US Dept of Commerce issues report on antidumping and countervailing duty collection

In accordance with the federal 2010 Consolidated Appropriations Act, the International Trade Division of the US Department of Commerce (Commerce) recently issued a report to Congress entitled “Relative Advantages and Disadvantages of Retrospective and Prospective Antidumping and Countervailing Duty Collection Systems.”   While the report contains no recommendations about which collection system is better for the US, it seems to emphasize improvements that could be made to the existing retrospective system rather than administering a prospective duty collection system.

The report, which addresses public comments submitted by the trade, notes that the United States is the only major user of AD/CVD trade remedies that implements a retrospective system of duty assessment.  Then, the report compares retrospective and prospective AD/CVD collection systems in the following areas:

  • Remedying injurious dumping or subsidized exports
  • Minimizing uncollected duties
  • Reducing incentives and opportunities for importers to evade antidumping and countervailing duties
  • Effectively targeting high-risk importers
  • Addressing the impact of retrospective rate increases on US importers and their employees
  • Minimizing administrative burden

Although the report does not offer any specific recommendations as to whether the US should covert to a prospective AD/CVD collection system, it appears that it has implicitly answered that question – in the negative.

First, it highlights some compelling facts:

  • 90 % of all uncollected duties are associated with imports from China
  • 84% of all uncollected duties are associated with four Chinese products – crawfish, garlic, honey and mushrooms.
  • Uncollected duties are heavily concentrated among certain importers
    • 4 importers account for more than 33% of uncollected duties
    • 17 importers account for 63% of the uncollected duties. The remaining 37% is spread across 500 importers
    • New shippers are responsible for a significant portion of uncollected duties

The report then emphasizes public comments that offered solutions in the context of the existing retrospective collection system:

  • Focus monitoring, enforcement and collection efforts on high-risk imports and importers
  • Suspend new shipper bonding privileges and establish minimum export requirements for new shipper reviews
  • Require more realistic bonds from importers either by targeting high-risk importers based on financial risk of repayment or by increasing bonds for all importers of merchandise subject to AD/CVD duties
  • Continue partnership between Commerce and Department of Homeland Security in coordinating enforcement against violators, particularly with respect to Priority Trade Issues

The full report is available here.

Copies of all comments and a transcript of the public hearing are available here.