Increase in CEE-Driven Enforcement Activities

Dear Friends,

We wanted to share with you some developments we are seeing with regard to U.S. Customs and Border Protection (CBP) enforcement activities.  Specifically, we are seeing an increased focus on antidumping/countervailing duty issues, and an increase in the number of “commercial fraud” investigations being initiated.  In both cases, the Centers of Excellence and Expertise (CEEs) are playing prominent roles.

We are seeing Import Specialists tied to various CEEs issue an increasing number of Requests for Information (CF-28s) focused specifically on antidumping/countervailing duty order compliance (e.g., whether an imported article should have been entered as a Type 03 entry subject to an order).  These CF-28s have most often involved the AD/CVD orders with broad, ambiguous scopes (e.g., orders on aluminum extrusions, steel products, various orders on pipe, etc.).  The same Import Specialists are issuing CF-28s to multiple importers, which (we believe) demonstrates that the CEEs are working as intended – as an Import Specialist learns that one importer may have an issue, he/she wonders whether other importers in the same industry also have that issue and starts issuing CF-28s to other companies covered by the CEE, etc.  Given the potential exposure for failing to deposit estimated AD/CVD upon importation, we recommend that all importers re-confirm that they are properly declaring any such imports.

On a related note, we are seeing an increasing number of formal investigations being initiated by CBP; again, driven primarily by the CEEs.  The number of formal “commercial fraud” investigations declined dramatically following the split of the U.S. Customs Service into CBP and U.S. Immigration and Customs Enforcement (ICE) in 2003.  Since most of the enforcement personnel went with ICE and began focusing on different issues, the number of commercial fraud investigations declined.  While there have been blips of activity since then (e.g., the issue several years ago of Import Specialists including investigation language in routine CF-28s), formal investigations were not very frequent.  That may now be changing.  In recent months, we have seen several CEE-based Import Specialists launch formal investigations into different matters (e.g., antidumping/countervailing duty issues, NAFTA and other preference claims, etc.).  Some, but not all, of these investigations were preceded by a CF-28.  As a result, it is important to pay close attention to any CF-28s you receive, and to recognize the investigation risk (and prior disclosure opportunity) they represent.

We hope this is helpful.  If you have any questions, please let us know.

Best regards,
Ted

 

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