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House Republicans and Democrats Introduce Differing Customs Reauthorization Proposals
December 20, 2012


Recently, the Customs Trade Facilitation and Enforcement Act of 2012 was introduced by House Ways and Means Trade Subcommittee Chairman, Kevin Brady. This legislation provides direction on facilitating legitimate trade, improving enforcement, and measuring U.S. Customs and Border Protection’s (“CBP”) progress in the above areas. A similar bill was introduced by House Democrats on December 13, 2012 with one major difference in the area of enforcement of antidumping and countervailing duties.

The bill introduces several provisions that intend to facilitate legitimate trade and to foster greater transparency with respect to new importers and non-resident importers. These include the following provisions: 

  • Section 4 establishes an interagency review board that will review proposed changes to regulations.
  • Section 131 Requires Customs and Immigration and Customs Enforcement to create a joint strategic plan to facilitate trade and enforce customs and trade laws with respect to Customs Priority Trade Issues related to import safety, penalties, revenue, textiles, trade agreements, agriculture, and antidumping and countervailing duties.
  • Section 202 expands the role of the Commercial Customs Advisory Committee to advise and provide recommendations on CBP’s commercial operations.
  • Section 212 establishes the Centers of Excellence and Expertise.
  • Section 217 requires Customs to provide educational seminars to its personnel to classify and appraise products, to improve trade enforcement efforts, and to ensure the enforcement of child labor laws.
  • Section 221 establishes an Importer of Record Program that will help Customs verify new importers.
  • Section 222 requires customs brokers to report the identity of the importers with whom they work.
  • Section 224 requires non-resident importers to designate a resident agent to accept service of process on its behalf, and to be liable to the United States of duties and penalties or other fines assessed against it.
  • Section 225 establishes a certified importer program that will expedite the release of cargo to importers that are validated Tier 2 or Tier 3 participants in C-TPAT.
  • Section 402 increases the de minimis value for purposes of imports from $200 to $800 and increases the value threshold for formal entries to $2500.
  • Section 404 initiates drawback modernization by allowing use of eight-digit tariff classifications for determining eligibility for certain types of drawback claims. It also changes the time-frames for filing drawback from 3 years to 5 years.


The new bill also seeks to improve enforcement in two major areas. The first is the protection of intellectual property rights and the second is prevention of the evasion of antidumping and countervailing duty orders.

With respect to the protection of intellectual property rights, Section 231 of the bill proposes authorizing CBP to immediately furnish specific information about infringing merchandise either being imported or exported to the U.S. trademark or copyright owner without any redactions. The information may include anything appearing on the merchandise or its retail packaging. In addition, CBP may send pictures or samples of the infringing product to the owner for its review.

To improve the enforcement of antidumping and countervailing duty orders, the following provisions have been proposed:

  • Section 311 establishes a trade remedy enforcement division that will develop and administer policies to prevent and counter evasion, direct enforcement and compliance activities, and conduct commercial risk targeting of cargo destined for the U.S.
  • Section 311(c) establishes the National Targeting and Analysis Group dedicated to identifying evading imports.
  • Section 312 authorizes the collection of information to determine whether the evasion of antidumping and countervailing duties is taking place including by issuing questionnaires with respect to entry documents.
  • Section 314 authorizes the secretary to negotiate and enter into bilateral agreements with the customs authorities of foreign countries for the purpose of preventing the evasion of trade remedy laws of the United States.
  • Section 321 requires CBP to assign and train personnel responsible for preventing and investigating evasion of antidumping and countervailing duty orders.


The similar bill introduced by House Democrats strengthens the provisions with respect to the enforcement of antidumping and countervailing duty orders and would require CBP to initiate an investigation within ten (10) days of the receipt of an allegation that merchandise covered by an antidumping or countervailing duty order is entering the U.S. through evasion.


Finally, the Act proposes provisions for measuring CBP’s progress in the above areas. For example, Section 203 of the bill will require CBP to report on its progress with the implementation of ACE. Furthermore, Section 215 of the bill will require CBP to report on its effectiveness of trade enforcement activities. Similarly, Section 216 will require the Commissioner of CBP to establish priority and performance standards to measure the development and levels of achievement with respect to the implementation of ACE, the modernization of drawback, collection of antidumping and countervailing duties, expedited clearance of cargo, and the Centers for Excellence and Expertise (“CEE”).


If you have any questions concerning this proposed legislation, please contact a Barnes/Richardson attorney.

 

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