Risky Business
United States Customs and Border Protection, (CBP), has begun the process for reporting Trade statisticsFY 2021. As we have already stated, there is a clear trend towards increased administrative investigation, enforcement, and assessment activity. This dynamic has, not surprisingly spilled over into judicial space insofar that it is the primary driver for a noticeable uptick in litigation at The U.S. Court of International Trade.
Despite the pandemic-related dip trade volume in 2020Over the past five years, a variety of factors have been combined to produce significant percentage changes across almost every reported investigation and enforcement metric. These factors include:
- The record-breaking and overarching expansion of U.S. Imports (which, in turn, have played a major role in the 2021 trade deficit at an all-time record$859B
- The broad scope of CBP’s enforcement responsibilities (CBP now enforces over 500 laws and regulations on behalf of approximately 50 partner government agencies (PGAs)).
- The ongoing improvement of CBP’s big data-powered interagency information sharing, risk identification, and targeting capabilities.
- The continuation and expansion of certain Trump-era policies or measures, paired, as they have been.
- The implementation of policies based upon long-established laws (e.g., those involving) is possible. Forcible labor).
- Sharpening of techniques in relation to newly deployed enforcement tools (for examples, those made available under Section TFTEA’s Enforce and Protect Act).
- Congress has repeatedly placed pressure on CBP to improve its revenue protection record.
The impact of these factors on CBP’s current trade investigation, enforcement, and assessment activities can, on an issue-by-issue basis, be observed in the following table:
Sources: U.S. Customs and Border Protection. U.S. International Trade Commission, and Administrative Office of U.S. Courts
These statistics have a clear implication for U.S. importers. U.S. Importers must be more careful than ever regarding their import policies and practices to avoid becoming the subject or enforcement action or assessment.
The Import Compliance Triad
Three basic factors determine the extent to which an importer can comply with U.S. import laws. The key elements of the first two considerations – i.e., establishing a Strong transactional framework(Based on direct and substantiated information of upstream suppliers/sources) Demonstrating supply chain security – have been discussed in prior blog posts. The third consideration – something that should a part of be every U.S. importer’s compliance triad – involves the development and maintenance of a strong regime of internal compliance controls. These are the main internal actions and measures included in such a system.
- Articulating and posting written procedures and policies for import compliance;
- Training on import compliance for the relevant employees
- In connection with the realization Core reasonable care(classification, valuation, country of origin/marking). Priority trade issue (IPR, forced labor, quota, trade remedies, economic sanctions, PGA requirements, etc.) screens; and
- Monitoring and assessing compliance on an ongoing basis.
Let’s conclude. today’s customs and trade environment is characterized by increased levels of enforcement risk. Based on both the actions of the current administration as well as the zeitgeist at Capitol Hill, it seems unlikely that this fundamental characterization will change in any near future. However, this does not mean that U.S. importers cannot chart a course to avoid this trend. In fact, the investigation, enforcement, and assessment risks that have come to define the contemporary trade environment can – in the tradition of “sometimes the best offense is a good defense” – be effectively managed by embracing the triad of import compliance strategies laid out above.
