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# Fraud in Drawback System

# Fraud in Drawback System

## Definition

The illegal practices and abuses that occurred within the drawback system, particularly concerning tobacco exports, where goods were falsely claimed for export or re-imported clandestinely to obtain duty refunds fraudulently. These fraudulent activities harmed both government revenue and legitimate traders who competed fairly within the system.

## Source Chapter

Book IV, Chapter 4

## Context

The chapter acknowledges that despite the theoretical advantages of drawbacks, the system was vulnerable to abuse and fraud. This recognition highlights the practical challenges of implementing complex trade policies and the need for effective enforcement mechanisms to prevent the exploitation of regulatory systems designed to promote legitimate commerce.

## Economic Domain

Regulation

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