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Uncollected AD/CV Duties Fall Again but Business Group Still Urges Prospective System

Friday, December 09, 2011
Sandler, Travis & Rosenberg Trade Report

A report posted recently to the U.S. Customs and Border Protection Web site indicates that the amount of antidumping and countervailing duties that went uncollected by CBP fell for the second straight year in fiscal year 2011. This problem has been one of the reasons for considering whether to change the U.S. AD/CV duty collection system from retrospective to prospective, and this week one business group recommended that step be taken.

According to CBP, uncollected AD/CV duties fell 31% in FY 2011, from $150.6 million to $103.9 million, a year after a nearly 50% drop from $294.7 million. China accounted for 95.9% of the total ($99.6 million, down from $138.3 million in FY 2010), with wooden bedroom furniture from China alone accounting for 79.6% of the total. There was also a significant shortfall for crawfish tail meat from China ($15.5 million, up from $4.8 million), but uncollected duties on fresh garlic ($388,625, down from $30.6 million), preserved mushrooms ($364,218, down from $19.2 million) and honey (zero, compared to $19.8 million) improved significantly. Other products for which CBP had trouble collecting AD/CV duties in FY 2011 included welded carbon steel pipe and tube from Thailand ($1.26 million) and frozen fish fillets from Vietnam ($1.16 million).

The problem of uncollected AD/CV duties is one that both CBP and the Department of Commerce have been focusing on for several years. One potential solution that has been considered by both the government and the private sector is switching from a retrospective AD/CV duty assessment system to a prospective system. In December 2010 DOC issued a report examining the benefits and drawbacks of the two systems.

At a Dec. 7 meeting of the Advisory Committee on Commercial Operations of U.S. Customs and Border Protection (COAC), the COAC Subcommittee on Antidumping and Countervailing Duties said that after reviewing these issues it is formally recommending that CBP, DOC and the Treasury Department, in consultation with Congress, jointly design a prospective AD/CV duty collection system. “Given the amount of analysis and comments that already exist on this topic,” the subcommittee said, “we do not think it is an unreasonable goal to establish a framework available for both public comment and to serve as a base for legislative activity within the next twelve months.”

In the meantime CBP has created a Re-Engineering Dumping (RED) Team charged with studying the import process for entries subject to AD/CV duties to identify where and what the threats, challenges and vulnerabilities are in each step of the process. The team is particularly looking at transshipment, under collections and the role of shell companies.

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