How to collect $613 million

Antidumping and countervailing duties are collected by governments to help offset certain overseas trade practices that clearly harm domestic industries.

Then why is it that U.S. Customs and Border Protection failed to collect more than $613 million in AD/CD from fiscal years 2001 through 2007?

The question was recently raised by the chairman and ranking member of the powerful Senate Finance Committee.

The noncollection of AD/CV duties means that the U.S. government has not fully remedied the unfair trade practices and bears a substantial loss of revenue,?said the Government Accountability Office in its report to the committee.

Antidumping duties are assessed on products that are exported to the United States at unfairly low prices. Countervailing duties are imposed on exported products that are subsidized by overseas governments.

The GAO found the uncollected AD/CV duties were concentrated among a few industries, products, countries of origin and importers. The agriculture/aquaculture industry represents 87 percent of the total uncollected AD/CV duties.

The agency also found that 84 percent of the total uncollected AD/CV duties are concentrated in four products from China:

   Crawfish tail meat ($315 million).

   Garlic ($75 million).

   Honey ($43 million).

   Mushrooms ($41 million).

Furthermore, four companies account for more than one-third of the total amount of uncollected AD/CV duties, and 20 companies account for 63 percent of the total, the GAO noted.

CBP officials told the GAO that most of the nearly $290 million AD/CV uncollected duties referred to its Office of Chief Counsel in the form of legal protests, will be written off. According to CBP officials, prospects for collecting these duties are slim, because many of the importers involved have disappeared, have no assets, or have declared bankruptcy,?the GAO found.

Problems with CBP's ability to collect AD/CV duties was first highlighted by the 2000 Continued Dumping and Subsidy Offset Act, which Congress later repealed under pressure from the World Trade Organization.

The GAO made several recommendations to Congress and the executive branch on how to correct the problems associated with AD/CV duty collection:

Congress should require the Commerce, Homeland Security and Treasury secretaries to conduct an analysis and report back to lawmakers on the relative advantages and disadvantages of prospective and retrospective AD/CV duty systems.

Congress should require CBP to publicly report on an annual basis all uncollected AD/CV duties.

Congress should consider providing Commerce with the authority to create, at its discretion, a minimum amount or value of exports from companies requesting a new shipper review Homeland Security should work with other agencies to re-examine current formulas for setting bond requirements.

Commerce should work with Homeland Security to identify ways to improve the clarity of Commerce's liquidation process.

Commerce's Import Administration should have sufficient human resources in its AD/CV duty operations offices to issue timely and clear liquidation instructions to CBP.

The departments of Commerce and Homeland Security generally agreed with our recommendations, the GAO said.

Source: American Shipper