GAO: CBP struggles with CDSOA claims

GAO: CBP struggles with CDSOA claims    A congressional watchdog agency report released Monday found Customs and Border Protection is struggling to process claims against the Continued Dumping and Subsidy Offset Act (CDSOA), also known as the Byrd Amendment.
   The act requires CBP to process company claims against CDSOA and make the payments to eligible companies.
   The Government Accountability Office (GAO) found CBP’s processes to be “labor intensive and do not include standardized forms of electronic filing.” The GAO also found that most companies are not accountable for the claims they file because they don’t have to support them and CBP does not verify them.
   The GAO report faulted CBP for problems with collecting duties to fund the CDSOA. “About half of the funds that should have been available for disbursement remained uncollected in fiscal year 2004,” the GAO report said.
   The GAO report noted that most of the fiscal 2004 CDSOA payments went to five companies: The Timken Co.; The Torrington Co.; Candle-lite; MPB Corp.; and Zenith Electronics Corp. The rest was distributed among 765 claimants. CBP issued more than $1 billion CDSOA-related payments in fiscal 2004.
   The GAO report said the benefits to recipient companies has been “mixed.” Some non-recipients complained to the GAO that the payments gave their competitors an unfair advantage in the market.
   In addition, the GAO report pointed out that the CDSOA is not yet in compliance with the World Trade Organization, and American shippers face additional tariffs on $134 million in exports to other countries. Recently Canada, the European Union, Mexico and Japan have imposed these increased duties. Four other WTO members may soon do the same.
   If Congress should continue to impose CDSOA, the GAO report recommended extending the timeframe for disbursing payments. The GAO also requests that CBP take additional steps to improve processing CDSOA claims and payments, in addition to timely claims verifications and sufficient collection of import duties.
   Opponents of the Byrd Amendment said the GAO report confirms the ease at which the program can be abused by certain American firms and industries.
   “The GAO report makes clear that the Byrd Amendment is an ineffective trade remedy that pays out millions of dollars on corporate subsidies to only a handful of petitioners,” said Sandy Kennedy, president of the Arlington, Va.-based Retail Industry Leaders Association, in a statement Monday.
   “This report highlights a total lack of accountability,” said Sen. Chuck Grassley, R-Iowa, in a statement. “When government provides an incentive to overstate claims and then fails to verify whether the claims made are accurate, it really amounts to an open invitation for fraud. Once a company gets the money, there’s no way to tell how it’s been spent.”