Last week, the Senate Committee on Appropriations submitted a report regarding the Department of Homeland Security Appropriations Bill, 2015 (S. 2534) emphasizing the importance of trade law enforcement.
- Directs U.S. Customs and Border Protection (CBP) to dedicate $3 million to develop an automated system for the administration and oversight of Single Transaction Bonds (STBs);
- Instructs CBP to analyze why the agency has been unable to collect $1.6 billion in unpaid antidumping and countervailing duties on imports from China, issuing a statement as to the reasons why;
- Directs CBP to brief the Committee annually on the agency’s efforts to improve the enforcement and collection process;
- Asks CBP to review the membership of the Advisory Committee on Commercial Operations (COAC) and consider including domestic industries affected by unfair trade on the Trade Enforcement subcommittee to provide advice through the antidumping working group;
- Requires CBP to work with other agencies to increase antidumping and countervailing duty collections, while providing a public report on an annual basis summarizing CBP’s efforts to collect past due amounts and increase current collections, particularly with respect to unfairly traded imports from China;
- Requests that CBP work with the U.S. Department of Commerce (Commerce) to identify opportunities to improve the timeliness, accuracy, and clarity of liquidation instructions issued by Commerce to CBP;
- Directs CBP to report to the Committee regarding the collection of owed antidumping and countervailing duties, including the number of claims, the value of each claim, the stage of collection for each claim, and the date on which each claim was referred for further action to either the CBP Chief Counsel or the Department of Justice (a public version of this report is to be published on CBP’s website);
- Requires CBP to provide a separate report detailing any antidumping duty or countervailing duty order for which more than $25 million in assessed duties is secured by bonds that were presented in lieu of cash deposit during the pendency of a new shipper review (NSBs);
- Asks CBP to report, in consultation with Commerce and the Department of Treasury, on how requiring cash deposits – and not allowing importers to present NSBs – during the pendency of new shipper reviews would strengthen the administration of antidumping and countervailing duty laws;
- Urges the United States Trade Representative (USTR) to include in the principal negotiating objectives of the United States the objectives of preventing evasion of trade remedy laws through information exchanges and site visits for any trade agreements under negotiations as of the date of this report or future trade agreement negotiations; and
- Requests that Commerce and CBP to develop a legislative proposal to amend federal law to remove any legal barriers to the sharing of appropriate and necessary information that would facilitate and improve enforcement of trade remedy laws.
These initiatives, spearheaded by Senator Mary Landrieu (D-LA), would represent significant improvements in the enforcement of U.S. trade laws.
STBs, for example, offer CBP a powerful tool in preventing the evasion of trade remedies by stopping fraudulent merchandise before it enters the U.S. market. Companies trading in falsely labeled and falsely declared shrimp products tend to use shell company importers that disappear once federal enforcement agencies have developed proof of fraud. STBs demand that importers post some security regarding questionable shipments in order to enter merchandise while investigations take place. If the importer can demonstrate the legitimacy of its claims as to the origins of the shrimp, the bond is released. More often than not, however, the simple requirement of an STB frustrates the logic of the shell company scheme in the first instance. By requiring some security, shrimp traders attempting to skirt U.S. laws have to expend additional capital and resources to carry out circumvention schemes. This additional requirement boosts incentives to participate in the many legal avenues available to challenge antidumping and countervailing duty obligations, while dis-incentivizing fraud.
Emphasizing the prevention of evasion of trade remedy laws in trade negotiations is also of great importance to stopping fraudulent merchandise before it enters the U.S. market. Initial shipments from fly-by-night foreign exporters may trigger investigations by CBP and other federal law enforcement agencies. However, without the cooperation of foreign governments, the investigative tools available to these agencies are extremely limited. With cooperation, federal agencies can verify claims made by foreign exporters and U.S. importers or, alternatively, quickly demonstrate the claims made by these parties are false.
Moreover, as an advisory group of private industry members, the COAC has worked with CBP in the past to assist in the development of enforcement strategies regarding antidumping duty and countervailing duty orders. While the statute authorizing the COAC does not limit the membership of the Committee, CBP has adopted regulations that unfortunately allow for the participation only of importing companies and not domestic industries impacted by unfair trade. This design unintentionally insures that the Committee’s advice is unlikely to promote effective enforcement of trade remedy laws but, instead, mitigate the impact of these laws on importers.
“Senator Landrieu’s commitment to fair trade in shrimp and all other markets where domestic industries have faced waves of dumped and subsidized imports is vital to keeping family businesses open and operating in Louisiana and throughout the country,” said John Williams, executive director of the Southern Shrimp Alliance. “The Department of Homeland Security Appropriations Bill appropriately focuses on the prevention of fraud, giving CBP and other federal agencies greater tools to stop fraudulent imports before they enter the U.S. market and threaten both consumers and U.S. producers.”
Review the Senate Appropriations Committee’s Report on the Department of Homeland Security Appropriations Bill (S. 2534) (June 26, 2014):