House Ways and Means Committee Chairman Kevin Brady, R-Texas, and Ways and Means Trade Subcommittee Chairman Dave Reichert, R-Wash., in a letter to key Trump administration officials pressed U.S. Customs and Border Protection to issue Trade Facilitation and Trade Enforcement Act (TFTEA) drawback regulations immediately.
The Court of International Trade (CIT) in a June 29 ruling said it would consider imposing its own deadline for issuance of TFTEA drawback regulations if CBP couldn’t issue a proposed regulation for notice and comment “on or about” July 5, as that marked the end of the 90-day statutory review period for the draft regulatory package, which Treasury sent to the Office of Management and Budget (OMB) on April 6.
If the government is unable to “promptly” issue the entire regulatory package under consideration, the government should consider whether parts of the regulatory package satisfying the TFTEA drawback mandate can be published in advance of any unresolved portions of the regulatory package, CIT said.
In the case, Tabacos de Wilson v. United States, several customs brokers and importers challenged CBP’s refusal to grant accelerated payment privileges for drawback claims until the regulatory package containing the new drawback calculation method is final, according to the letter to CBP Commissioner Kevin McAleenan, Treasury Secretary Steven Mnuchin, OMB Director Mick Mulvaney and OMB Office of Information and Regulatory Affairs Administrator Neomi Rao.
Although CBP deployed the core TFTEA drawback in the Automated Commercial Environment on Feb. 24, the agency exceeded the legislative deadline of Feb. 24 to issue TFTEA drawback-implementing regulations, “in violation of the law,” CIT stated.
The court noted that TFTEA provides a transition year until Feb. 23, 2019, during which claimants may file claims under the pre-TFTEA drawback mechanism or under the TFTEA-provided mechanism.
Among other changes, TFTEA drawback is to allow for simplified procedures, including the ability to use eight-digit Harmonized Tariff Schedule subheadings or Export Schedule B numbers to claim substitution drawback, instead of using part numbers, which was the basis of the pre-TFTEA substitution method.
“We are particularly concerned that noncompliance has greatly complicated drawback claims, particularly given CBP’s refusal to grant accelerated payment until the regulatory package is final,” Brady and Reichert wrote. “Accordingly, we agree with the court that the agencies should issue those portions of the regulations that would bring them into compliance with the TFTEA mandate and that it should do so through an Interim Final Rule so that U.S. manufacturers can fully utilize the duty drawback program without further delay, as intended by Congress.”
CBP will reply directly to the committee regarding the issue, an agency spokesperson said.