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Trade Enforcement Efforts Expected to Increase in Wake of Presidential Directive

Wednesday, April 05, 2017
Sandler, Travis & Rosenberg Trade Report

President Trump has issued an executive order directing federal authorities to step up the collection of antidumping and countervailing duties and the prosecution of trade and customs law violations. Importers should act quickly to review their processes, practices, and entry data to identify potential trade compliance risks. Reporting and correcting any violations that may be discovered could mitigate negative consequences.

AD/CV Duties. In August 2016 the Government Accountability Office reported that $2.3 billion in AD and CV duties went uncollected over the previous 15 years, that 20 importers accounted for about half that amount, and that about 95 percent of the total was associated with importers of goods from China. The GAO said that U.S. Customs and Border Protection was taking steps to improve AD/CV duty collections, such as revising bonding formulas and centralizing the management of bonds, but lacked key information that could aid those efforts. The report also noted the challenge posed by the United States’ complex and retrospective AD/CV duty collection system.

The new EO focuses on strengthening bonding requirements for importers of goods subject to AD or CV duties for which CBP has no record of previous imports or has a record of the importer’s failure to pay AD/CV duties in full or on time. If a CBP risk assessment identifies any such importer as posing a risk to U.S. revenue, that importer would have to provide security for AD/CV duty liability through bonds and other legal measures.

House Ways and Means Committee Chair Kevin Brady, R-Texas, said this provision “operationalizes new tools Congress put in place in the customs enforcement bill” enacted in 2016. Nicole Bivens Collinson, president, international trade and government relations, for Sandler, Travis & Rosenberg, said CBP has already reached out to trade groups to discuss how to meet the new requirement.

Trade and Customs Law Violations. The EO directs the Department of Homeland Security, through CBP, to develop and implement a strategy and plan for combating violations of U.S. trade and customs laws for goods and for enabling interdiction and disposal of inadmissible merchandise entering through any mode of transportation, including through methods other than seizure.

Further, the EO enhances CBP’s authorization to share with intellectual property rights holders any information (1) necessary to determine whether there has been an IPR infringement or violation or (2) regarding goods voluntarily abandoned prior to seizure whose importation would have violated U.S. trade laws.

Finally, the EO directs the Justice Department to work with DHS to develop recommended prosecution practices and allocate appropriate resources to ensure that federal prosecutors accord a high priority to (apparently criminal) prosecution of significant offenses related to trade law violations.

For more information on these directives and how your company should respond, please contact Larry Ordet at (305) 894-1003.

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