CBP Admits Deficiencies Resulted in Widespread Failure to Collect Chinese Import Duties

The CBP single transaction bond (STB) accounting process suffered from deficiencies from 2000 to 2007 that resulted in failure to collect “substantial” antidumping and countervailing duties on Chinese garlic, crawfish tail meat, canned mushrooms and honey imports, said Acting CBP Commissioner Thomas Winkowski in a Jan. 2 letter to Sen. Ron Wyden, D-Ore. The letter is a response to Wyden concerns expressed in letters to CBP over recent months over failure to collect the relevant duties. Some sureties are continuing to contest CBP demands for payment or have declined payment after reaching insolvency, said Winkowski.

“Court actions are continuing, and once decided, should result in either the payment of connected bills with interest or write-off of the debt due to judicial determinations,” said Winkowski. “System limitations made it impossible to track bond coverage or collection action by commodity, and thousands of documents would have to be located and manually pulled and reviewed to provide itemized reporting.” The total unpaid duties total nearly $650 million, according to the Winkowski letter. Sen. John Thune, R-S.D., broached the matter during the Jan. 15 Finance Committee hearing on the nomination of Gil Kerlikowske for CBP Commissioner (see 14011523).

CBP is “steadily deploying” the Automated Commercial Environment (ACE) in order to replace the Automated Commercial System and address certain deficiencies regarding automation, it said. CBP also promulgated guidelines in 2012 for ports on when STB are required and is implementing risk-based bonding policies. “CBP’s goal of improved management of STBs in ACE was addressed in the President’s Fiscal year 2014 Budget by requesting over $3 million in support of this program,” said Winkowski. “Completion of this project would make it possible for CBP to manage the STB collection process more effectively, potentially reducing the number and type of bond deficiencies such as those presently argued by sureties in litigation as defenses to payment.”

Email ITTNews@warren-news.com for a copy of the letter.