What are some of the advantages of substitution?
To use an example, assume that a company imports garlic from China and that they also purchase the same garlic from a farm in Gilroy, CA. The garlic meets the exact same industry specifications, and it is co-mingled in inventory. When the company exports the garlic to a customer they cannot determine whether the garlic came from the domestic source or from China. Substitution allows a claimant to match an export from a domestic lot against an import of commercially interchangeable merchandise. The export does not need to be traced to a specific import. To add another element to the example, assume that the company only imports from China; however, beginning in January of 1999 the imported garlic from China is now free of duty. Any exports after January ’99 will strictly contain duty free lots of imported material. The substitution provision allows us to continue to file drawback by matching the export containing duty free imports against the older dutiable imports, once again, as long
