GAO: Uncollected antidumping, countervailing duties reach $2.3b

The Government Accountability Office said U.S. Customs has not been able to collect the duties because it lacks the analytic capability and the system provides loopholes for cheaters.

   U.S. Customs and Border Protection (CBP) has failed to collect about $2.3 billion in antidumping and countervailing duties over a 15-year period and needs a better system to track duty non-payment, according to the Government Accountability Office (GAO).

   The watchdog agency said that half of the unpaid bills were concentrated among 20 importers that stopped shipping to the United States before receiving their first duty bill.
   Importers are required to post bonds as insurance to cover non-payment, but the U.S. assessment of trade violations is retrospective, which means that final dumping or countervailing duty amounts can significantly exceed the initial amount paid at the estimated duty rate at time of entry, by which time unscrupulous overseas companies can shut down and reinvent themselves as a different entity.
   CBP has had limited success cutting down on processing errors that close duty bills at the initial rate rather than the final rate and it lacks a good system for identifying up front which importers might be at high risk of duty evasion, according to the GAO report on improving duty collection rates.

   GAO recommended that CBP issue guidance to collect and analyze data on a regular basis to find and address the causes of AD/CV duty liquidation errors and track progress; regularly conduct a comprehensive risk analysis that considers the likelihood as well as the significance of risk factors related to duty nonpayment; and take steps to use its data and risk assessment strategically to mitigate AD/CV duty nonpayment consistent with U.S. law and international trade obligations.
   GAO said CBP concurred with all three recommendations.
   The AD/CV shortfall was one of the factors behind Congress granting Customs more power to enforce trade laws and collect revenue in authorization legislation passed late last year.