Background

U.S. Customs and Border Protection further reduced import processing times in fiscal year 2020 even as it saw another increase in the amount of import duties it collected, according to the agency’s annual trade and travel report.

Automated Commercial Environment. In FY 2020 ACE reduced processing times by 775,000 hours for the trade community (up 12.3 percent) and 5.5 million hours for CBP (up 189 percent) and yielded an estimated economic benefit of $1.4 for the trade community (up 161 percent) and $358 million for CBP (up 233 percent). CBP primarily attributes these savings to the trade community’s expanded use of the Section 321 and entry type 86 processes.

CTPAT. The 11,300 certified members of the Customs Trade Partnership Against Terrorism (down 2.6 percent) accounted for 52 percent (by value) of cargo imported into the U.S. in FY 2020 (down from 54 percent). CBP completed more than 1,300 validations (down 41 percent) to certify that CTPAT members both implemented and followed the highest level of supply chain security measures, and CBP enforcement actions led to 135 suspensions (up 41 percent) and 155 removals (up 29.2 percent). On the other hand, CTPAT members saved $65.9 million from reduced examination rates (down 6.1 percent) and CBP saved almost $433,000 in travel expenses (down 27.8 percent) by accepting 433 authorized economic operator certificates from foreign partners (up 28.1 percent).

E-commerce. CBP saw a 28 percent increase in low-value (below $800) shipments, including a 219 percent increase in the air environment and a 123 percent increase in the truck environment. Express and international mail shipments accounted for 90 percent of IPR-related seizures.

CBP is conducting two tests aimed at improving its ability to identify and target high-risk e-commerce shipments. CBP received more than 40 million live data submissions from five participants in the Section 321 data pilot in FY 2020 and is evaluating test data from another four. CBP’s entry type 86 test saw more than 120 million transactions filed and more than $850 million in cost savings for CBP and the trade.

Forced Labor. CBP issued 13 new withhold release orders, detained more than 300 shipments containing nearly $50 million of goods believed to be made with forced labor, and issued its first civil penalty for such goods. CBP is currently enforcing 44 active withhold release orders (up 22.2 percent from FY 2019) and seven active findings (up 75 percent).

Inspections. CBP officers used more than 350 large-scale non-intrusive inspection systems at land and sea ports of entry in FY 2020 (up 9.4 percent) to perform approximately 6.4 million examinations (down 3.0 percent).

IPR. At the end of FY 2020 CBP was enforcing 18,757 active recorded copyrights and trademarks (up 0.1 percent from FY 2019) and had seized 26,503 shipments with intellectual property rights violations (down 4.0 percent). CBP attributes this decline to a drop in imports from China and fewer seizures of products with traditionally high retail prices.

CBP was also administering 127 active exclusion orders issued by the International Trade Commission and its enforcement of those orders had resulted in 137 actions such as exclusion and seizure of infringing goods.

Pandemic. CBP seized 12.7 million counterfeit face masks, more than 175,000 prohibited COVID-19 test kits, and other violative pandemic-related items. Of these seizures, 53 percent occurred in the express consignment environment and 51 percent originated in China. More than 2,600 importers participated in a short-term duty deferral program and a process automation “bot” that CBP deployed to the Automated Commercial Environment reduced the amount of manual work associated with the duty deferrals by about 50 percent.

Product Safety. Since the establishment of the Commercial Targeting and Analysis Center in 2010 more than 100,000 shipments of unsafe consumer and industrial goods, violative food and drug products, and other contraband have been prevented from entering U.S. commerce. In FY 2020 CTAC facilitated efforts that led to 9,382 seizures of products posing health and safety risks (up 30.1 percent), 346 seizures because of wildlife trafficking violations (down 41.8 percent), and 80 seizures of illicit importations of cultural property (up 264 percent).

Tariffs. In FY 2020 CBP processed $2.4 trillion in imports equating to 32.8 million entries and more than 28.5 million cargo containers (all lower than FY 2019). It collected $78.8 billion in duties, taxes, and other fees on those imports (down 1.6 percent), including $74.4 billion in duties (up 3.5 percent). More than half of these duties were from the Section 201 safeguard tariffs on washing machines, washing machine parts, and solar panels ($900 million, up 26.3 percent); Section 232 duties on steel ($1.3 billion, down 67.5 percent) and aluminum ($500 million, down 54.5 percent); and Section 301 tariffs on goods from China ($35.6 billion, up 22.8 percent).

Trade Remedies. At the end of FY 2020 CBP was enforcing 540 antidumping and/or countervailing duty orders (up 7.4 percent from FY 2019) and had collected about $1.8 billion in AD/CV cash deposits (down 5.3 percent). Entry summary reviews resulted in the recovery of $94.2 million in AD/CV duties owed (down 22.7 percent); monetary penalties for fraud, gross negligence, and negligence of AD/CV requirements totaled more than $31 million (down 61.5 percent); and audits identified more than $203 million in AD/CV discrepancies (up 895 percent), with $7.2 million (up 50 percent) collected to date. CBP and U.S. Immigration and Customs Enforcement seized shipments with a domestic value of more than $1.1 million for AD/CV violations.

CBP received 38 new allegations of AD/CV duty evasion under the Enforce and Protect Act (up 90 percent), initiated 64 EAPA investigations (up 78 percent), took interim measures in 43 investigations (up 38.7 percent), and issued final determinations for 30 investigations (up 329 percent). EAPA investigations covered a wide range of commodities, including garlic, diamond sawblades, aluminum extrusions, refrigerants, plywood, glycine, steel wire garment hangers, pencils, wooden bedroom furniture, oil country tubular goods, and stainless steel flanges.

Copyright © 2021 Sandler, Travis & Rosenberg, P.A.; WorldTrade Interactive, Inc. All rights reserved.

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