CBP's Risk-Based STBs for New Importers Now Scheduled for March 2020, Though Hurdles Remain
CBP is hoping to begin its risk-based bonding program for new importers of merchandise subject to antidumping and countervailing duties in March 2020, but there still remain some thorny issues that need to be ironed out. The agency is still working on ACE enhancements, including identifiers and queries for new importers, said Lisa Gelsomino, of Avalon Risk Management, at the Dec. 4 meeting of the Commercial Customs Operations Advisory Committee (COAC).
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
CBP is also grappling with how to set up a program that “will withstand judicial scrutiny,” John Leonard, CBP executive director-trade policy and programs, said at the meeting. According to a CBP report posted ahead of the COAC meeting, “the Court of International Trade (CIT) has been clear in past rulings that adjustments to bond amounts must be based on an actual assessment of the importer's likelihood/ability to pay and not just raised because there is the mere possibility that Antidumping/Countervailing Duty (AD/CVD) deposit rates could change.”
CBP says it will base single transaction bond (STB) amounts under the program on the total entry or line value, multiplied by the “total of any risk factor multipliers.” The agency “continues to refine risk factors and associated multipliers,” and will announce them in a Federal Register notice announcing the new risk-based bonding framework, said the report, which is dated Nov. 14.
Among the issues CBP is working to address in ACE are flagging for new importers that would be subject to risk-based bonding for AD/CVD shipments, as well as rejects for entries from importers that require an STB under the program but don’t have one. CBP is also trying to figure out how to base STB amounts on only the value of entry lines subject to AD/CV duties, rather than the total value of the goods at the time of cargo release. “CBP understands the concerns from the trade and are reviewing the policy. However, CBP is limited to calculating the STB at the time of Cargo Release and the data available at that time,” according to another document posted ahead of the COAC by industry members. “CBP continues to implement ACE enhancement to support line level validations,” CBP’s report said.
The STB requirements will apply to any “importer who is importing merchandise subject to AD/CVD that has not yet had a type 03 or 07 AD/CVD entry summary liquidate at the time the cargo release entry is filed with CBP,” with Customs-Trade Partnership Against Terrorism (CTPAT) Tier II and III members exempt, the report said. The program was mandated by Section 115 of the Trade Facilitation and Trade Enforcement Act of 2015, and also addresses deficiencies in AD/CVD collections identified in a Government Accountability Office report (see 1911080055).
CBP had been set to deploy phase I of the program in September (see 1908160030), before the COAC voiced concerns about the rollout and recommended a delay (see 1908220028). In phase I, CBP will require single transaction bonds from new importers on type 03 and 07 entries. Phase II, currently slated for fiscal year 2021, will apply risk-based formulas to continuous bonds “to accommodate all entry types, and Priority Trade Issues (PTIs),” the CBP report said.
In phase II, which is the “long-term solution” for the risk-based bonding program, “CBP will continuously refine and update risk-based models releasing sequential versions as additional datasets are loaded,” the CBP report said. “Prior to implementation, CBP will develop and publish guidance for Trade stakeholders and CBP personnel to include, but not limited to, a Federal Register Notice,” it said. “Sureties and the broader trade community will continue to play an important role throughout this process and CBP is grateful for their continued collaboration.”