Caught in the Crosshairs: CBP Enforcement of Antidumping and Countervailing Duty Orders

Abstract

Listen

Translate article

Given the myriad of government regulations governing the import of merchandise into the United States, many companies are struggling to keep 'ahead of the curve' and effectively identify the 'landed cost' of imported merchandise so that planned profit margins turn into actual ones. Although regular US Customs duties may often be a small part of that calculation (or even not a part at all because many products are duty-free), another 'hidden' cost can be antidumping and countervailing duties. This article examines that issue and why importers need to focus on this increasingly important financial aspect of trade compliance and cost planning. US Customs and Border Protection (CBP or Customs) has identified the enforcement of Antidumping and Countervailing Duties (AD/CVD) as one of eight Priority Trade Issues (PTI) to receive heightened scrutiny from the agency and its personnel in 2013. CBP's designation of AD/CVD duties as a PTI indicates that CBP believes the area presents a high risk of significant revenue loss - a key concern for the agency given its current focus on 'protecting the revenue'. Pursuant to this designation, CBP has been vigorously investigating importations of goods suspected to be covered by current AD/CVD orders in an effort to ensure maximum compliance by US importers and to collect AD/CVD on covered products. CBP's enforcement efforts present a significant compliance risk for importers which have not enacted any AD/CVD controls beyond relying solely on their customs broker to flag potential AD/CVD imports. Importers - in coordination with their in-house trade compliance professionals and/or outside advisors - should implement a robust AD/CVD compliance regime to monitor and flag the presence of any potential AD/CVD obligations prior to importing goods into the United States. Failure to do so can have catastrophic consequences for uninformed importers; if not previously accrued for, the draconian nature of some AD/CVD rates, when combined with potential penalties for failing to report such rates, presents many importers with insurmountable duty liabilities.