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.

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.

Civil Asset Forfeiture Explained

Civil forfeiture… Many people have no idea what that phrase means. So, lets break it down.

Civil forfeiture defined

First, the civil part. Generally there are two broad types of court cases in the U.S., civil and criminal. Criminal is when the state is prosecuting a person for committing a crime. When you watch Law & Order, those are criminal cases. The burden of proof for criminal cases is beyond a reasonable doubt–quite a high burden. Civil cases, by contrast are typically cases where one party is suing another. Classic examples include, you suing someone when they rear-end you or a business suing another business for failing to meet the terms of a contact. The burden in civil cases is preponderant evidence, which in simple terms means was it more likely than not, or in numerical representation, its more than 50% likely that one side has proven their case. Preponderant evidence is a much lower burden when compared to proving something beyond a reasonable doubt.

Forfeiture is when the state takes property from an individual, generally due to some sort of wrongdoing that is related to, or perpetrated with use of, the subject property.

Historically, law enforcement agencies would forfeit property subject to a criminal prosecution. More recently, law enforcement agencies on the federal and state-level, across the country, have started pursuing civil forfeiture independently.

So, right now, you’re saying, “I get it, what’s so bad about civil forfeiture?” Well, it all comes down to the burden of proof.

Lets work through a quick illustration.

You’re driving back from the dock where you just sold your boat for $12,000 dollars. You’re happy you got what you were asking and in your after-sale exuberance you happen to run a light that is just turning from red to yellow. Local law enforcement pulls you over. They ask to search your car, you oblige; you’ve got nothing to hide. In your center console they find an envelope with $12,000 in it. You’re driving a big black SUV because, well, it was good for towing the boat. You happen to have two cell phones because you are self-employed. Finally, in your center console there are some dried ground up green leaves from when you were bringing ferns back from Home Depot months ago. Near them are some small ziplock bags you used for fishing gear and figure would be worth holding on to since the new boat owner doesn’t fish and didn’t want them. OK whats the point?

But guess what? Your $12,000? Seized. Your nice big black SUV? Seized. That means you cant use either until the government gives them back to you. What for? Well, you’re a suspected drug dealer…

The police report reads something like this ‘green leafy material consistent with marijuana found in center console near plastic baggies which is consistent with drug dealers who package drugs for individual sales in small quantities. $12,000 cash found with questionable source, again consistent with drug dealer. Individual had two cell phones, consistent with drug dealer.’

You then spend months trying to get your car back. No criminal case follows but you don’t have a car, you can’t work. You are draining your savings and that $12,000 from your boat sale would really come in hadny, but guess what that is still subject to forfeiture to. You never get prosecuted, the case is too weak, but the state proceeds with civil forfeiture.

The Burden of Proof

This is where the burden really matters. Civil forfeiture, they only have to show that its more likely than not that you were using your SUV to further your drug dealing enterprise and that the $12,000 was proceeds or intended to be used to further your drug kingpin. With a criminal case and forfeiture they have to prove all that beyond a reasonable doubt. Right now you should be seeing a light bulb. Law enforcement sure has. They know criminal cases are tough to win, but with civil forfeiture they can win more cases and bring in the money and resources to keep their operations going.

This scenario sounds pretty crazy right? Well, sadly, its not. Civil forfeiture is a huge money-maker for local law enforcement agencies. This is well documented. It can cause great harm to families and individuals.

Ivancie Law

assets

New executive order on anti-dumping and countervailing duties