There are numerous indicators that the United States is stepping up its efforts to combat circumvention of its antidumping, countervailing duty, and general customs laws, and all signs point to even more vigorous enforcement on the horizon.
The past few months alone have seen several notable criminal law enforcement actions related to antidumping orders. For example, in March, a Baltimore-area importer was arrested by U.S. Customs and Border Protection (CBP) agents, at the behest of the U.S. Department of Justice (DOJ), for allegedly undervaluing and misclassifying entries of plastic grocery bags from China in order to avoid antidumping duties. The importer faces a maximum of seventy-seven years in prison, as well as $2.5 million in fines in addition to the $1.15 million in antidumping duties already owed. In May, following an investigation coordinated by CBP and DOJ, two individuals were sentenced to several years in prison, and ordered to pay penalties, for, among other things, falsely labeling seafood products in order to avoid roughly $146 thousand in antidumping duties on catfish from Vietnam.
All signs point to the likelihood that this is the mere tip of the iceberg. As anyone with a passing familiarity with antidumping proceedings knows, the two aforementioned cases involve relatively small quantities of money. Many antidumping orders involve the assessment of hundreds of millions of dollars in duties each year. Given the willingness of CBP and DOJ to coordinate criminal investigations, and eventual indictments and arrests, over unpaid duties amounting to a mere $146 thousand, it stands to reason these agencies will be all the more motivated to pursue cases involving larger sums.
Circumvention of U.S. antidumping and countervailing duty laws is also drawing unprecedented attention on Capitol Hill. For example, in May, the powerful Senate Finance Committee heard testimony from high-ranking business officials, as well as Mr. Allen Gina, Assistant Commissioner of CBP's Office of International Trade, concerning the harm caused to the U.S. economy by such circumvention, as well as the challenges faced by CBP and U.S. Department of Commerce officials under the current anti-circumvention enforcement scheme. Furthermore, Senators Ron Wyden and Olympia Snowe have introduced a bill specifically designed to boost the effectiveness of the enforcement of antidumping and countervailing duty laws. The Enforcing Orders and Reducing Circumvention and Evasion (ENFORCE) Act is intended to address such common circumvention techniques as transshipping goods through third countries, and re-labeling shipments with false countries of origin or false descriptions of goods.
This focus on circumvention isn't likely to go away in the current international trade environment. As a consequence, companies involved in international trade will no doubt face increasing risks for any attempts to circumvent antidumping and countervailing duty laws. To wit, engaging in circumvention exposes companies to the risk of seizures of shipments, imprisonment of U.S.-based associates, monetary penalties, and being banned from exporting to the United States altogether.
To avoid such trouble, companies trading in goods subject to antidumping or countervailing duty investigations and orders can simply elect to participate in the investigation and administrative review proceedings run by the U.S. Department of Commerce and U.S. International Trade Commission. In obtaining a company-specific or separate duty rate through such proceedings, companies may secure their access to the U.S. market, in full compliance with U.S. fair trade law.
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