GAO Report on AD/CV Duty Evasion Says CBP Should Enhance Info Sharing, Tracking
A report on detection and deterrence of evasion of antidumping and countervailing duties released by the Government Accountability Office May 17 said U.S. Customs and Border Protection efforts are hindered by a lack of information sharing and tracking. The report, entitled “Antidumping and Countervailing Duties: Management Enhancements Needed to Improve Efforts to Detect and Deter Duty Evasion,” examines (1) how CBP detects and deters AD/CV duty evasion; (2) factors that affect CBP’s efforts to detect and deter AD/CV duty evasion; and (3) the extent to which CBP tracks and reports on its efforts. GAO also recommended several actions CBP can take to more effectively address AD/CV duty evasion. ITT will provide a comprehensive summary of the report in a future issue.
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CBP Detection and Deterrence of Evasion Hindered by Lack of Info, Etc.
GAO said that, between fiscal years 2007 to 2011, CBP assessed civil penalties totaling about $208 million against importers evading AD/CV duties. However, several factors affect CBP’s efforts to detect and deter AD/CV evasion. Highlights of the report include:
External challenges in gathering evidence and enforcement. CBP faces several external challenges in attempting to gather conclusive evidence of evasion and take enforcement action against parties evading duties, including (1) the difficulty of verifying clandestine evasion; (2) limited access to evidence located in foreign countries; (3) the specific and complex nature of products subject to AD/CV duties; (4) the ease of becoming an importer of record; and (5) the limited circumstances under which CBP can seize goods evading AD/CV duties.
Poor information sharing with Commerce. Gaps in information sharing also affect CBP efforts. Although GAO said interagency communication has improved, CBP still lacks information from the Department of Commerce that would enable it to better plan its workload. Better information sharing would help mitigate the administrative burden it faces in processing AD/CV duties, and therefore devote more resources to address evasion.
Lack of internal info sharing promotes avoidance of larger bond amounts. CBP has encouraged the use of larger bond amounts to protect AD/CV duty revenue from the risk of evasion, but CBP has neither a policy nor a mechanism in place for a port requiring a larger bond the share this information with other ports in case an importer withdraws its shipment and attempts to make entry at another port to avoid the higher bond amount.
No systemic tracking or reporting of data to inform policy. CBP does not systematically track or report key outcome information that CBP leadership and Congress could use to assess and improve CBP’s efforts to deter and detect AD/CV duty evasion. CBP cannot readily produce key data, such as the number of confirmed cases of evasion, and CBP does not consistently track or report on the outcomes of allegations of evasion it receives from third parties.
GAO Recommendations Include Interagency Info Sharing, Tracking System, Etc.
GAO made several recommendations to enhance CBP’s efforts to address AD/CV duty evasion, including that CBP create a policy and a mechanism for information sharing among ports regarding the use of higher bond amounts and develop and implement a plan to track and report on these efforts. GAO said that CBP and the Department of Commerce generally concurred with GAO’s recommendations.
(See ITT's Online Archives 11121514 for summary of discussion of AD/CV enforcement at the December 2011 COAC meeting, where CBP officials said they had developed an action plan to, among other things, allow it to shift resources to give greater attention to AD/CV duty evasion, and said that new communications tools were being developed. See also ITT's Online Archives 11110927 for summary of earlier GAO report on the difficulty of collecting AD/CV duties on liquidated entries of merchandise that evaded AD/CV duties.