Background

A number of U.S. Customs and Border Protection’s trade enforcement measures, including penalties, seizures, and cargo detentions, accelerated in the first half of fiscal year 2021. These trends highlight the need for importers to develop, implement, and monitor effective compliance programs.

According to statistics recently made available by CBP, the agency is on pace to exceed its FY 2020 numbers in a number of areas. For example, if current patterns hold, CBP would see increases of 18 percent in penalties issued and 12.3 percent in liquidated damages issued. Trade seizures would increase 50.2 percent and their value would climb 46.2 percent for intellectual property rights seizures and 100 percent for import safety seizures. The number of audits conducted has seen little change, but the amount of money collected as a result of audits could increase by nearly 200 percent. (Click here to register for ST&R’s upcoming webinar on customs audits.)

Of particular note is that detentions of cargo related to withhold release orders, which identify goods suspected of being made with forced labor, are on pace to jump more than 300 percent and the value of such detentions is on track to increase nearly 900 percent.

To evaluate importer compliance and identify problems CBP frequently uses risk analysis and survey assessments. RASAs can subject importers to detailed scrutiny and require significant documentation as evidentiary support. If they reveal perceived compliance risks, RASAs may result in full-blown audits and enforcement actions may follow. Click here to register for ST&R’s on-demand webinar on the RASA process, the primary risk areas currently being targeted for RASA consideration, and how importers can better prepare to undergo a RASA or audit.

 

FY 2019

FY 2020

FY 2021 H1

Completed audits

391

466

231

Collections from audits

$43.1 million

$44.6 million

$65.3 million

Trade penalties issued

2,108

2,309

1,366

Trade liquidated damages

21,093

19,612

11,002

Collections from penalties/LDs

$30.1 million

$20.1 million

$8.2 million

Trade seizures

62,509

73,708

55,373

IPR seizures

27,599

26,490

17,827

Value of IPR seizures

$1.5 billion

$1.3 billion

$1.9 billion

Import safety seizures

6,280

8,208

5,378

Value of import safety seizures

$12.0 million

$12.7 million

$12.7 million

EAPA investigations

31

64

29

Value/lost revenue identified in EAPA

$250 million

$287 million

$17 million

Withhold release orders

6

13

5

Cargo detentions related to WROs

12

324

674

Value of cargo detentions related to WROs

$1.2 million

$55.5 million

$275 million

 

* - numbers in italics represent anticipated decreases from FY 2020 to FY 2021 while numbers in bold represent anticipated increases

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

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