported; the statutory bar on use within the United States still applies. Customs duties on research equipment are one cost line among others. For the wider picture of how equipment is classified and costed in a research budget, see capital equipment and total cost of ownership; for the sourcing process itself, see the guide to RFPs for lab and research equipment procurement.
Drawback is separate from export-control rules. Equipment that leaves the country may also be subject to an ECCN classification and export-controlled research requirements, which are governed by different regulations.
Common misunderstandings
- “Drawback is automatic.” It is claimed: the regulation defines it as a refund authorized for payment by CBP, and the statute treats claims not completed within 5 years as abandoned.
- “Unused means untouched.” The regulation’s definition lets certain operations such as testing, cleaning, inspecting and repacking be performed, as long as they do not amount to a manufacture.
- “Only exporting qualifies.” The statute’s rejected-merchandise provision refers to exportation or destruction, and the unused provision does the same. The regulation defines destruction as destroying articles or merchandise “to the extent that they have no commercial value.”
- “The refund covers everything paid.” The 99 percent figure in 1313(l)(2)(B) is expressed as a share of the duties, taxes and fees paid on the imported merchandise, not of the full amount paid in total.
- “The pre-2016 rules still apply to new claims.” Part 190 notes that claims under the earlier rules are in part 191.
FAQ
What is duty drawback?
A refund of the duties, taxes and fees paid on imported merchandise, made when the merchandise or an article made from it is exported or destroyed (19 CFR 190.2).
How long do you have to claim it?
Not later than 5 years after the date the merchandise was imported (19 U.S.C. 1313(r)(1)).
Do claims have to be filed electronically?
Yes, for claims filed on and after the date that is 2 years after February 24, 2016 (19 U.S.C. 1313(r)(4)).
What does “unused merchandise” mean for drawback?
Imported merchandise on which no operations were performed, or only operations that do not amount to a manufacture or production, as listed in 19 CFR 190.2, and which was not used within the United States before exportation or destruction.
What counts as destruction for drawback?
The regulation defines destruction as destroying articles or merchandise “to the extent that they have no commercial value” (19 CFR 190.2).
Sources
- 19 U.S.C. 1313, Drawback and refunds: law.cornell.edu/uscode/text/19/1313 (checked 2026-10-29)
- 19 CFR 190.2, Definitions: law.cornell.edu/cfr/text/19/190.2 (checked 2026-10-29)
- 19 CFR 190.0, Scope: law.cornell.edu/cfr/text/19/190.0 (checked 2026-10-29)
This page is general information about the text of the statute and regulations, not customs or legal advice.
