Increase in Tariff Enforcement Actions Highlights Importance of Compliance

U.S. Customs and Border Protection reports that there was a significant increase in its efforts to enforce trade remedies and other laws in 2018, highlighting some of the risk factors importers need to be aware of and the importance of taking compliance measures to mitigate them.

CBP’s trade and travel report states that in fiscal year 2018 the agency collected about US$52 billion in tariffs, taxes and other fees, including more than US$40.6 billion in tariffs, an increase of nearly 23 percent over FY 2017. CBP states that much of this increase is attributable to the Section 201 safeguards on washing machines, washing machine parts, and solar cells and panels; the Section 232 tariffs on steel and aluminium goods; and the Section 301 tariffs on imports from mainland China. As of 19 December 2018, CBP had assessed nearly US$527 million in Section 201 tariffs, more than US$1.1 billion in Section 232 aluminium tariffs, more than US$3.4 billion in Section 232 steel tariffs, and more than US$8 billion in Section 301 tariffs on goods from mainland China.

Also in FY 2018 CBP began enforcing 53 new antidumping and/or countervailing duty orders, bringing the total number of orders in effect to 469 and the value of imports subject to those orders to US$24.2 billion. To enforce these orders, which has long been a priority for the agency, CBP (i) levied more than US$92.1 million in monetary penalties on importers for fraud, gross negligence and negligence with respect to AD/CV violations, (ii) conducted entry summary reviews that resulted in the recovery of more than US$65.5 million in AD/CV duties owed, (iii) identified through audits approximately US$25 million in AD/CV duties owed (with US$2.5 million collected to date), and (iv) seized shipments with a domestic value of more than US$1.3 million for AD/CV violations.

Finally, CBP saw an increase in activity under the Enforce and Protect Act to combat the evasion of AD/CV duty orders on products such as aluminium extrusions, plywood, hangers, pencils, bedroom furniture, steel flanges and diamond sawblades. CBP received 33 allegations under EAPA from interested parties in FY 2018, nearly doubling the amount from the previous year. CBP also took interim measures in six EAPA investigations and issued final determinations in 12, up from one in FY 2017. CBP states that during the past two years it has initiated 20 EAPA investigations; conducted 18 on-site verifications in mainland China, Thailand, Vietnam, Malaysia, Cambodia and the Philippines; and prevented the evasion of US$50 million in AD/CV duties annually.