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Updated: CBP Issues Interim Regulations to Create Procedures for Investigating Evasion of Antidumping and Countervailing Duty Orders
Practical Law Legal Update w-003-2022 (Approx. 4 pages)
Updated: CBP Issues Interim Regulations to Create Procedures for Investigating Evasion of Antidumping and Countervailing Duty Orders
by Practical Law Commercial Transactions
| Law stated as of 21 Oct 2016 • USA (National/Federal) |
US Customs and Border Protection (CBP) has issued interim regulations that go into effect immediately and set forth procedures for CBP to investigate claims of evasion of antidumping (AD) and countervailing duty (CVD) orders. Comments on the interim regulations have been extended from October 21 to December 20, 2016.
In accordance with Title IV of the Trade Facilitation and Trade Enforcement Act of 2015, commonly referred to as the Enforce and Protect Act of 2015 (EAPA), US Customs and Border Protection (CBP) has issued an interim rule, effective August 22, 2016, which creates procedures for CBP to investigate claims of evasion of antidumping (AD) and countervailing duty (CVD) orders. Interested parties must submit any comments to CBP by October 21, 2016.
The Interim Rule
The EAPA created a new framework for CBP to investigate third party allegations of evasion of AD and CVD orders. Prior to the EAPA's enactment, CBP could take certain enforcement action against importers allegedly evading AD and CVD orders, but it did not have the authority to allow third parties to participate in the investigation, nor was it responsible for notifying outside parties as to the outcome of its review.
CBP's new investigative powers, which supplement its existing enforcement authority, are meant to curb AD and CVD evasion. Evasion refers to the entering of merchandise into the customs territory of the US for consumption by a material and false act or a material omission which results in antidumping or countervailing duties being reduced or not applied to or collected on such merchandise.
The interim regulations require CBP to:
- Initiate an investigation within 15 business days of receipt of a properly filed allegation from an interested party, or referral from another federal agency, that reasonably suggests that merchandise covered under an AD and/or CVD order has entered the customs territory of the US through evasion. If CBP does not initiate an investigation, it is required to notify the interested party who filed the allegation within five business days of that determination. If CBP initiates an investigation, it is required to:
- notify the parties to the investigation of its decision to initiate an investigation, and specify the date of initiation, no later than 95 calendar days after that decision is made (parties to the investigation are defined to include an interested party who files an allegation and the importer(s) who allegedly engaged in evasion, but not a federal agency who requests an investigation); and
- investigate entries made within one year before the receipt of the allegation.
- Determine, not later than 300 calendar days (or 360 calendar days in extraordinarily complicated cases) after initiating an investigation, whether there is substantial evidence that merchandise covered by an AD/CVD order was entered into the customs territory of the US through evasion. This is referred to as CBP's initial determination.
- Communicate its initial determination to the parties to the investigation no later than 5 business days after making it.
If CBP makes an affirmative initial determination of evasion it will:
- Suspend the liquidation of unliquidated entries of the covered merchandise that entered on or after the date of initiation of the investigation. Liquidation is the final computation of the duties, including antidumping and countervailing duties, accruing on an individual import entry.
- Extend the period for liquidating the unliquidated entries of covered merchandise that entered before the initiation of the investigation.
- Notify the Department of Commerce of the initial determination and request, if necessary, that Commerce identify the appropriate AD/ CVD assessment or cash deposit rates for the covered merchandise.
- Require importers of covered merchandise to post cash deposits.
- Assess antidumping or countervailing duties on the covered merchandise.
- Take any appropriate actions with respect to liquidated entries, separate from the evasion investigation.
Interim Measures Mechanism
The interim rules also provide for an interim measures mechanism to ensure that appropriate duties are deposited during an investigation. Under this mechanism, CBP will determine, within 90 calendar days of initiation of an investigation, whether there is reasonable suspicion that covered merchandise entered through evasion. If CBP determines that such reasonable suspicion exists, it will immediately:
- Suspend the liquidation of unliquidated entries of the covered merchandise that entered on or after the date of initiation.
- Extend the period for liquidating the unliquidated entries of covered merchandise that entered before the date of initiation.
- Take additional measures deemed necessary to protect the revenue of the US, such as requiring a single transaction bond, additional security, or the posting of cash deposits.
If CBP takes interim measures, it must notify the parties to the investigation within five business days that an investigation has been initiated and specify the date of initiation.
If CBP determines at the conclusion of its investigation that covered merchandise was not entered into the customs territory of the US through evasion, CBP will cease applying any interim measures and liquidate the entries in the normal course.
Administrative Review Process
Following the issuance of CBP's initial determination, parties to the investigation have 30 business days to request a de novo administrative review of the determination. CBP then has 60 business days to complete the review and issue a final administrative determination.
For more general information on antidumping and countervailing duties, see:
Update
On October 21, 2016, CBP extended the comment period for the interim rule on the investigation of claims of evasion of AD and CVD orders from October 21 to December 20, 2016.