AD/CVD Chief Touts Collaboration with CBP & ICE Against Duty Evasion and Fraud
The Import Administration is working closely with partner agencies including CBP and Immigration and Customs Enforcement to fight antidumping and countervailing duty evasion and fraud schemes, said Assistant Secretary Paul Piquado at Georgetown Law School’s 2013 International Trade Update Conference in Washington, D.C., Feb. 28. A key tool in this cooperation is the Automated Commercial Environment, he said. The collaboration has resulted in several successful criminal prosecutions related to duty evasion and fraud, he said. (Import Administration is the unit within the International Trade Administration tasked with administering AD/CV duties.)
“A key component of the administration’s trade agenda is to leverage and mobilize resources and expertise across the federal government to develop and pursue enforcement actions to ensure a level playing field at home and abroad,” Piquado said. “This type of collaboration … happens on a daily basis between the Import Administration and Customs.”
Through ACE, IA is able to more efficiently communicate with CBP, Piquado said. ACE allows real-time communication with CBP staff at ports, Piquado said. CBP officers can contact IA with questions about AD/CV duty assessment and entries they’re in the process of liquidating. It has also allowed the application of per unit AD/CV duty rates to address situations where companies are undervaluing their merchandise, he said.
IA frequently shares information with CBP, ICE, and other law enforcement agencies in cases of suspected fraud and duty evasion, Piquado said. This can take the form of IA discovering information in a proceeding and forwarding it to CBP and ICE, or a request from CBP or ICE for specific information, he said.
Once an investigation is initiated, IA assists CBP, ICE, or the U.S. Attorney tasked with the case with assistance and supporting information. The information has resulted in “indictments, convictions, and in fact prison sentences,” Piquado said. Examples include a steel wire garment hangers case, where information shared by IA led to the arrest of a U.S. importer that had evaded duties, and the recent AD duty case on honey from China, “which has resulted in the indictment of ten executives in a case involving more than $40 million worth of imported merchandise,” Piquado said (see ITT’s Online Archives 13022131 for summary).
“Customs and our team thus meets frequently with one another to discuss enforcement issues and identify additional ways in which our agencies can continue to collaborate and identify and prevent fraud and evasion going forward,” Piquado said. “I think our work has borne fruit, and laid the groundwork for even closer collaboration in the future.”
CBP Still Faces Enforcement Issues
However, CBP still has work to do in enforcement against duty evasion and fraud, said Elizabeth Drake of Stewart and Stewart, speaking on the same panel. When combating evasion, CBP “faces constraints in terms of what it can do when it's faced with noncooperation from a foreign producer or from a foreign country government” she said. Fraud and evasion often originate and take place entirely abroad, and CBP’s ability to conduct verifications is very limited because the foreign government has to agree. “China for example has never agreed to an on-site verification in a Customs enforcement matter,” she said.
Even when evasion does occur, penalties are rarely collected, Drake said. According to a Government Accountability Office Report, only $5 million of the $208 million in penalties levied for AD/CV duty evasion between 2007 and 2011 were collected. Part of this is due to CBP not suspending liquidation of suspected entries, she said, so entries can be liquidated while investigations are pending. CBP did take a step in the right direction last year when they issued instructions on enhanced boding requirements where AD/CV duty issues are suspected, Drake said.