I thought you might be interested in the “AD/CVD Update” US Customs and Border Protection recently released on its website (click here for a copy).
The Update is brief, but contains a number of interesting facts from FY14, such as:
* Antidumping and countervailing duty (AD/CVD) deposits increased by 12% over the previous year to $508.5 million;
* CBP conducted 78 AD/CVD audits and identified underpayments/underdeposits of $24.6 million;
* CBP was only able to collect about one-third ($8.5 million) of that amount;
* CBP had created an AD/CVD Targeting and Analysis Group which is actively looking for AD/CVD evasion; and
* DOJ/CBP are currently pursuing 4 AD/CVD evasion/penalty actions at the US Court of International Trade.
Given the heat CBP has taken from Congress in recent years over its failure to collect AD/CVD owed, it is no surprise that CBP is active in this area (or that it is looking for a little good publicity). This Update suggests that CBP will likely increase its focus on this area in the near future. For example, audit results indicate that AD/CVD duties are being evaded, but CBP is able to collect only a small portion of those duties for some reason (e.g., insufficient bonds, importers that go out of business). As a result, we expect that focused AD/CVD inquiries will increase, as CBP continues to take steps to improve its ability to collect previously unpaid duties (As an aside, this is part of what we believe is driving CBP’s efforts to revise the Form 5106 – see 10/31/14 “Dear Friends” update).
If you import merchandise subject to AD/CVD, it is important that you have strong internal controls in place to help ensure that the proper duties are being deposited upon entry. Given how the US AD/CVD system works (e.g., the interaction between Commerce and CBP; the administrative review process, etc.), this is easier said than done. If you have any questions about how to stay up-to-date on new AD/CVD investigations, determining whether your products fall within scope, how to manage your broker on these issues, or related topics, please let us know.