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On August 22, 2016, U.S. Customs and Border Protection (CBP) published in the Federal Register interim regulations and a solicitation of comments [USCBP-2016-0053; CBP Dec. 16-11] regarding investigation of claims of evasion of antidumping and countervailing duties, in accordance with section 421 of the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA; Pub. L. 114-125, 130 Stat. 122, 155, Feb. 24, 2016). TFTEA contains Title IV-Prevention of Evasion of Antidumping and Countervailing Duty Orders (short title “Enforce and Protect Act of 2015” or EAPA) which establishes a formal process for CBP to investigate allegations of the evasion of AD/CVD orders and requires that regulations be prescribed as necessary and within 180 days. The CBP regulations create a new Part 165 to implement the EAPA provisions, and a new Trade Remedy Law Enforcement Directorate (TRLED) to conduct the investigations.

According to the CBP document,

Evasion refers to entering merchandise into the customs territory of the United States for consumption by an act or omission that is material and false, and which results in antidumping or countervailing duties being reduced or not applied to or collected on such merchandise.

Examples of evasion could include, but are not limited to, the misrepresentation of the merchandise’s true country of origin (e.g., through fraudulent country of origin markings on the product itself or false sales), false or incorrect shipping and entry documentation, or misreporting of the merchandise’s physical characteristics. CBP is responsible for ensuring that the appropriate duties are collected on imports of merchandise. U.S. Immigration and Customs Enforcement (ICE) is responsible for conducting criminal investigations of the evasion of AD/CVD orders.

Prior to enactment of EAPA, parties submitting allegations of evasion were not afforded an opportunity to participate in the investigation. In addition, CBP did not have an obligation to notify parties that submitted evasion allegations of the outcome of CBP’s review.

EAPA requires CBP to initiate an investigation within 15 business days of receipt of a properly filed allegation from an interested party or referral from another Federal agency that reasonably suggests that merchandise covered by an AD/CVD order has entered the customs territory of the United States (CTUS) through evasion and requires that CBP take certain actions with specified timeframes. EAPA requires CBP to determine, not later than 300 calendar days (or 360 calendar days in extraordinarily complicated cases) after the date of initiation of an EAPA investigation, whether there is substantial evidence that merchandise covered by an AD/CVD order was entered into the CTUS through evasion. EAPA further requires CBP, no later than five business days after making a determination, to communicate the determination to the interested party who made an allegation that initiated the evasion investigation.

Procedures, including questionnaires and interim measures are provided. EAPA provides a period of 30 business days after a determination for the interested party who made the allegation of evasion or the person determined to have entered the covered merchandise subject to the evasion determination to request a de novo administrative review. And not later than 60 business days after such a request for a review of an initial determination is properly filed, CBP must complete the review and issue a final administrative determination. Judicial review in the U.S. Court of International Trade (CIT) is also provided.

The interim regulations are effective immediately. Comments are due October 21, 2016.