Earlier this month, U.S. Customs and Border Protection (“CBP”) announced the establishment of a Trade Enforcement Task Force within its Office of Trade. According to the CBP, the Task Force is designed to “further protect the American economy and domestic industry” through its focus on enforcement of antidumping (“AD”) and countervailing duty (“CVD”) laws, protection of intellectual property rights, and interdiction of imports made with forced labor.
CBP’s new Task Force was born as a result of the Trade Facilitation and Trade Enforcement Act of 2015 (the “Trade Enforcement Act”), which became law in February of this year. The Trade Enforcement Act includes several provisions that elevate AD and CVD enforcement by, for example, requiring that CBP investigate allegations of AD or CVD order evasion within strict deadlines, and developing and acting on duty evasion risk assessments regarding cargo destined for the United States. The Trade Enforcement Act provides for improved enforcement of IP rights through seizure authority, more comprehensive information-sharing, and dedication of resources. It also eliminates the “consumptive demand exception” to the general prohibition on the importation of goods produced by force labor and requires an annual report of detention actions taken under the forced labor provision (Section 307 of the Tariff Act of 1930). In fact, CBP has already stepped up enforcement of the prohibition since enactment of the Trade Enforcement Act, issuing two new “withhold release” orders (found here and here) on products imported from China – the first detention orders under Section 307 since 2000.
The Trade Enforcement Act extends beyond these key trade enforcement issues as well, covering import health and safety, small business trade issues, currency policies, and preclearance operations, among others. It further requires significant institutional action, including the development of a trade enforcement joint strategic plan for CBP and U.S. Immigration and Customs Enforcement (“ICE”); the implementation of educational seminars for CBP and ICE personnel; and the establishment of a number of interagency groups such as the Commercial Customs Operations Advisory Committee, the Import Safety Working Group, the National Intellectual Property Rights Coordination Center (within ICE), and the Interagency Center on Trade Implementation, Monitoring, and Enforcement (within the Office of the U.S. Trade Representative).
CBP’s Task Force is one step – and not the first – in tackling a broad range of ongoing enforcement challenges (many of which the Trade Enforcement Act attempted to address). For example, last year, CBP created an AD/CVD collections team within its Office of Administration to improve technical expertise and duty collections processes. It also recently initiated “live entry” procedures to slow processing of imports without complete or accurate paperwork. CBP has started documenting this work and resulting success stories in a quarterly enforcement bulletin.
CBP is particularly aware of the high risk of AD and CVD duty evasion in the steel and metals industries, with 270 AD and CVD orders on steel, alloy, and other metal products, and at least another 40 orders in the works. In an example of the CBP’s attention to enforcement, CBP Commissioner R. Gil Kerlikowske explained at the annual meetings of the American Iron and Steel and Metals Service Center Institutes in May 2016 that CBP seized over $900,000 worth of steel and assessed $46 million in penalties for violations of AD/CVD orders on steel products in 2015. In January 2016 alone, CBP port inspections resulted in the identification of more than $9 million in AD/CVD violations on steel plate imports.
According to Commissioner Kerlikowske, trade enforcement requires coordination with U.S. industry, dozens of U.S. interagency partners, and foreign governments to detect and disrupt the evasive and high-risk activity, deter future misconduct, and promote compliance.