DRAWBACK AND REFUNDS.

SEC. 632. DRAWBACK AND REFUNDS. (a) Amendments.— Section 313 (19 U.S.C. 1313) is amended as follows: (1) Subsection (a) is amended— (A) by inserting “or destruction under customs supervision” after “Upon the exportation”; (B) by inserting “provided that those articles have not been used prior to such exportation or destruction,” after “manufactured or produced in the United States with the use of imported merchandise,”; (C) by inserting “or destruction” after “refunded upon the exportation”; and 107 STAT. 2193 (D) by striking out “wheat imported after ninety days after the date of the enactment of this Act” and inserting “imported wheat”. (2) Subsection (b) is amended— (A) by striking out “duty-free or domestic merchandise” and inserting “any other merchandise (whether imported or domestic)”; (B) by inserting “, or destruction under customs supervision,” after “there shall be allowed upon the exportation”; (C) by inserting “or destroyed” after “notwithstanding the fact that none of the imported merchandise may actually have been used in the manufacture or production of the exported”; (D) by inserting “, but only if those articles have not been used prior to such exportation or destruction” after “an amount of drawback equal to that which would have been allowable had the merchandise used therein been imported”; and (E) by inserting “or destruction under customs supervision” after “but the total amount of drawback allowed upon the exportation”. (3) Subsection (c) is amended to read as follows: “(c) Merchandise Not Conforming to Sample or Specifications.— Upon the exportation, or destruction under the supervision of the Customs Service, of merchandise— “(1) not conforming to sample or specifications, shipped without the consent of the consignee, or determined to be defective as of the time of importation; “(2) upon which the duties have been paid; “(3) which has been entered or withdrawn for consumption; and “(4) which, within 3 years after release from the custody of the Customs Service, has been returned to the custody of the Customs Service for exportation or destruction under the supervision of the Customs Service; the full amount of the duties paid upon such merchandise, less 1 percent, shall be refunded as drawback.”. (4) Subsection (j) is amended to read as follows: “(j) Unused Merchandise Drawback.— “(1) If imported merchandise, on which was paid any duty, tax, or fee imposed under Federal law because of its importation— “(A) is, before the close of the 3-year period beginning on the date of importation— “(i) exported, or “(ii) destroyed under customs supervision; and “(B) is not used within the United States before such exportation or destruction; then upon such exportation or destruction 99 percent of the amount of each duty, tax, or fee so paid shall be refunded as drawback. The exporter (or destroyer) has the right to claim drawback under this paragraph, but may endorse such right to the importer or any intermediate party. “(2) If there is, with respect to imported merchandise on which was paid any duty, tax, or fee imposed under Federal law because of its importation, any other merchandise (whether imported or domestic), that— 107 STAT. 2194 “(A) is commercially interchangeable with such imported merchandise; “(B) is, before the close of the 3-year period beginning on the date of importation of the imported merchandise, either exported or destroyed under customs supervision; and “(C) before such exportation or destruction— “(i) is not used within the United States, and “(ii) is in the possession of, including ownership while in bailment, in leased facilities, in transit to, or in any other manner under the operational control of, the party claiming drawback under this paragraph, if that party— “(I) is the importer of the imported merchandise, or “(II) received from the person who imported and paid any duty due on the imported merchandise a certificate of delivery transferring to the party the imported merchandise, commercially interchangeable merchandise, or any combination of imported and commercially interchangeable merchandise (and any such transferred merchandise, regardless of its origin, will be treated as the imported merchandise and any retained merchandise will be treated as domestic merchandise); then upon the exportation or destruction of such other merchandise the amount of each such duty, tax, and fee paid regarding the imported merchandise shall be refunded as drawback, but in no case may the total drawback on the imported merchandise, whether available under this paragraph or any other provision of law or any combination thereof, exceed 99 percent of that duty, tax, or fee. “(3) The performing of any operation or combination of operations (including, but not limited to, testing, cleaning, repacking, inspecting, sorting, refurbishing, freezing, blending, repairing, reworking, cutting, slitting, adjusting, replacing components, relabeling, disassembling, and unpacking), not amounting to manufacture or production for drawback purposes under the preceding provisions of this section on— “(A) the imported merchandise itself in cases to which paragraph (1) applies, or “(B) the commercially interchangeable merchandise in cases to which paragraph (2) applies, shall not be treated as a use of that merchandise for purposes of applying paragraph (1)(B) or (2)(C).”