King & Spalding: Customs and Border Protection Issues Update of Enforcement Activities Related to Trade Orders

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U.S. Customs and Border Protection (CBP) issued its first "AD/CVD Update" in December 2014. The AD/CVD Update provides information regarding CBP's activities to collect antidumping (AD) and countervailing duties (CVD) from U.S. importers that attempt to evade their payment.

[Reposted from the King & Spalding blog  |  P. Lee Smith  |  January 6, 2015]

 CBP's AD/CVD Update is a result of a renewed focus on collecting duties that result from AD and CVD orders issued by the Commerce Department. CBP designated AD/CVD issues as one of its "Priority Trade Issues." According to CBP, Priority Trade Issues represent high-risk areas that can cause significant revenue loss, harm the U.S. economy, or threaten the health and safety of the American people. The goal of the AD/CVD Priority Trade Issue is to detect and deter circumvention of the AD/CVD law, to liquidate final duties timely and accurately, and to facilitate legitimate trade.

The AD/CVD Update is part of CBP's outreach efforts and a way to publicize CBP's progress on this Priority Trade Issue. According to the AD/CVD Update, CBP collected $508.5 million in AD/CVD cash deposits in fiscal year 2014, which was a 12 percent increase from fiscal year 2013. This increase in duty collection resulted from 78 audits of importers of AD/CVD commodities and CBP's targeting efforts. In particular, CBP collected $3.4 million in evaded AD/CVD duties on drawn stainless steel sinks from China, which was among the commodities targeted by CBP.

CBP also highlighted its industry outreach efforts. CBP noted that the annual CBP and Steel Industry Partnership meeting was held on October 21, 2014. The U.S. steel industry works in partnership with CBP to enforce U.S. trade laws by providing trade intelligence and training to CBP personnel at various ports annually. Steel products constitute the largest group of AD and CVD orders, over 42 percent of all orders. CBP, however, made clear that any company can provide trade intelligence regarding the evasion of duties. CBP provided a link to its e-Allegation website, which allows private parties to report trade violations.

Continuing its focus on AD/CVD evasion issues, CBP also issued an "AD/CVD Scam Alert." This Scam Alert provides an example of the type of scam advertisements that have become common in the market. The Scam Alert advises importers that "knowingly engaging in activities designed to evade the payment of antidumping or countervailing duties is a federal crime. Violations involving duty evasion may result in civil and criminal penalties."

The AD/CVD Update and Scam Alert demonstrate that CBP is focused on stopping AD/CVD duty evasion and that CBP seeks the assistance of the relevant industry stakeholders in curbing the ongoing evasion of duties on AD/CVD products.

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