Antidumping and countervailing duties (AD/CVD) are customs charges aimed at counteracting artificially low prices on imported goods.
AD/CVD rates can be significantly higher than other import duties – sometimes exceeding 400 percent of the value of the merchandise. In fiscal year 2015-2016, approximately $US13.9B of imported goods were subject to an AD/CVD order.
These high duty rates sometimes motivate importers to try to circumvent the duties by illegally importing goods. But beware: the penalties if you’re caught are steep.
Earlier this year, AD/CVD enforcement was added to the Priority Trade Issues (PTI) list. PTIs are issues receiving greater attention by CBP due to their potential to cause significant revenue loss, harm the U.S. economy, or threaten the health and safety of the American people. A list of current PTIs is provided on CBP’s website.
The U.S. Administration released an Executive Order on March 31, 2017 focusing on additional means to enforce AD/CVD laws. The Order states, in part, that, “[t]he Attorney General, in consultation with the Secretary of Homeland Security, is required to develop recommended prosecution practices and allocate appropriate resources to ensure that federal prosecutors accord a high priority to prosecuting significant offenses related to violations of trade laws.”
Steel is of particular interest for ADD/CVD enforcement: Several orders against steel products already exist. And new petitions and investigations against all types of steel products are on the rise, especially as the current administration has broadcasted its commitment to ensuring a fair playing field for the U.S. steel industry.
Importers may wait a long time to know whether they’re hit by these duties
The United States is the only country that uses a retrospective system to assess AD/CVD, which means that the duties collected from importers at the time of entry are only estimated. The final duties are often not determined until two to three years later, when the U.S. Department of Commerce instructs CBP to collect final duties owed.
What to do?
In this heightened enforcement environment, it is more critical than ever to be proactive in reviewing your import transactions and to address any potential issues as soon as they come to light. Prior disclosures can be used to avoid or mitigate penalties if it is revealed after the fact that applicable duties were not paid.
Learn as much as you can about the goods you’re importing before the transaction: Know your supplier; know the country of origin; and be particularly wary of any goods that seem to be priced suspiciously low.
If you have any questions regarding AC/CVD duties, or any other U.S. Customs matter, contact your local Cole International USA office and speak to one of our experienced customs professionals or email us today!
Information provided by: U.S. Customs Brokerage Dept. - Cole International USA