As part of a package headlined by the Hatch-Wyden-Ryan bill to restore trade promotion authority, the Senate Finance Committee held an April 22, 2015 mark-up of an original customs and enforcement bill containing the Enforcing Orders and Reducing Customs Evasion (ENFORCE) Act. The ENFORCE Act creates procedures for a federal agency or interested party to make good faith allegations of a company’s evasion of antidumping (AD) and countervailing duty (CVD) orders to U.S. Customs and Border Protection (CBP). The House Ways and Means Committee marked up a House version of ENFORCE (called PROTECT) on April 23, 2015.

The Act could be a significant new source of risk for importers, allowing a competitor to make allegations of duty evasion that must be investigated by CBP.

The ENFORCE Act

The Senate Finance bill contains the ENFORCE Act relating to AD/CVD evasion allegations in Title V. Now-Finance Committee Ranking Member Ron Wyden (D-Ore.) and Senator Susan Collins (R-Me.) previously introduced the ENFORCE Act in 2011, where it eventually passed the Senate Finance Committee by voice vote but never called for a vote on the Senate floor.

The bill amends the Tariff Act of 1930 to provide procedures for CBP to investigate allegations of antidumping and countervailing duty order evasion, as follows:

  • Competitors and agencies may bring claims: The ENFORCE Act allows CBP to accept allegations from interested parties. “Interested party” includes U.S. producers, manufacturers, or wholesalers of merchandise that is like or most similar to covered merchandise allegedly entering the United States through evasion. Other federal agencies (e.g., the U.S. Department of Commerce) may also submit referrals to CBP.
  • Investigation timeframe: Upon receipt of a proper allegation, CBP must initiate an investigation within ten business days. CBP must then make a determination within nine months whether substantial evidence exists that merchandise has entered the United States through evasion. The interested party then has 30 business days to request de novo review of the determination by CBP. Determinations of evasion are subject to judicial review after administrative review of the determination.
  • Information requests: The bill authorizes the Commissioner to request information from several parties, including the interested party making the allegation, the importer, the foreign producer, the foreign exporter, and the government of the foreign country from which the merchandise was exported. If the importer, exporter, foreign producer, or U.S. producer making the allegation fail to provide information to the best of their abilities, the Commissioner may make an adverse inference in reaching its evasion determination.
  • Determination: If CBP finds within 90 days that reasonable suspicion exists that covered merchandise entered the United States by means of evasion, the Commissioner must take enforcement steps. CBP has nine months after initiating an investigation to make an evasion determination.
  • Penalties: If CBP finds that reasonable suspicion exists that covered merchandise entered the United States by means of evasion, CBP must:
    • suspend the liquidation of any unliquidated entries of covered merchandise entered after the initiation of the investigation,
    • extend the period for liquidating any unliquidated entries of covered merchandise entered before the initiation of the investigation, and
    • take additional measures to collect duties, such as requiring a bond or posting cash deposits for covered merchandise.

In addition, if CBP ultimately makes an evasion determination, the Commissioner must notify the Commerce Department for a determination of appropriate duty rates and take additional enforcement measures, such as requiring a deposit on future entries or referring the matter to ICE for civil or criminal investigation.

The PROTECT Act

The House marked up its own customs and enforcement bill, H.R. 1907, in the House Ways and Means Committee on April 23, 2015. The House bill contains the Preventing Recurring Trade Evasion and Circumvention (PROTECT) Act instead of the ENFORCE Act. Representative Charles Boustany (R-La.) and Representative Cedric Richmond (D-La.) previously introduced the PROTECT Act in 2012. 

The PROTECT Act is similar to the ENFORCE Act in significant ways. Both bills allow interested parties to make evasion allegations. Both bills require the investigating authority to make a preliminary determination within 90 days, but the PROTECT Act provides a slightly longer period—300 days instead of 270 days—to make a final evasion determination.

But the bills also contain differences. Notably, the House bill transfers authority to investigate individual allegations to the Commerce Department, not CBP. Moreover, the PROTECT Act creates a new Trade Remedy Law Enforcement Division within CBP’s Office of International Trade to coordinate interagency investigation and enforcement efforts. 

H.R. 1907 is sponsored by Ways and Means Trade Subcommittee Chairman Pat Tiberi (R-Ohio), who has said that, should both the ENFORCE Act and the PROTECT Act pass, the differences would need to be resolved in conference committee.

Timothy J. Ford