Drawback rights transfer in M&A depending on transaction structure. Stock purchases: drawback rights pass automatically with the entity. Asset purchases: drawback rights pass only if specifically assigned through assignee designation. Pre-acquisition due diligence should identify and value any drawback recovery.
This guide covers Drawback Successor in Interest in M&A. Duty drawback recovers up to 99% of duty on imported goods that are subsequently exported, destroyed, or used to manufacture exported goods.
For SMB importers, the practical implementation depends on volume, sector, and specific operational structure.
Stock vs asset purchase
Stock: importer entity continues; drawback rights remain with the entity. Asset: drawback rights are transferable property and require explicit assignment.
Assignee designation
For asset deals, the seller assigns drawback rights to the buyer through formal designation filed with CBP.
Pre-acquisition due diligence
Identify all drawback rights of the target. Quantify expected recovery. Include in deal value.
Post-close filing
New owner files drawback claims under successor or assignee status. Documentation chain must support entitlement.
Frequently asked questions
When is this most relevant?
For SMB importers with active duty exposure or those evaluating duty mitigation options.
What documentation is required?
Varies by topic. Core: CBP Form 7501, supplier certificates, BOM analysis, manufacturing process documentation.
How long does this take to implement?
Simple cases 2-4 weeks; complex setups 8-16 weeks. Some moves require binding rulings adding 30-90 days.
What does this cost?
Project scope: $5,000-$25,000 for most engagements. Ongoing retainer for active operations.
How do I begin?
Book a 15-minute scoping call. We confirm fit and scope before any engagement.
Get started
Run a drawback opportunity audit on your import-export profile. Fixed-fee or contingency.