New tools help U.S. Customs enforce trade law allegations from private parties
On the first anniversary of the Trade Facilitation and Trade Enforcement Act (TFTEA) of 2015 entering into force, U.S. Customs and Border Protection has used the new authorities provided under the law to significantly tighten enforcement of trade laws, Acting Commissioner Kevin McAleenan said Thursday.
President Donald Trump and lawmakers on Capitol Hill say the United States needs to do a better of job of confronting unfair trade practices and TFTEA is already giving authorities the ability to do that.
In opening remarks before the quarterly meeting of the Commercial Operations Advisory Committee, McAleenan said that progress has specifically been made leveling the playing field for U.S. companies by implementing the Enforce and Protect Act (EAPA) within the comprehensive Customs reauthorization legislation. Last October, CBP launched its first EAPA investigation focused on the transshipment of certain wire hangers from China being routed through Thailand to disguise the country of origin and allegedly evade an anti-dumping duty order.
A final determination is expected later this year, he said.
EAPA essentially forced Customs to take more seriously complaints of violations from private parties and follow up on them. Under EAPA, CBP was required to establish formal procedures for submitting and investigating antidumping or countervailing allegations of evasions against U.S. importers. It must track and report allegations all the way from initial receipt of a complaint to final disposition of an investigation.
The U.S. Department of Commerce determines whether an import is selling at below fair market value or has benefitted from government subsidies in the country of origin.
The U.S. International Trade Commission is responsible for determining whether an imported product has materially harmed a domestic manufacturer through unfair pricing. When Commerce issues an anti-dumping (AD) and/or countervailing duty (CVD) order it establishes a cash deposit rate for the additional duties on entries of imported merchandise subject to the order.
EAPA essentially forced Customs to take more seriously complaints of violations from private parties and follow up on them.
CBP is responsible for collecting those cash deposits or final duties in cases where someone requests an administrative review. Unscrupulous importers may try to misrepresent the merchandise’s true country of origin through fraudulent country of origin markings on the product itself or false sales, false or incorrect shipping and entry documents, or misreporting the merchandise’s physical characteristics.
Allegations submitted by private parties prior to EAPA did not afford them the opportunity to participate in the investigation and CBP was not obliged to notify complainants about the outcome of the review. Under the new rules, CBP must:
• Initiate an investigation within 15 business days of receipt of a properly filed allegation from an interested party or referral from another government agency.
• Make a determination within 300 days, in most cases.
• And provide notice of the determination within five days to the party who made the allegation.
When CBP determines evasion has taken place, it will suspend computation of final duty amounts for entries of covered merchandise that have not been processed and request the Commerce Department to determine an appropriate duty rate that importers must post cash deposits for to receive their goods. In some instances, it may go back and bill the importer for earlier entries that have been recalculated, and refer the matter to Immigration and Customs Enforcement (ICE) for possible civil or criminal investigation.
Companies can now file allegations of duty evasion electronically through CBP’s e-allegations web portal.
CBP will host an EAPA workshop March 14 to help companies on both ends of such allegations.
To ensure that appropriate duties can be collected while the EAPA investigation is underway, CBP will determine within 90 days whether there is reasonable suspicion that the merchandise was entered into U.S. commerce through evasion and, if so, suspend further processing of the merchandise and take other measures.
In fiscal year 2016 ending Sept. 30, CBP enforced 364 AD/CVD orders covering about 150 products. During that period, $13.9 billion of imported goods were subject to AD/CVD and CBP collected $1.5 billion in AD/CVD deposits, according to CBP figures.
TFTEA also gave CBP more authority to go after violations of intellectual property rights laws. Counterfeit goods steal sales from domestic rights holders and cheat consumers who are paying for a product they often believe is a genuine article. Last year, CBP and ICE seized more than 31,000 shipments containing fake goods – a 9 percent increase from fiscal year 2015.
The law also gave CBP more tools to stop the importation of goods made by forced labor, including child labor. So far, CBP has issued orders blocking entry of soda ash, calcium chloride, potassium products, Stevia and its derivatives, and peeled garlic from China.
A new Trade Enforcement Task Force works with partner government agencies on duty evasion and interdicting imported products using forced labor.
Trade Facilitation. TFTEA also extended funding to complete the development and implementation of the Automated Commercial Environment (ACE) and the International Trade Data System (ITDS).
ACE is the enterprise system used to electronically exchange import and export data and communicate with the trade community on trade compliance. It also is the government’s new dedicated conduit – or single window – through which the trade community files data one time for automatic distribution to other agencies, which then determine admissibility of international shipments.
CBP has completed six of seven primary software deployments and transitioned core trade processing functions from its legacy system to ACE. Today, all import manifests, cargo release reporting and export processing is done in ACE. The last piece of ACE to be rolled out has to do with post-release capabilities. Eighty-five percent of post-release functions, including certain electronic entry summaries and capability to protest Customs rulings, are now available.
The entry summary typically follows approval for shipments to be retrieved from the port and includes additional commodity data for duty, statistical and compliance purposes.
CBP postponed the Jan. 14 deployment of post-release capabilities because industry stakeholders said they needed more time to line up their systems with ACE and because the integration testing is so complex. Functions that can’t fully be executed in ACE yet include liquidations (the final tally of duties owed for a particular entry), drawback (duty recovery for re-exports), reconciliation (updating entry with more updated information), duty deferrals, collections, payment statements and the automated surety interface.
“We’re going to publish the rescheduled deployment date in the Federal Register at least 30 days in advance of the actual deployment and mandatory transition, but we’re going to make sure we’re ready before we do that,” McAleenan said. “At the same time, while we work to complete the final deployment of core processing capabilities in ACE, we continue to prioritize post-core development initiatives. These include truck refactoring, drawback simplification, and Court of International Trade requirements. We’ll determine further post-core priorities through collaboration with CBP stakeholders, our partner government agencies and, of course, COAC and members of the trade community.”
The Fish & Wildlife Service has been slow to meet the federal deadline for paperless processing of imports via ACE/ITDS. Timothy Skud, a Treasury department official, said officials hope to be able to offer ACE filing connectivity within the next month or two.