On March 31st, the White House issued two Executive Orders that demonstrate continued commitment to enforcement of US trade and customs laws.
The first Executive Order (EO), the “Presidential Executive Order on Establishing Enhanced Collection and Enforcement of Antidumping and Countervailing Duties and Violations of Trade and Customs Laws,” takes into consideration import violations on merchandise subject to antidumping and countervailing duties—the White House estimates that violations have cost the government over $2 billion in lost revenue. In addition, the EO directs the Secretary of Homeland Security (DHS) to develop parameters, by the end of June, which “would require covered importers that, based on a risk assessment conducted by CBP, pose a risk to the revenue of the United States, to provide security for antidumping and countervailing duty liability through bonds and other legal measures” and to “develop and implement a strategy and plan for combating violations of United States trade and customs laws for goods and for enabling interdiction and disposal, including through methods other than seizure, of inadmissible merchandise entering through any mode of transportation, to the extent authorized by law.” The EO also requires the Secretary of the Treasury and DHS to combat infringement of intellectual property rights (IPR) and to be more transparent with IPR holders. Lastly, the EO directs the Attorney General, in cooperation with DHS, to enforce criminal prosecution of customs and trade law violations.
In the second EO, the “Presidential Executive Order Regarding the Omnibus Report on Significant Trade Deficits,” the White House notes growing US trade deficits and unfair trade practices of other countries. In response, the White House has directed the US Trade Representative (USTR) and Commerce Secretary to develop an Omnibus Report on Significant Trade Deficits. The Report shall identify those foreign trading partners with which the United States had a significant trade deficit in goods in 2016. For each identified trading partner, the Report shall:
- assess the major causes of the trade deficit, including, as applicable, differential tariffs, non-tariff barriers, injurious dumping, injurious government subsidization, intellectual property theft, forced technology transfer, denial of worker rights and labor standards, and any other form of discrimination against the commerce of the United States or other factors contributing to the deficit;
- assess whether the trading partner is, directly or indirectly, imposing unequal burdens on, or unfairly discriminating in fact against, the commerce of the United States by law, regulation, or practice and thereby placing the commerce of the United States at an unfair disadvantage;
- assess the effects of the trade relationship on the production capacity and strength of the manufacturing and defense industrial bases of the United States;
- assess the effects of the trade relationship on employment and wage growth in the United States; and
- identify imports and trade practices that may be impairing the national security of the United States.
Both EO’s demonstrate that continued commitment to enforcement of US trade and customs laws is a priority for the current administration. For importers, especially those with shipments that fall under antidumping and countervailing duty compliance, this means ensuring compliance throughout the supply chain. Regardless, all importers should perform audits, assess safety plans and high risk areas, establish and document preventive measures (to address potential CBP audits), create/establish appropriate written internal controls over import operations, and plan for increased compliance enforcement.
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