On December 8, 2014, US Customs and Border Protection (CBP) released an antidumping (AD) and countervailing duty (CVD) update on its AD/CVD enforcement efforts in Fiscal Year 2014. The AD/CVD Update provides several illustrations of CBP’s multilayered enforcement efforts, which include targeted scrutiny at the time of importation, post-importation importer audits and civil/criminal penalty investigations. AD/CVD enforcement remains one of only five Priority Trade Issues (PTI) that CBP acknowledges drive its allocation of resources. As such, AD/CVD compliance should also be a priority for the trade community.

The AD/CVD Update highlights targeting and pre-release efforts that seek to address evasion concerns at or near the time of importation. For example, the AD/CVD National Targeting and Analysis Group (based in Miami, Florida) has identified US$3.5 million in unpaid AD/CVD duties through targeted analysis of entry summaries for just one product. One approach being taken by CBP to protect against underpayment of AD/CVD duties is that if CBP suspects underpayment, they will require additional security. If they suspect underpayment at the border, i.e., before goods are released from CBP's control, “CBP requests single transaction bonds as additional security … when it has reasonable suspicions that imports may be subject to additional AD/CVD duties.” At least three cases have been brought in the US Court of International Trade in the past few months challenging such CBP “requests,” which impose substantial additional costs on importers because the surety companies issuing the bonds routinely require collateral equal to the amount of the additional bond.

CBP also highlights its use of post-importation audits to identify AD/CVD discrepancies. CBP reported conducting 78 audits that identified discrepancies of US$14.5 million in AD/CVD duties. The audits led to another US$10.1 million in duties paid as part of voluntary prior disclosures, civil monetary penalties and interest.

Further, in the past two months, the United States has brought at least four court cases alleging antidumping duty evasion at the US Court of International Trade. These cases seek to collect lost duties as well as penalties.

The United States also continues to pursue criminal charges for AD/CVD enforcement. For example, five defendants currently await sentencing after pleading guilty to conspiracy to smuggle with intent to evade AD/CVD duties on aluminum extrusions. United States v. Garcia-Adarme, et al., Criminal No. 13-353 (D.P.R.); see CBP press release here.

AD/CVD enforcement efforts will likely continue as CBP seeks to minimize revenue loss and address concerns raised by the trade community about AD/CVD evasion.

The AD/CVD enforcement efforts identified in the Update and discussed above reinforce the value of importers reviewing their import compliance and global supply chain to reduce the risk of potential violations of the complex rules surrounding AD/CVD duties.

The full Update is available on the CBP website here.