The International Business Transactions Blog

Customs Penalties for Evading Antidumping & Countervailing Duties

By BethEl Nager, Law Student Editor
& Aaron Fellmeth, Faculty Co-Editor

In 2016, Congress adopted the Enforce and Protect Act of 2015 (EAPA) as Title IV of the Trade Facilitation and Trade Enforcement Act of 2015, Pub. L. 114-125, 130 Stat. 122. EAPA created a Trade Remedy Law Enforcement Division within the U.S. Customs and Border Protection (CBP) to investigate and penalize importers who evade anti-dumping duties (ADDs) or countervailing duties (CVDs) imposed by the U.S. International Trade Commission and Department of Commerce on imports. ADDs and CVDs may be levied on import shipments deemed dumped on the U.S. market or unfairly subsidized by a foreign government. Importers are responsible for determining whether their goods are subject to U.S. ADDs or CVDs and for paying the additional duties upon importation.

Under the EAPA, CBP is authorized to initiate a public administrative proceeding against importers that have allegedly failed to pay ADDs and CVDs and to penalize them. In addition, soon after beginning its investigation, CBP may impose “interim measures” obligating importers to pay cash deposits on all future imports while the proceeding is pending, in order to cover the cost of any ADDs or CVDs for which the importer is found liable. CBP may only impose prospective ADDs or CVDs on importers that make a material and false statement to CBP regarding ADDs or CVDs owed to the U.S. Treasury in relation to a shipment of imported goods. However, the EAPA does not require that the false statement be made intentionally or knowingly.

Since 2016, the EAPA has launched well over one hundred investigations into a variety of industries, including wooden furniture, glycine, diamond sawblades, and wire hangers. The first EAPA determination occurred on August 14, 2017. CBP’s investigation found that an importer of wire clothes hangers had unlawfully failed to pay an ADD on imports from China. The hangers had been transshipped through Thailand, a country not subject to any ADD on wire hanger imports. By misrepresenting the country of origin of the hangers as Thailand, the importer had avoided paying the ADD on Chinese hanger imports.

After the adoption of the EAPA, CBP has initiated an annually-increasing number of trade remedies investigations and imposed ever more cash deposit requirements on importers. In 2020 alone, CBP conducted 19 investigations of importers under EAPA. Not all investigations have resulted in prospective cash deposit requirements, but in less than five years, CBP claims that it has identified more than $600 million in evaded ADDs and CVDs.