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CBP Establishes New Procedures for Evasion Investigations

CBP has issued new rules regarding duty evasion investigations pertaining to shipments of export cargo and import cargo in international trade.

CBP Establishes New Procedures for Evasion Investigations

On August 22, 2016, U.S. Customs and Border Protection (CBP) published an interim final rule (IFR) establishing procedures for the investigation of antidumping or countervailing duty evasion allegations submitted by interested parties or other federal agencies.

The IFR, and the congressional actions that required CBP to adopt it, are clear signals to the trade community of the government’s increased focus on AD/CVD enforcement. The IFR is effective immediately and CBP is accepting comments through October 21, 2016.

With the IFR, CBP has created a new framework to investigate allegations of duty evasion. Effective immediately, U.S. companies that believe their competitors are engaged in evasion could file these allegations and companies that import goods potentially subject to antidumping or countervailing duty orders could find themselves the target of these investigations.

Among the IFR provisions:

Contents of allegations. The rule identifies the minimum requirements for an allegation of evasion: (i) the identity of the party making the allegation, (ii) how that party qualifies as an interested party, (iii) the identity of the importer against whom the allegation is brought, (iv) a description of the merchandise, (v) the applicable AD/CVD orders, and (vi) the information supporting the allegation.

Treatment of confidential information. The rule provides a mechanism for parties to submit confidential business information along with public versions of the same.

Referrals to U.S. Department of Commerce. The rule requires referral to Commerce in those instances where CBP cannot determine whether the merchandise at issue is within the scope of the applicable AD/CVD order.

Briefing by the parties. The rule permits the filing of briefs and rebuttal briefs before the evasion determination.

Notifications to the parties. The rule provides for notification to all parties of key milestones in the proceeding, including initiation of an investigation; imposition of interim measures; consolidation of allegations; an extension of the final deadline for determination or referral to Commerce; and the determination of evasion. The rule further provides that, if CBP determines not to initiate an investigation, the agency must so inform the party who submitted the allegation within five business days.

Administrative review process. The rule provides for briefing with clear deadlines in the administrative review process, which is an internal CBP review of the final determination. The rule provides that the party seeking review of the evasion determination must incorporate their initial brief into their request for review, which is due within 30 business days after the evasion determination is issued. Briefs in response are due 10 business days later.

The IFR, and the congressional actions that required CBP to adopt it, are clear signals to the trade community of the government’s increased focus on AD/CVD enforcement. Particularly when viewed in combination with a GAO report released on August 15, 2016, which estimated that, as of mid-May 2015, $2.3 billion in AD/CVD duties owed to the US government were never collected, all indications are that Congress will continue to hold CBP accountable for investigating and acting on allegations of duty evasion and that CBP will continue to focus on this as one of its priority trade issues.

Yohai Baisburd and Mark Lunn are partners in Dentons’ Public Policy and Regulation practice; Daniel Morris is a senior managing associate in the Firm’s Litigation and Dispute Resolution practice. For more information about Dentons, please visit