Enforce and Protect Act (EAPA) Now In Effect

EAPA was passed in February 2016 and has been in effect for over a year. It establishes formal procedures for submitting and investigating alleged evasion of antidumping (ADD) or countervailing (CVD) duties by U.S. importers.  Several of our clients have been subject of these investigations.  I will outline the system lightly below.

Investigations may be begun on Customs’ own initiative or after receipt of a complaint making a reasonable suggestion of evasion, in which case only 15 business days are allowed before initiation of the case. Three hundred days are allowed for conclusion.

CBP may take interim measures, potentially punitive, during the investigation if there is a “reasonable suspicion” that the importer entered covered merchandise into the Customs territory of the United States through evasion, which could be via any of the following methods or others:

  • transshipping or misdeclaring the country of origin;
  • misclassifying a product – even unknowingly;
  • misidentifying the manufacturer, even in the correct country;
  • undervaluing or changing the marks on goods.

Suspicion

If CBP decides that there is a reasonable suspicion of evasion, then:

(1) For entries that remain unliquidated, CBP will:

(i) Suspend the liquidation of each unliquidated entry of such covered merchandise that entered on or after the date of the initiation of the investigation;

(ii) Extend the period for liquidating each unliquidated entry of such covered merchandise that entered before the date of the initiation of the investigation; and

(iii) Take such additional measures as CBP determines necessary to protect the revenue of the United States, including requiring a single transaction bond or additional security or the posting of a cash deposit with respect to such covered merchandise.

(2) For entries that are liquidated, CBP may initiate or continue any appropriate measures separate from this proceeding.

Evasion

If CBP makes an affirmative determination of evasion, CBP will:

(1) Suspend the liquidation of unliquidated entries of the covered merchandise that is subject to the determination;

(2) extend the period for liquidating the unliquidated entries of covered merchandise that entered before the initiation of the investigation;

(3) when necessary, notify Commerce of the determination and request that Commerce determine the appropriate duty rates for such covered merchandise;

(4) require importers of covered merchandise to post cash deposits and assess duties on the covered merchandise; and/or

(5) take such additional enforcement measures as CBP deems appropriate, including (but not limited to) modifying CBP’s procedures for identifying future evasion, reliquidating entries as provided by law, and referring the matter to ICE for a possible civil or criminal investigation.

If Customs’ EAPA decision is unsatisfactory to either the complainant or alleged evader, a de novo administrative review can be requested within 30 days of the decision.  CBP then has 60 business days to review and issue a final administrative determination.  If that review is still “unsatisfactory” to one of the interestd parties may, within 30 days of the final determination, request judicial review by the U.S. Court of International Trade (CIT), which requires the party bringing this action to use attorneys with special admission to that court, such as ourselves.

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