Senate Passes the Customs Reauthorization Bill

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May 19, 2015

    The Senate passed the Customs Reauthorization Bill on May 14, 2015 with a 78-20 vote.  In the Senate’s version of the bill, known as the ENFORCE Act, there are several new and updated provisions. Despite the vote in favor of the reauthorization, members of the House are concerned over the currency manipulation provision.  Ways and Means Chairman Paul Ryan stated, “I look forward to reconciling the differences between the House and Senate bills so that we can ensure strong enforcement of our trade laws.”  A letter was sent from organizations including the American Appar¬el and Footwear Association, the National Customs Brokers & Forwarders Association of America and the International Wood Products Association and others, to the House Ways and Means Committee Chairman Ryan and Ranking Member Levin to voice their support for the House bill, while arguing against the Senate version on May 12, 2015.  The letter read, “Proposals included in the Senate bill are not a balanced approach to enforcement.”  However, other organizations, such as the U.S. Council for International Business support the Senate bill and the implementation of measures, such as the International Trade Data System (ISDS), which they believe is necessary for the World Trade Organization’s Trade Facilitation Agreement.  The system would allow CBP to collect documents and data, while also providing permits, licenses, and certificates for exports and imports.

    New rules will also be implemented for antidumping (AD) and countervailing duty (CVD) cases.  After CBP receives an allegation regarding imports, they must start an investigation within ten business days and a final determination must be provided within 270 days.  There is also an adverse facts provision, which states that CBP may ask for the U.S. producer and the importer for information.  If they fail to provide the information as best as they can, the government can make an adverse inference.  If there is an affirmative determination, the liquidation of unliquidated shipments would be halted, the time period for “liquidating unliquidated entries of such covered merchandise that are subject to the determination” would be extended, Commerce would calculate a duty rate, and CBP would “require the posting of cash deposits and assess duties on entries”.  During the investigation, a preliminary determination would be decided within 90 days.
    
    The Senate version contains protections for intellectual property rights.  Images of the products at issue would be provided to the rights holders to further determine if the products are in violation.  Once the bill is enacted, CBP has 180 days to develop a method for enforcing copyrights that are still pending.  The United States Trade Representative would also need to designate countries that do not provide protection to trade secrets and help develop a plan to correct this issue.

    Another provision grants duty-free status to exports returned within a three year period.  CBP would issue penalties for brokers “conspiring to commit an act of terrorism”.  The bill states there will also be an “exemption from duty or residue of bulk cargo contained in instruments of international traffic previously exported from the United States”.  A Commercial Targeting Division would be developed in CBP’s Office of Trade.  National Targeting and Analysis Groups would be created to designate goods that violate trade and customs regulations.  Furthermore, there would be new regulations to make sure the public has access to proposed policies.  According to the bill, the de minimis value of goods will be increased from $200 to $800.

    There will be alterations to the drawback law to simplify procedures, such as changes in filing requirements.  Drawback claims would need to be made online and within five years of the importation of the merchandise.  Trade enforcement priorities will now be defined as “acts, policies, and practices the elimination of which is likely to have the most significant potential to increase United States economic growth”.  Additionally, there are provisions to protect the U.S. from illegally imported honey.  CBP will be required to have a safety rapid response plan in place by December 31, 2016.

    CBP will implement a new importer program that will measure the “level of risk assessed by U.S. Customs and Border Protection for protection of revenue of the Federal Government.”  In addition, lampposts, lamppost basses and cast utility poles will now need country of origin labels.

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