. (5) Subsection (1) is amended by striking out “the fixing of a time limit within which drawback entries or entries for refund under any of the provisions of this section or section 309(b) shall be filed and completed ” and inserting “the authority for the electronic submission of drawback entries”. (6) Subsection (p) is amended to read as follows: “(p) Substitution of Finished Petroleum Derivatives.— “(1) In general.— Notwithstanding any other provision of this section, if— “(A) an article (hereafter referred to in this subsection as the ‘exported article’) of the same kind and quality as a qualified article is exported; 107 STAT. 2195 “(B) the requirements set forth in paragraph (2) are met; and “(C) a drawback claim is filed regarding the exported article; the amount of the duties paid on, or attributable to, such qualified article shall be refunded as drawback to the drawback claimant. “(2) Requirements.— The requirements referred to in paragraph (1) are as follows: “(A) The exporter of the exported article— “(i) manufactured or produced the qualified article in a quantity equal to or greater than the quantity of the exported article, “(ii) purchased or exchanged, directly or indirectly, the qualified article from a manufacturer or producer described in subsection (a) or (b) in a quantity equal to or greater than the quantity of the exported article, “(iii) imported the qualified article in a quantity equal to or greater than the quantity of the exported article, or “(iv) purchased or exchanged, directly or indirectly, an imported qualified article from an importer in a quantity equal to or greater than the quantity of the exported article. “(B) In the case of the requirement described in subparagraph (A)(ii), the manufacturer or producer produced the qualified article in a quantity equal to or greater than the quantity of the exported article. “(C) In the case of the requirement of subparagraph (A)(i) or (A)(ii), the exported article is exported during the period that the qualified article described in subparagraph (A)(i) or (A)(ii) (whichever is applicable) is manufactured or produced, or within 180 days after the close of such period. “(D) In the case of the requirement of subparagraph (A)(i) or (A)(ii), the specific petroleum refinery or production facility which made the qualified article concerned is identified. “(E) In the case of the requirement of subparagraph (A)(iii) or (A)(iv), the exported article is exported within 180 days after the date of entry of an imported qualified article described in subparagraph (A)(iii) or (A)(iv) (whichever is applicable). “(F) Except as otherwise specifically provided in this subsection, the drawback claimant complies with all requirements of this section, including providing certificates which establish the drawback eligibility of articles for which drawback is claimed. “(G) The manufacturer, producer, importer, exporter, and drawback claimant of the qualified article and the exported article maintain all records required by regulation. “(3) Definition of qualified article, etc.— For purposes of this subsection— “(A) The term ‘qualified article’ means an article— “(i) described in— 107 STAT. 2196 “(I) headings 2707, 2708, 2710, 2711, 2712, 2713, 2714, 2715 2901, and 2902 of the Harmonized Tariff Schedule of the United States, or “(II) headings 3901 through 3914 of such Schedule (as such headings apply to liquids, pastes, powders, granules, and flakes), and “(ii) which is— “(I) manufactured or produced as described in subsection (a) or (b) from crude petroleum or a petroleum derivative, or “(II) imported duty-paid. “(B) An exported article is of the same kind and quality as the qualified article for which it is substituted under this subsection if it is a product that is commercially interchangeable with or referred to under the same eight-digit classification of the Harmonized Tariff Schedule of the United States as the qualified article. “(C) The term ‘drawback claimant’ means the exporter of the exported article or the refiner, producer, or importer of such article. Any person eligible to file a drawback claim under this subparagraph may designate another person to file such claim. “(4) Limitation on drawback.