Thank you for tuning in with us today. I'm Carrie Irwin with International Tariff Management, and I'm the director of sales. Today, we're going to discuss destruction, drawback opportunities for all our importers and exporters out there. My guest today is Jill La Madeleine, who is the vice president and a licensed customs broker with ITM. Jill has been with ITM for over 25 years and works regularly with destruction drawback.
Hello, Jill.
Hi, Kerry. Thanks for having me today.
Great to have you. Could you tell us what is destruction Drawback destruction?
Drawback is the eligibility to claim drawback on items that are destroyed in the United States that have once been imported and duty paid. So for the purposes of drawback, a lot of claimants are aware that you can import a product into the country, pay a duty on it and export it.
But you can also import product into the United States, destroy it in the United States so completely that it has no commercial value. And also claim drawback on those products that are destroyed. Great. Could you tell us why would a company destroy their goods? There are various reasons that a company would destroy their goods. The number one reason would be that they're defective, that they were imported and they didn't meet Specification.
They had been destroyed, not destroyed. They had been ruined in some way in the warehouse also for food items that have expired. One may want to destroy them in the United States and take advantage of duty. Drawback or items could be outdated and no longer salable because they're out of fashion or outdated. What types of industries and or products do you feel take advantage of destruction drawback the most?
I would say that the ones who take advantage the most are food and edible items. For example, we have a dairy company that we had worked with. They were exploring the opportunity of opening a warehouse in the United States. Before they did that, they wanted to see if there was a market for their product. So they imported a whole bunch of yogurt and they sold some domestically.
And throughout the course of doing studies and finding out if there was a market for it, a lot of that yogurt expired and clearly they couldn't sell it at that point and they weren't going to ship it back out of the country. So we put together a duty drawback program for them, and they destroyed the the expired yogurt.
And we were able to recover over $1,000,000 in duty for them just on the imported yogurt that was destroyed in the United States. That's great for them, huh? Yes. Yeah, It was a very good little program. I know, too. I'm from the fashion industry, and I know that fashion and textiles will do destruction due to "deadstock" things not moving.
And then also luxury brands would rather destroy products than risk products such as logo, purse, getting into the wrong hands and selling authentic goods at a discount. They really do not want to devalue their brand right? That makes perfect sense. And we've worked with some companies in that situation where they've wanted to control who got their hands on their their products, and they would rather destroy them in the United States than have them go for retail.
Yes. What is the process? What are they going to have to go through for destroyed merchandise? Well, when you claim duty drawback and destroyed merchandise, that's very similar to the the standard drawback program. So you want to apply for privileges because drawback is a privilege, not a rig
We hope you will gain some valuable insight into the world of customs tariffs. With all the supply chain challenges the world is facing, our aim is to maximize your duty drawback dollars and boost your bottom line. We hope you'll subscribe to our podcast to stay current with each new episode in which will unveil numerous ways to improve your international trade profitability. Thanks for listening.
Thank you for tuning in with us today. I'm Carrie Irwin with International Tariff Management, and I'm the director of sales. Today, we're going to discuss destruction, drawback opportunities for all our importers and exporters out there. My guest today is Jill La Madeleine, who is the vice president and a licensed customs broker with ITM. Jill has been with ITM for over 25 years and works regularly with destruction drawback.
Hello, Jill.
Hi, Kerry. Thanks for having me today.
Great to have you. Could you tell us what is destruction Drawback destruction?
Drawback is the eligibility to claim drawback on items that are destroyed in the United States that have once been imported and duty paid. So for the purposes of drawback, a lot of claimants are aware that you can import a product into the country, pay a duty on it and export it.
But you can also import product into the United States, destroy it in the United States so completely that it has no commercial value. And also claim drawback on those products that are destroyed. Great. Could you tell us why would a company destroy their goods? There are various reasons that a company would destroy their goods. The number one reason would be that they're defective, that they were imported and they didn't meet Specification.
They had been destroyed, not destroyed. They had been ruined in some way in the warehouse also for food items that have expired. One may want to destroy them in the United States and take advantage of duty. Drawback or items could be outdated and no longer salable because they're out of fashion or outdated. What types of industries and or products do you feel take advantage of destruction drawback the most?
I would say that the ones who take advantage the most are food and edible items. For example, we have a dairy company that we had worked with. They were exploring the opportunity of opening a warehouse in the United States. Before they did that, they wanted to see if there was a market for their product. So they imported a whole bunch of yogurt and they sold some domestically.
And throughout the course of doing studies and finding out if there was a market for it, a lot of that yogurt expired and clearly they couldn't sell it at that point and they weren't going to ship it back out of the country. So we put together a duty drawback program for them, and they destroyed the the expired yogurt.
And we were able to recover over $1,000,000 in duty for them just on the imported yogurt that was destroyed in the United States. That's great for them, huh? Yes. Yeah, It was a very good little program. I know, too. I'm from the fashion industry, and I know that fashion and textiles will do destruction due to "deadstock" things not moving.
And then also luxury brands would rather destroy products than risk products such as logo, purse, getting into the wrong hands and selling authentic goods at a discount. They really do not want to devalue their brand right? That makes perfect sense. And we've worked with some companies in that situation where they've wanted to control who got their hands on their their products, and they would rather destroy them in the United States than have them go for retail.
Yes. What is the process? What are they going to have to go through for destroyed merchandise? Well, when you claim duty drawback and destroyed merchandise, that's very similar to the the standard drawback program. So you want to apply for privileges because drawback is a privilege, not a rig
We hope you will gain some valuable insight into the world of customs tariffs. With all the supply chain challenges the world is facing, our aim is to maximize your duty drawback dollars and boost your bottom line. We hope you'll subscribe to our podcast to stay current with each new episode in which will unveil numerous ways to improve your international trade profitability. Thanks for listening.