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CBP Procedures for Investigating AD/CV Duty Evasion Get Longer Comment Period

Friday, October 21, 2016
Sandler, Travis & Rosenberg Trade Report

U.S. Customs and Border Protection has extended from Oct. 21 to Dec. 20 the deadline for comments on an interim rule setting forth the procedures CBP will use to investigate claims of evasion of antidumping and countervailing duty orders. This rule was effective as of Aug. 22 and CBP is moving quickly to implement it as part of a broader focus on improving trade enforcement efforts.

Evasion refers to entering goods into the U.S. customs territory for consumption by an act or omission that is material and false and results in AD or CV duties being reduced or not applied to or collected on such goods. Examples of evasion include misrepresentation of the goods’ true country of origin (e.g., through fraudulent country of origin markings on the product itself or false sales), false or incorrect shipping and entry documentation, and misreporting of the goods’ physical characteristics.

The Enforce and Protect Act created a new framework for CBP to investigate AD/CV duty evasion allegations and the interim rule sets out the formal process CBP will use to act on its new authority. The rule allows any interested party, including competing importers and federal agencies, to submit allegations and sets a fairly low bar for CBP to launch an investigation. CBP has broad authority to conduct these investigations and can impose initial remedial measures that could interrupt a supply chain in as little as 90 days. Any final determination of evasion may be met with not only AD/CV duties but also other enforcement measures such as civil or criminal investigations.

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