Background

An advisory group is recommending that the U.S. consider changing from a retrospective to a prospective system for assessing antidumping and countervailing duties as part of an effort to modernize customs processes.

At the most recent quarterly meeting of the Customs Commercial Operations Advisory Committee, the COAC AD/CV working group said U.S. Customs and Border Protection’s ongoing initiative to develop and ultimately implement a 21st century customs framework should address several “pain points” in the AD/CV entry process. Primary among these is the retrospective system used by the U.S. (the only country in the world to do so) for determining final AD/CV duties.

The working group said that under this system final duties are unknown until each annual administrative review is complete, a process that can take three to five years. By the time entries liquidate, duty rates increase about 20 percent of the time, and importers may be unable to pay a large shift in duties after goods have already been sold. In addition, the working group said, bad actors use this long delay to develop shell companies to evade paying AD/CV duties altogether, a problem that has contributed to the loss of billions of dollars in uncollected duties in recent years.

The working group noted that COAC has made several recommendations for CBP to work with the Department of Commerce to consider a prospective system that would eliminate this lengthy investigation and liquidation process. Those recommendations, along with a 2008 report from the Government Accountability Office and a 2010 DOC study, “were conducted over 10 years ago before there were over 600 AD/CV cases that are also complicated by multiple trade remedies under Section 201, 232, and 301,” the working group said. The group therefore plans to revisit its prior recommendations.

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