Watch Out – CBP Is Coming After Importers for Duties and Compliance Will be Key

U.S. importers should reevaluate their compliance program as U.S. Customs and Border Protection (CBP)’s steps up its efforts to enforce payment of antidumping and countervailing duties. The efforts come at the heel of this February’s passage of the Trade Facilitation and Enforcement Act, which gave CBP new investigatory authority over claims that certain importers are not paying duties. A new interim final rule is expected by Aug. 22. Importers of steel and other goods from China should be especially cautious.

Under the new provisions, CBP has the power to open investigations when information available to it “reasonably suggests” that an importer is not paying duties.  In testimony before the Senate Finance Committee a few weeks ago, CBP Commissioner Gil Kerlikowske described the new effort as “aggressive and assertive,” and highlighted the creation of the Trade Enforcement Task Force, which he described as “essentially a SWAT team within Customs and Border Protection to look for these violations.”

CBP will have authority to look into tips provided to it from “interested parties” through its already existing E-Allegations program. Interested parties include, among others, domestic manufacturers, unions, and trade or business associations. If CBP finds reasonable suspicion that an importer has evaded antidumping or countervailing duties, it is required to impose interim measures,  likely suspending liquidation of  the imports. CBP will have a timeline to make a final determination.

Since CBP will have authority to issue questionnaires, conduct verifications, and make adverse inferences against importers for their failure to cooperate, importers should strengthen their compliance programs so that they can effectively respond.  Businesses should review  existing or implement new import compliance programs to ensure they have a system in place to determine that imported products are not subject to potential dumping or CVD duties.