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Supplemental Bonds, Other Measures Under Consideration to Aid AD/CV Duty Collections

Wednesday, November 29, 2017
Sandler, Travis & Rosenberg Trade Report

U.S. Customs and Border Protection is considering a number of options for further action to ensure the collection of antidumping and countervailing duties on imported goods. Earlier this year President Trump issued an executive order directing federal authorities to step up AD/CV duty collections, which an August 2016 Government Accountability Report said had fallen $2.3 billion short over the previous 15 years.

Using authority provided under the Trade Facilitation and Trade Enforcement Act to adjust bonds based on risk, CBP is discussing the concept of a supplemental AD/CV bond with a working group in the Commercial Customs Operations Advisory Committee’s Trade Enforcement and Revenue Subcommittee. These discussions will serve as the basis of a pilot initiative that will test the outputs of statistical risk models currently under development. Based on the lessons learned from that pilot, CBP will work toward its ultimate goal of more accurately assessing bond amounts based on a statistically valid analysis.

At a recent meeting, COAC endorsed the idea of a supplemental AD/CV bond, which it said should be available as a single transaction or continuous bond, have a separate activity code, and be required to secure the potential shift in AD/CV duty rates for active orders (of which there are currently about 420). COAC plans to provide CBP with a white paper that offers recommendations on how this supplemental bond would be calculated and automated in the Automated Commercial Environment.

COAC also recommended that CBP require live entries for AD/CV shipments for (a) importers with a previous unresolved instance of AD/CV duty nonpayment at the time of entry summary and (b) importers who do not pay an increased duty bill within 60 days of issuance (unless there is a valid protest issue that can be filed within 180 days of issuance). COAC said CBP should also establish and publicize a policy for removing an importer from live entry once it has rectified any payment problems and/or demonstrates that it was not at fault for any late file or payment (i.e., due to a technical or processing error).

Finally, COAC recommended that CBP provide additional data and information to sureties. To support more robust underwriting of AD/CV bonds, COAC recommended that CBP (a) expand Automated Surety Interface data to include entry summary line item detail and AD/CV 10-digit case numbers, (b) provide visibility to flagging the AD reimbursement statement in ACE or immediate notification if this statement is not filed with the entry summary, and (c) improve the functionality and information available in the ACE surety portal.

To help manage the potential risk of importer default, COAC said CBP should notify sureties of (a) importers placed on sanction by CBP and when they are put on live entry, (b) importers who immediately default on payment of periodic monthly statements, (c) debit vouchers (in real time), (d) the issuance of CBP forms 29 (Notice of Action) and 4647 (Notice to Redeliver Merchandise), and (e) prior disclosures related to non-payment of AD/CV duties. COAC also urged CBP to provide sureties with the ability to add and maintain current names and addresses of importers, which are often verified through the underwriting process.

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