What impact did the NAFTA have on drawback?
The implementation of NAFTA imposed a variety of restrictions on the drawback programs of all three countries. In the United States, the substitution provision of same condition drawback was no longer available on exports to Canada and Mexico. Under substitution, a claimant could export domestically sourced merchandise and still file a drawback claim if they also imported the same commercially interchangeable merchandise. Substitution also made the drawback filing process much less burdensome in that an export could be matched with any commercially interchangeable import of the same style number imported within three years prior or the export date. NAFTA does still allow same condition drawback on exports on Canada and Mexico under the filing method of direct identification. Under direct ID, the claimant must match exports to imports either specifically using a lot number of serial number or using one of the acceptable direct identification accounting methodologies.
