Trade Attorneys Recommend Careful Scrutiny of All Correspondence With CBP, Even Protests
RANCHO MIRAGE, Calif. -- As CBP ramps up trade enforcement, companies must not only strive to have their supporting documents in order, they also must scrutinize CBP's enforcement actions to ensure the agency is interpreting matters correctly, trade attorneys said at last week's Western Cargo Conference (WESCCON).
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"I think we're all seeing the same thing, which is, at every turn, Customs is trying to figure out a way to collect money. A lot of times, surprise, surprise, they're not doing it correctly," trade attorney Su Ross said. She mentioned an instance where a client had received a proposed notice of action related to an antidumping duty case, and she worked with the client to provide documentation challenging the duty increase, which was worth millions.
One of the challenges facing the trade is that the communication sent out by CBP, such as the Frequently Asked Questions, may not provide enough context, so importers and customs brokers must look at the totality of government communications, which include the executive orders themselves, according to trade attorney Jay Acayan.
The government shutdown is exacerbating the situation because the information on the CBP website has the potential to be obsolete or not updated, Acayan said.
"The only consistent thing I can say of all the [Section] 232 guidance that I've read is that it is clearly in English. ... The words are technically correct, but you're missing steps," Acayan said.
One instance where this occurs is information on paying duties on the steel content of the derivative article, according to Acayan. Importers need to be aware that the full instruction should be that the duty applies to articles classifiable in subsection (n) to Annex I of Executive Order 10896, as well as goods classifiable in subsections (j), (l) and (m) of Chapter 73.
"I know it's a mouthful, but the thing to take away from this is that, you have to go back to the original EO and look at subsection (n)," Acayan said.
Other instances where there might not be enough context provided are when Section 232 duties are applied to a steel derivative when it is melted and poured in the U.S. and whether products containing iron are subject to Section 232 duties.
The flurry of trade activity is raising numerous questions that importers and customs brokers are grappling with, attorneys said, including how to value steel or aluminum content, especially when steel or aluminum products may also have copper, zinc or iron as part of their assembly. This has led to more CF-28 forms being sent out, trade attorneys said anecdotally.
One question raised by the panel is whether AI is helping CBP to generate some of the entry rejections. Regardless of whether that's the case, customs brokers, importers and their attorneys must respond to the rejections swiftly but also not carelessly.
"I encourage you, when you get a rejection notice, to act on it fast. Be very careful," trade attorney Taylor Pillsbury said. Customs may advise companies to use another type of entry, which may result in a higher penalty, but attorneys should try to receive written approval from their clients before accepting any changes, he said.
Another challenge is that those with low liability in the supply chain may be the ones who are undervaluing the product, Pillsbury later said.