— The amount of drawback payable under this subsection shall not exceed the amount of drawback that would be attributable to the article— “(A) manufactured or produced under subsection (a) or (b) by the manufacturer or producer described in clause (i) or (ii) of paragraph (2)(A), or “(B) imported under clause (iii) or (iv) of paragraph (2)(A).”. (7) The following new subsections are inserted after subsection (p): “(q) Packaging Material.— Packaging material, when used on or for articles or merchandise exported or destroyed under subsection (a), (b), (c), or (j), shall be eligible under such subsection for refund, as drawback, of 99 percent of any duty, tax, or fee imposed under Federal law on the importation of such material. “(r) Filing Drawback Claims.— “(1) A drawback entry and all documents necessary to complete a drawback claim, including those issued by the Customs Service, shall be filed or applied for, as applicable, within 3 years after the date of exportation or destruction of the articles on which drawback is claimed, except that any landing certificate required by regulation shall be filed within the time limit prescribed in such regulation. Claims not completed within the 3-year period shall be considered abandoned. No extension will be granted unless it is established that the Customs Service was responsible for the untimely filing. “(2) A drawback entry for refund filed pursuant to any subsection of this section shall be deemed filed pursuant to any other subsection of this section should it be determined that drawback is not allowable under the entry as originally filed but is allowable under such other subsection. “(s) Designation of Merchandise by Successor.— “(1) For purposes of subsection (b), a drawback successor may designate imported merchandise used by the predecessor before the date of succession as the basis for drawback on 107 STAT. 2197articles manufactured by the drawback successor after the date of succession. “(2) For purposes of subsection (j)(2), a drawback successor may designate— “(A) imported merchandise which the predecessor, before the date of succession, imported; or “(B) imported merchandise, commercially interchangeable merchandise, or any combination of imported and commercially interchangeable merchandise for which the successor received, before the date of succession, from the person who imported and paid any duty due on the imported merchandise a certificate of delivery transferring to the successor such merchandise; as the basis for drawback on merchandise possessed by the drawback successor after the date of succession. “(3) For purposes of this subsection, the term ‘drawback successor’ means an entity to which another entity (in this subsection referred to as the ‘predecessor’) has transferred by written agreement, merger, or corporate resolution— “(A) all or substantially all of the rights, privileges, immunities, powers, duties, and liabilities of the predecessor; or “(B) the assets and other business interests of a division, plant, or other business unit of such predecessor, but only if in such transfer the value of the transferred realty, personalty, and intangibles (other than drawback rights, inchoate or otherwise) exceeds the value of all transferred drawback rights, inchoate or otherwise. “(4) No drawback shall be paid under this subsection until either the predecessor or the drawback successor (who shall also certify that it has the predecessor’s records) certifies that— “(A) the transferred merchandise was not and will not be claimed by the predecessor, and “(B) the predecessor did not and will not issue any certificate to any other person that would enable that person to claim drawback. “(t) Drawback Certificates.— Any person who issues a certificate which would enable another person to claim drawback shall be subject to the recordkeeping provisions of this chapter, with the retention period beginning on the date that such certificate is issued. “(u) Eligibility of Entered or Withdrawn Merchandise.— Imported merchandise that has not been regularly entered or withdrawn for consumption shall not satisfy any requirement for use, exportation, or destruction under this section. “(v) Multiple Drawback Claims.— Merchandise that is exported or destroyed to satisfy any claim for drawback shall not be the basis of any other claim for drawback; except that appropriate credit and deductions for claims covering components or ingredients of such merchandise shall be made in computing drawback payments.”. (b) Application of Amendment to Finished Petroleum Derivatives.— Notwithstanding section 514 of the Tariff Act of 1930 (19 U.S.C. 1514) or any other provision of law, the amendment made by paragraph (6) of subsection (a) shall apply to— (1) claims filed or liquidated on or after January 1, 1988, and 107 STAT. 2198 (2) claims that are unliquidated, under protest, or in litigation on the date of the enactment of this Act.