In keeping with President Trump’s theme of protecting American industry and tightening potential trade abuses, on March 31, 2017, President Trump issued an executive order titled: “Establishing Enhanced Collection And Enforcement Of Antidumping And Countervailing Duties And Violations Of Trade And Customs Laws.” Here is a link to the full order.
Fine money left on the table, a solution?
That order, notes that “As of May 2015, $2.3 billion in antidumping and countervailing duties owed to the Government remained uncollected, often from importers that lack assets located in the United States.” Having worked at CBP I saw how difficult it was to collect on these penalties, especially actions involving foreign nationals.
Increased AD/CVD Bonds for high-risk importers
To address this issue the new order proposes that DHS increase “bonding requirements, based on risk assessments, on entries of articles subject to antidumping and countervailing duties, when necessary to protect the revenue of the United States.”
The order mandates that within 90 days, so by June 29, 2017, DHS shall develop a risk-based plan related to increased bonds for AD/CVD imports, along with developing other “appropriate enforcement measures.”
New enforcement procedures for inadmissible merchandise?
The order also puts a similar 90-day deadline on DHS to “develop and implement a strategy and plan for combating violations of United States trade and customs laws for goods and for enabling interdiction and disposal, including through methods other than seizure, of inadmissible merchandise entering through any mode of transportation, to the extent authorized by law.” This passage is interesting because seizure is generally the appropriate and lawful way under which merchandise is taken by the government and disposed of. This new approach will have to fit within the due process rights of the importers of seized merchandise.
Improved communications with IP rights holders
The order also addresses Intellectual Property Rights (IPR) and the desire to increase communication with rights holders regarding infringing importations and information regarding importations that have been voluntarily abandoned but would have violated US Trade laws.
Increased federal prosecutorial resources
Most importantly, the order specifies that federal prosecutorial resources will now be devoted to trade cases, which has been missing in the past. In practice, this means that a lot of these customs violations that have gone unenforced in the past may see a large uptick in civil and criminal enforcement from the U.S. Attorney’s Office.
Whats next? Find out on June 29, 2017.
We’ll have to see what June 29, 2017, will hold but for fringe importers this news is unwelcome. It means that more attention and resources will be directed at these trade violations and you can expect increased enforcement and liability. For rights holders, the news should be welcome as CBP has shown a commitment to protecting the rights of domestic IPR holders consistently through its latest actions.
It will be interesting to see the new DHS rules/regulations and enforcement priorities that develop after June 29, 2017.