CUSTOMS ENFORCEMENT PROGRAMS ON THE HORIZON
A number of importers have received compliance letters from Customs. These letters identify a number of Customs Informed Compliance Publications, and remind importers of their obligation to exercise reasonable care in preparing and filing their customs entries.
These notices are intended to encourage importers to review their import procedures and entry declarations to achieve higher levels of compliance. At the same time these letters will likely be used against importers to increase potential penalty claims if Customs identifies any violations on their own. In sending these letters Customs is encouraging importers to conduct internal compliance audits and file prior disclosures to minimize penalty exposure.
In the Trade Facilitation and Trade Enforcement Act of 2015, Customs received a mandate from Congress to increase trade enforcement and the prosecution of child and forced labor violations. Each of these new provisions contemplates that competitors will provide information to Customs about alleged violations for which investigations will be launched. In addition, these new programs permit Customs to initiate their own investigations without input from the trade. Customs must report to Congress on these issues so these allegations will not be ignored and will be dealt with expeditiously. Customs has broad powers which can be used to impact importations while investigations are continuing.
In the labor area, Customs has begun to compile a list of foreign companies believed to use child or forced labor; additional names will be added to this list as new allegations are received and found to be valid. In the trade area, violations of ADD/CVD orders could occur for a number of reasons. For example, false country of origin claims, false product descriptions, misidentification of the actual producer or exporter, etc. could impact the necessity to pay antidumping duties or countervailing duties entirely or at the appropriate deposit rate. If an investigation is initiated, companies will be expected to send large amounts of information to Customs in a short amount of time. All the while, the threat of cargo holds and potential penalties will be hanging in the balance. As a result, Customs compliance audits and vendor audit programs should be created to mitigate the potential exposure that could be inflicted should one of these investigations be commenced.
If you have any questions please feel free to contact Robert B. Silverman.