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Q&A: Establishing Enhanced Collection and Enforcement of Antidumping and Countervailing Duties and Violations of Trade and Customs Laws

Release Date: 
March 31, 2017

Enforcement for Trade and Suspected Customs Law Violations

Q1.  What is Voluntary Abandonment/Methods other than Seizure?

A1.  When a suspected intellectual property rights violation has been detected, there are various options available to the importers of record (IORs).  The IOR is an entity or individual, who is responsible for ensuring that legal goods are imported in accordance with the law.  One option is for the IOR to voluntarily abandon the goods, as defined in section 127.12 of title 19, Code of Federal Regulations, prior to seizure, rather than having the goods proceed through the formal seizure process.  Once an IOR has elected to abandon its goods, the goods may be destroyed.    

Q2.  How do I know there is a suspected violation with my goods?

A2.  CBP will send a detention notice to the IOR, or in the express environment, the carrier sends the notice to the consignee, to notify the IOR of the suspected violation.  The detention notice provides three options: 1) offer documentation evidencing authenticity; 2) consent to voluntarily abandon; or 3) provide no response, at which point CBP proceeds with the voluntary abandonment process.

Q3.  What information can CBP share with rights holders because of the new Executive Order?

A3.  The order highlights CBP’s ability to amend regulations to effectuate the sharing of information.  Regulatory amendments that expand the disclosure of information will enable CBP to share with rights holders information pertinent to the imported goods that have been voluntarily abandoned.

Antidumping and Countervailing Duties

Q1. What are antidumping and countervailing duties?

A1.  Antidumping and countervailing duties (AD/CVD) are additional duties determined by the U.S. Department of Commerce (Commerce) which offset unfair low prices and foreign government subsidies on certain imported goods.  AD/CVD duties level the playing field and provide fair competition for U.S. industry.

CBP carries out Commerce’s instructions to collect AD/CVD on specified imported products.

Q2. How much AD/CVD does CBP collect on imported goods?

A2. In Fiscal Year (FY) 2016, $14 billion of imported goods were subject to AD/CVD, and CBP collected $1.5 billion in AD/CVD cash deposits. CBP’s collection of AD/CVD cash deposits increased over 25 percent since FY 2015 and by almost 200 percent since FY 2014. As of the end of FY 2016, $2.8 billion of AD/CVD duties were owed to the U.S. government for imports going back to 2001.

Q3. What type of products are subject to AD/CVD?

A3. There are 376 AD/CVD Orders covering steel, agricultural, chemical, consumer, machinery, and other manufactured goods imported from 40 trading partners. AD/CVD Orders predominantly cover goods imported from China (141 AD/CVD Orders in total) and/or steel mill and pipe products (140 AD/CVD Orders).

Q4. How much AD/CVD duties are owed to the U.S. government?

A4. As of the end of FY 2016, $2.8 billion of AD/CVD duties were owed to the U.S. government for imports going back to 2001.

Q5. What is CBP doing to collect AD/CVD?

A5.  CBP actively pursues collection of AD/CVD duties from importers and sureties (companies which underwrite bonds on all imported goods).  CBP uses all of its legal authority, in coordination with the U.S. Department of Justice, to collect AD/CVD duties from importers and sureties.  CBP is currently pursuing and defending the collection of over $400 million of AD/CVD in the courts.  CBP takes all actions available to collect the revenue that is owed. 

Q6. Why is it so difficult to collect AD/CVD duties?

A6. CBP collects estimated cash deposits of AD/CVD duties upon importation of the goods. Commerce determines the final AD/CVD duties on these same imports at a later date (two to three years later on average), and instructs CBP to collect the final AD/CVD duties. 

CBP actively works to collect all AD/CVD due to the U.S. government.  By the time Commerce determines the final AD/CVD duties and CBP issues bills for these duties, some importers are unwilling or unable to pay increases in final AD/CVD duties.  For example, some importers are no longer in business or do not have any viable assets when CBP issues bills and attempts to collect final AD/CVD duties.

Bonds

Q1. What is a bond?

A1.  All parties that import merchandise into the United States for commercial purposes or transport imported merchandise through the United States must have a CBP bond.  A CBP bond is a contract that is given to CBP to insure the performance of an obligation or obligations imposed by law or regulation.  A bond is like an insurance policy that guarantees payment to CBP if a required act is not performed (such as where duties are not paid to CBP). 

Q2. How are bond amounts determined?

A2. The two basic types of bonds are discussed below:

Continuous Transaction Bond

Most importers have continuous bonds, which generally cover all imports for each importer for a year.  All Continuous Transaction Bond amounts are set by CBP’s Revenue Division in Indianapolis, Indiana.  Please see the Monetary Guidelines For Setting Bond Amounts on the CBP website at https://www.cbp.gov/document/directives/3510-004-monetary-guidelines-set....

The current minimum bond amount for continuous bonds is generally $50,000.  For importers, the minimum continuous bond amount is $50,000 or 10 percent of the total taxes and fees paid in the previous 12-month period, whichever is greater. 

Single Transaction Bond

Single Entry Bond amounts, which cover a single transaction (such as an importation), are set by the port director who accepts the bond. A bond is required when the value of the shipment is greater than $2,500 (formal entry) but may be requested by CBP on other occasions as deemed necessary.  The bond amount for a single entry bond generally is not less than the total entered value plus all duties, taxes, and fees.  If merchandise is subject to other federal agency requirements or is restricted merchandise, the bond amount set is not less than three times the total entered value of the merchandise.

Q3. Why aren’t bonds always sufficient to cover final AD/CVD?

A3. It is impossible to predict what the final AD/CVD liability for entries will be when Commerce issues final liquidation instructions.  This leads to instances where importers are unable or unwilling to pay CBP for merchandise that was imported several years previously and also leaves CBP without adequate bond coverage to cover the increased duties.  For example, when the estimated cash deposit rate of antidumping duties is 22 percent and the final antidumping duty rate is 212 percent, CBP usually would not have enough bond coverage to cover this significant increase.  CBP is in the process of developing an implementation plan to provide increased security through bonding for final AD/CVD duties.

Last Published Date: March 31, 2017
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