The delays arose from the complications introduced in 1958 by the substitution provision, and from administrative problems resulting from the increase in customs entries, the revision of the tariff schedules in 1963, and the reorganization of the Customs Service in 1965-66. A certificate of importation indicating the amount of duty paid is not issued on an entry until computation or ascertainment of the duty, when the entry is said to have been liquidated. The backlog

of unliquidated entries more than 30 days old increased from 642,000 at the end of 1960 to a peak of 1,381,000 in 1966. It was reduced to 982,000 in 1967, when it amounted to something more than 5 months' entries. The number of unliquidated drawback claims at that time was 10,697, a backlog of about the same proportion.

Region

Until 1967, the New York customs district generally accounted for about a third of the drawback payments and Detroit, Philadelphia, and Miami together accounted for another third. The remainder was distributed among 35 ports, a number of which made payments of less than $5,000 a year. In 1967, the work on drawback formerly done at Detroit and Philadelphia was shifted to regional offices at Chicago and Baltimore and that in the total United States was consolidated in nine regional offices. The change was accompanied by a shift in the regional distribution, as the result of large payments on petroleum products, particularly in the Houston (Texas) region. Drawback payments by customs region are shown in table 2.

Imported materials

As shown by data in the annual report of the Secretary of the Treasury (table 3), duties refunded under drawback are collected on many kinds of imported material, 10 of which (steel, lead, aluminum, petroleum, tobacco, sugar, watch movements, coal-tar derivatives, other chemicals, and frozen orange juice) account for two-thirds to three-fourths of the total. Duties refunded on the principal materials have increased since 1959 with the increase in the total. More than a ten-fold increase has occurred for orange juice, petroleum, and coal-tar products, and a three- to six-fold increase, for steel, aluminum, and chemicals other than coal-tar. Relatively little increase, on the other hand, has occurred for tobacco and sugar.

The duties refunded under drawback have been a small part of the total collected except on a few articles, principally petroleum (in 1967), concentrated orange juice, cigarette paper, steel slabs and billets, unwrought aluminum, and several chemicals. The chemicals are ethyl alcohol, methyl alcohol, vanillin, ethylene oxide, butanediol, polyalkylbenzene, acrylonitrile polymer resin, and adipic acid. With the exception of vanillin and polyalkylbenzene, these chemicals have all been entered by the producers themselves, to meet a temporary need. Exported articles

Drawback was paid in the calendar year 1967 on articles valued

at $3.4 billion, equal to 11 percent of U.S. exports. The drawback, $51 million, equaled 1 percent of the value of the articles.

Nine-tenths of the total was paid on 27 articles, chiefly petroleum products, motor vehicles and assemblies, steel, cigarettes, and aluminum. On a few of the principal articles, including frozen orange juice, oil additives, and watches, the drawback was appreciable in relation to the value, but on most of them it equaled less than 3 percent, and on several, including cigarettes, steel, and motor vehicles and assemblies, it equaled less than 1 percent of the value. There were several hundred articles on which the drawback in 1967 was small (less than $100,000). On these articles as a group, which were valued at $515 million, the drawback, $4.7 million, was equivalent to nine-tenths of one percent of the value.

The value of articles on which drawback was paid in 1967 and the amount of the drawback are shown by article in the accompanying table, and are shown in conjunction with total exports and imported materials used in table 4 of the appendix. The two tables, unlike those discussed before, are on a calendar year basis.

Exports and

imports involved, although shown for the same year, would generally

have occurred in an earlier year than that on which the drawback was paid.

Estimated value of articles on which drawback was paid in 1967. Although taken as representative of the annual rate, the articles would often have been exported over a different period.

2/ The amounts shown in these columns are gross amounts. They do not reflect the amounts actually recovered after expenses nor do they reflect the lower levels of duties recoverable on many imported materials currently being imported.

A discussion of the principal articles on which drawback is paid

follows.

Condensed milk. --That on which drawback is paid is valued at $12 to $16 million annually, and nearly equals total U.S. exports of condensed milk. The annual drawback is $149,000 to $203,000. It represents the return of duty on 23 million to 32 million pounds of sugar per year valued at $470,000 to $615,000. Annual data are given in the following tabulation:

The drawback, of 0.6 cent a pound, on the sugar used results in

a saving of about 2 percent in the cost of the condensed milk. Imports of sugar, however, are subject both to duty and import quota. The saving from drawback of the duty, when combined with the saving (under separate legislation) by exemption from quota, is 4 to 6 cents per pound of sugar used, and is somewhat more than 10 percent of the cost of the condensed milk.