New Developments: Increase in CEE-Driven Enforcement Activities

Dear Friends,

Further to our initial post, we wanted to make sure you were aware of two developments from last week that will likely result in an increase in U.S. Customs and Border Protection (CBP) enforcement actions. 

The first was the publication of a report by the United States Government Accountability Office (GAO) critical of CBP’s handling of antidumping/countervailing duty (AD/CVD) orders.  The report, which is entitled, “Antidumping and Countervailing Duties:  CBP Action Needed to Reduce Duty Processing Errors and Mitigate Nonpayment Risk” concluded that CBP failed to collect approximately $2.3 billion in antidumping & countervailing duties between Oct. 1, 2001 and Sept. 30, 2014.  While this may not be entirely CBP’s fault (e.g., the retrospective nature of our trade remedies law), the GAO takes CBP to task for “miss[ing] opportunities to identify and mitigate nonpayment risk.”  Given the politics surrounding this issue (the report was delivered to the Senate Finance Committee), we can expect to see increased AD/CVD enforcement as CBP attempts to demonstrate its commitment to addressing this issue.

The second was the pre-publication by CBP of interim regulations entitled, “Investigation of Claims of Evasion of Antidumping and Countervailing Duties”.  These regulations were mandated by section 421 of the Trade Facilitation and Trade Enforcement Act of 2015, which was signed into law earlier this year.  The interim regulations, which will take effect on Monday, August 22, 2016, establish procedures for investigating claims of AD/CVD order evasion.  The procedures contain detailed timelines for initiating, conducting and completing investigations based on claims from private parties or other government agencies.  The process created by the interim regulations has numerous advantages over the e-allegation system (which will continue to exist) and we expect that it will be well-used by domestic producers, as well as companies who have reason to believe that competitors are not properly declaring merchandise subject to AD/CVD orders upon importation.

We hope this is helpful.  If you have any questions about the GAO report, or CBP’s interim regulations, please let us know.

Best regards,
Ted

 

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