Tougher Enforcement of AD/CV Duty Orders is Aim of Proposed Regulatory Overhaul
Source
American Shipper
Post Date
08/14/2020
Strengthening enforcement of antidumping and countervailing duty laws and creating new tools to address the circumvention and evasion of AD/CV duties are among the aims of a proposed overhaul of International Trade Administration regulations. Comments on this proposed rule are due no later than Sept. 14. Scope Rulings The ITA issues rulings on the scope of AD/CV duty orders; i.e., whether a specific product is or is not covered by an order. There are several significant proposed changes to scope ruling procedures. Perhaps most importantly, the proposed rule would provide that suspension of liquidation and cash deposit requirements for entries affected by scope rulings would apply to all unliquidated entries dating back to the earliest suspension date under the AD/CV duty order (which is normally the preliminary determination in the underlying investigation) instead of the date of initiation of the scope inquiry. This would appear to substantially increase duty liability for importers of such goods. The ITA states that this change is needed because the current tem encourages ¡°gamesmanship, delay, and indeed, duty evasion.¡± The ITA acknowledges that the proposed approach may be unfair to importers who are genuinely not aware that their products are within the scope of an order until a scope ruling is issued but asserts that it is warranted in light of ¡°the very real risk¡± of duty evasion and circumvention by importers that have failed to exercise due diligence or that purposefully seek to avoid AD/CV duties. The ITA seems to suggest that such practices have been one of the challenges it has faced in fully collecting AD/CV duties over the last 20 years. Similarly, the proposed rule would hold that a ruling that a product is within the scope of an AD/CV duty order is a determination that it has always been within that scope and provide for the application of that ruling to all unliquidated entries of subject goods. Another change that would impose an additional duty burden on importers would be the elimination of the requirement for the ITA to notify U.S. Customs and Border Protection of a preliminary determination that a particular product is not within the scope of an AD/CV duty order. As a result, cash deposits and the suspension of liquidation for entries of such goods would still be required after such a preliminary ruling until the ITA issues a final ruling. Other changes related to scope rulings include the following. - clarifying that the ITA may self-initiate a scope inquiry if it believes one is warranted - allowing the ITA to address scope questions in other segments of AD/CV proceedings such as administrative reviews, circumvention inquiries, and covered merchandise referrals - requiring parties to fill out and file a standardized scope ruling application and provide the requested information to the extent it is reasonably available to them - requiring applicants to demonstrate that the product at issue is or has been in actual production as of the filing of the application - allowing the ITA to apply a prior scope ruling to products with the identical physical description from the same country of origin instead of conducting a new scope inquiry - exting from 45 to 120 days the deadline for the ITA to complete a scope inquiry - codifying the ITA¡¯s substantial transformation test to determine the country of origin of a product and its ability to apply another reasonable origin test if substantial transformation is not appropriate - clarifying and codifying the substantive basis for scope rulings pertaining to country of origin, scope language interpretation, and mixed media products (subject goods assembled or packaged with non-subject goods) Circumvention Rulings As with scope rulings, the proposed rule would make the following changes with respect to rulings on whether an AD/CV duty order is being circumvented: (1) require CBP to susp liquidation of any unliquidated entries (not only those that entered on or after the date of initiation of the inquiry) when the ITA makes an affirmative preliminary or final circumvention determination, and (2) eliminate the requirement to notify CBP of a negative preliminary circumvention ruling and provide that suspension of liquidation and cash deposit requirements will remain in effect after such a ruling until the ITA issues a final ruling. The proposal would also (1) clarify the ITA¡¯s authority to self-initiate circumvention inquiries and apply circumvention determinations on a country-wide basis, (2) shorten the deadline for initiating a circumvention inquiry from 45 days to 20 days and establish a new deadline for preliminary determinations of 150 days from the date of publication of the initiation, and (3) codify the criteria the ITA will consider before reaching a circumvention determination. Covered Merchandise Referrals Covered merchandise referrals are requests from CBP to determine whether specific goods are covered by an AD/CV duty order as part of an investigation of potential duty evasion under the Enforce and Protect Act. The proposed rule would establish new regulations on such referrals that largely mirror the proposed scope and circumvention ruling regulations and would allow the ITA maximum flexibility to further develop its procedures and practice as it gains more experience in this new area of the law. Certifications The proposed rule would require certifications by importers and other interested parties as to whether goods are subject to an AD/C duty order. Applicable cash deposits could be imposed when such a certification is not provided or contains materially false, fictitious, or fraudulent statements or representations or material omissions. This would be separate from CBP¡¯s authority to address import documentation related to negligence, gross negligence, or fraud. Other proposed changes include (1) requiring importers to file certifications regarding the payment or reimbursement of AD/CV duties in either electronic or paper form in accordance with CBP requirements, (2) eliminating the requirement for specific reimbursement certification language, and (3) allowing CBP to accept a reimbursement certification in accordance with its protest procedures under 19 USC 1514 even though such certification is required prior to liquidation. New Shipper Reviews A new shipper review enables exporters or producers that did not export the subject goods during the original AD/CV duty investigation to seek their own individual AD/ CV duty rates. The proposed rule would toughen the requirements for new shipper reviews by (1) requiring producers or exporters to demonstrate (with specified information) the existence of a bona fide sale of subject goods in the U.S., (2) eliminating importers¡¯ ability to post an AD/CV-specific bond or security in lieu of a cash deposit, and (3) expanding the ITA¡¯s ability to rescind new shipper reviews in the absence of sufficient infor
