New Regulations Allow for Investigation of Duty Evasion

U.S. Customs and Border Protection (CBP) released interim final regulations setting up a new procedure for investigating evasion of antidumping (AD) and countervailing duties (CVD).  The interim regulations, which are subject to public comment, put into place important provisions of the “Enforce and Protect Act of 2015,” signed into law by President Obama in February 2016.

The regulations will be published Monday, August 22, 2016 in the Federal Register, and will take effect immediately.

As a result, U.S. manufacturers, producers, importers and unions, among other parties, now have an important new tool to address parties who evade payment of AD and CVD duties.   Evasion can include misrepresentation of country of origin, false shipping or entry documentation, or misreporting of the products themselves.  Domestic industries have sought to strengthen the trade laws on duty evasion for more than five years.

The new regulations, which will be set forth in 19 C.F.R. Part 165:

  • Allow interested parties to file evasion allegations;
  • Require CBP to decide to initiate an investigation within 15 days of an allegation, and to notify all parties within 95 days of that decision.
  • Set forth investigation procedures for CBP, including the potential use of questionnaires and in-country verification;
  • Allow CBP to make adverse inferences against a party that fails to cooperate with the investigation;
  • Provide greater transparency through public versions of any filings made by interested parties; and
  • Require CBP to make an evasion determination within 300 days of initiation.

Because they are interim regulations, they will be subject to further comment and potential amendment before becoming final.  The public will have 60 days following the publication of the interim regulations to submit comments to CBP.