Pursuant to the newly-enacted Trade Facilitation and Trade Enforcement Act (the “Act”), U.S. Customs and Border Protection (“CBP”) is expected to publish regulations later this month detailing new procedures for CBP investigations into allegations of antidumping and countervailing duty evasion.
The anticipated regulations have the potential to significantly alter the CBP enforcement landscape. The regulations will not only be enforced by a newly-created Trade Remedy Law Enforcement Division but also will allow for private entities to force CBP’s hand in initiating an investigation into alleged evasion.
The Act provides that CBP must open an investigation if it receives an allegation reasonably suggesting that evasion is taking place. Allegations can be made by various interested parties such as manufacturers, producers, exporters or importers of the covered product. Trade unions and business associations are also specifically defined as “interested parties” under the Act. This process will provide domestic parties in antidumping and countervailing duty proceedings with an opportunity to participate directly in enforcing trade remedies rather than simply initiating them.
CBP has 90 days after opening an investigation to decide whether there is a “reasonable suspicion” of evasion and, upon an affirmative determination, has the authority to suspend liquidation of covered merchandise entered after the investigation began and extend the liquidation period of previously-entered unliquidated entries. CBP will also be able to require single entry bonds, additional security or even cash deposits. Notably, the Act specifically allows CBP to consider a party’s failure to cooperate with its investigation as an “adverse inference.”
CBP must then make a final determination within 300 days of initiating the investigation (CBP has the option to delay a final determination by a maximum of 60 days). If CBP determines that a party evaded antidumping or countervailing duties, CBP can retroactively assess the evaded duties on unliquidated entries, require cash deposits, initiate a penalty action or refer the matter for a criminal investigation. Importantly, CBP does not need to establish a lack of “reasonable care” in order to find evasion. CBP needs only to establish that a company has not deposited the correct antidumping or countervailing duty.
The Act provides the opportunity for an administrative appeal with CBP within 30 days of the final determination as well as a subsequent appeal to the Court of International Trade within 30 days of CBP’s administrative review.
Compliments of Grundfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP – a member of the EACCNY