Kerlikowske Pressed on Chinese Duty Collections, Exclusion Order Enforcement at Nomination Hearing

CBP continues to fail to collect vast sums of potential revenue in import duties on certain Chinese agriculture and seafood products that entered the U.S. since 2002, along with associated bonds posted on the imports, said Sen. John Thune, R-S.D., at the Jan. 15 Finance Committee hearing on the nomination of Gil Kerlikowske for CBP Commissioner (see 14011521).

“Senator Wyden and I had been engaged in an ongoing dialogue with CBP over the last few years regarding duties that have gone uncollected on imports of Chinese honey, garlic, crawfish and mushrooms,” said Thune. “On Jan. 2, we received a letter from acting CBP Commissioner Winkowski that stated that there were roughly $140 million in imports of Chinese honey between 2000 and 2007 and that there’s more than $100 million in bonds posted on these imports not yet collected. Yet we still don’t know how much of this amount is currently in litigation and how much is likely to be collected.” Wyden and Thune last year sent a letter to CBP and the Treasury Department asking for information on the collections of antidumping and countervailing duties imports honey, garlic, crawfish and mushrooms from China (see 13021127).

The pending completion of the Automated Commercial Environment will heighten import duty collection efficiency, said Kerlikowske. “Every trade group is very encouraged by the fact that automation is underway and they have put their own time and their own resources into making sure they’ll be a part of the ACE system and others,” said Kerlikowske. “Making things more transparent through automation, making it easier and more efficient and less costly would be a major goal if I’m confirmed.”

Thune also pressed during the hearing the need to execute changes in International Trade Commission enforcement of exclusion orders. Along with Thune, Sens. Ron Wyden, D-Ore., Maria Cantwell, D-Wash., and Rob Portman, R-Ohio, submitted a request for exclusion order enforcement clarification on Oct. 22 in a letter to Acting CBP Commissioner Thomas Winkowski in response to growing industry concern and pressure (see 13110121). “The response I received indicates that CBP is in the process of making changes to how it implements these orders, such as by developing a process where more parties that are impacted have an opportunity to make their views known to CBP,” said Thune.

Kerlikowske acknowledged the need to strengthen enforcement. “I certainly don’t know the answer to that question on what CBP would undertake to be responsive on the changes necessary. But the communities that have briefed me and people at CBP are very intent on enforcing those rules,” said Kerlikowske. “I also know that it is complex and it can be a bit problematic. If I’m in the position and I’m confirmed, I would certainly make sure that the enforcement of all of the rules and regulations around that would take place.”

Congress should move to consider the Customs Reauthorization legislation in order to raise the de minimis level for imports, said Thune. The Senate Finance Committee leadership introduced the Trade Facilitation and Trade Enforcement Reauthorization Act of 2013, S. 662 (here), in March. The legislation contains a provision that raises de minimis to $800 from its current $200 level, a point that has not changed in 20 years, said Thune.

Senate Finance Committee Chairman Max Baucus, D-Mont., voiced his approval of the nominee. “CBP plays a crucial role in maintaining the flow of trade across our borders, processing nearly $2.5 trillion worth of goods every year, and it must ensure this process is thorough and efficient,” Senator Baucus said. “If confirmed, Mr. Kerlikowske will be entrusted with developing policy that has broad effects on America’s economy and safety -- a charge he is highly qualified to execute.”-- Brian Dabbs