In an October 2019 report, Antidumping and Countervailing Duty Collection of Outstanding Claims, prepared for Congress by U.S. Customs and Border Protection (“CBP”), the agency explained that at the close of fiscal year 2019 there were 64,761 open bills for antidumping and countervailing duties, with a total amount outstanding of US$4.472 billion. These figures represented a 19 percent increase in the number of total open bills and a 28 percent increase in the total amounts owed since fiscal year 2017. A month later, the U.S. Government Accountability Office (“GAO”) released its own report, Antidumping and Countervailing Duties: Information on Actions by Commerce and CBP to Address Reported Weaknesses in Duty Collection Process, observing that between fiscal years 2001 and 2018, CBP had managed to collect a total of US$1.6 billion in retrospectively assessed antidumping and countervailing duties, while open and uncollected antidumping and countervailing duty bills over the same time period totaled approximately US$4.5 billion.
The deteriorating ability of CBP to collect antidumping and countervailing duties has long been an area of grave concern for Congress. To better understand the nature of the problem, Congress has consistently required CBP to produce reports regarding the agency’s collection efforts on an order-by-order basis. This reporting has demonstrated that the problems confronted by the agency originate from a relatively small number of antidumping and countervailing duty orders and that, for the vast majority of import entries, the duty assessment system works as designed.
At the same time, CBP’s reports establish that the small minority of problematic shipments were wreaking havoc on CBP’s collection efforts. As the GAO recently explained: (1) CBP successfully collected antidumping and countervailing duties on about 480,000 bills (compared to roughly 65,000 open bills), (2) a mere twenty importers accounted for over US$1.9 billion in the open bill amounts, and (3) open bills for amounts in excess of US$500,00, although accounting for less than 32 percent of the total number of uncollected bills, comprised roughly 82 percent of the total value of outstanding antidumping and countervailing duties.
When made public, CBP’s reports facilitated the trade community’s understanding of the specific risks of undercollection presented by individual antidumping and countervailing duty orders. Per CBP’s reporting, the vast majority of these trade remedies were not significantly impacted by a failure to collect duties. In fact, at the conclusion of fiscal year 2017, just six antidumping duty orders – Fresh Garlic from China; Wooden Bedroom Furniture from China; Preserved Mushrooms from China; Freshwater Crawfish Tail Meat from China; Honey from China; and Pure Magnesium from China – accounted for US$2.5 billion of the US$3.1 billion in uncollected antidumping and countervailing duties, or 81 percent of the total.
However, as uncollected antidumping and countervailing duties have grown substantially over the last two years, CBP and the Department of Homeland Security have elected to not publicly release CBP’s annual reports to Congress. The decision to not make these reports publicly available runs contrary to Congressional intent and substantially inhibits the trade community’s ability to monitor and evaluate CBP’s efforts to improve the collection of antidumping and countervailing duties.
Sixteen years ago, Congress instructed CBP to produce a report for the House and Senate Appropriations Committees to address multiple concerns, including the failure to collect assessed antidumping and countervailing duties. Specifically, at page 41 of the Conference Report accompanying the Department of Homeland Security Appropriations Act, 2005 (P.L. 108-334), H.R. 108-774 (Oct. 2004), the Conferees instructed:
The conferees direct CBP to submit a report to the House and Senate Committees on Appropriations by January 15, 2005, on the status of its implementation of recommendations by the U.S. Treasury Department’s Office of the Inspector General report on implementation of the Continued Dumping and Subsidy Offset Act (CDSOA). The report should address:… (4) the need to address CBP’s failure to collect millions of dollars in open (unpaid) duty bills and interest (including a determination of whether required posting of cash deposits rather than bonds would result in increased collections)…
The following year, Congress narrowed its focus to the difficulty CBP continued to confront in collecting antidumping and countervailing duties and at page 43 of the Conference Report accompanying the Department of Homeland Security Appropriations Act, 2006 (P.L. 109-90), H.R. 109-241 (Sept. 2005) ordered the agency to begin to report undercollections on an order-specific basis:
The conferees direct CBP to continue to work with the Department of Commerce, the Department of Treasury, the Office of the United States Trade Representative, and all other relevant agencies, to provide semiannual reports on its efforts to collect past due amounts and to increase current collections. Furthermore, by June 30, 2006, CBP is to provide the Committees on Appropriations with an update of its report submitted on July 7, 2005, describing interagency efforts to create a coordinated plan to increase antidumping and countervailing duty collections, particularly related to cases involving unfairly traded Asian imports. The report should break out the non-collected amounts for fiscal years 2004 and 2005, by order and claimant, along with a description of the specific reasons for the non-collection with respect to each order.
In 2006, Congress repeated its request for a report with a detailed breakdown of undercollections on an individual order basis and directed that such a report be provided annually. At page 128 of the Conference Report accompanying the Department of Homeland Security Appropriations Act, 2007 (P.L. 109-295), H.R. 109-699 (Sept. 2006), the Conferees instructed:
The conferees direct CBP to continue to work with the Departments of Commerce and Treasury, and the Office of the United States Trade Representative, and all other relevant agencies to increase collections and to provide an annual report within 30 days of each year’s distributions under the law summarizing CBP’s efforts to collect past due amounts and increase current collections, particularly with respect to cases involving unfairly-traded Asian imports. The conferees direct CBP to update that report, in particular, by breaking out the non-collected amounts for each of the fiscal years 2004, 2005, 2006, 2007, and each year thereafter, by order and claimant, along with a description of each of the specific reasons for the non-collection with respect to each order.
The next fiscal year, Congress again repeated its instruction to produce an annual report on undercollections, while asking CBP to provide more explanation of what the agency was doing to resolve the problem, as pages 32-33 of Senate Report 110-84 (June 2007) stated:
The Committee further directs CBP to update its January 2007 report to the Committee, and the 2007 annual report referenced above, by breaking out the non-collected amounts for each of the fiscal years 2004, 2005, 2006, and 2007, by order, country, and claimant, along with a description of each of the specific reasons for the non-collection with respect to each order… In that same report, CBP should explain, with particularity, what other enforcement actions it is taking to collect unpaid duties owed the U.S. Government.
By 2008, Congress tweaked its request to CBP for an annual report further, requiring the agency to explain with particularity its efforts to collect antidumping and countervailing duties on imports from China and to advise as to what might be done with respect to bonding requirements to improve collections going forward. Moreover, for the first time, after four years of requiring reports from CBP on undercollection of antidumping and countervailing duties, Congress explicitly and specifically required that this be a “public report” and at page 30 of Senate Report 110-396 (June 2008) provided:
The Committee directs CBP to continue to work with the Departments of Commerce and Treasury, and the Office of the United States Trade Representative (and all other relevant agencies) to increase collections, and provide a public report on an annual basis, within 30 days of each year’s distributions under the law. The report should summarize CBP’s efforts to collect past due amounts and increase current collections, particularly with respect to cases involving unfairly traded U.S. imports from China. The report shall provide the amount of uncollected duties for each antidumping and countervailing duty order, and indicate the amount of open, unpaid bills for each such order. In that report, the Secretary, in consultation with other relevant agencies, including the Secretaries of Treasury and Commerce, should also advise as to whether CBP can adjust its bonding requirements to further protect revenue without violating U.S. law or international obligations, and without imposing unreasonable costs upon importers.
Congress reiterated its requirement that this report be public repeatedly over the next four years including virtually verbatim directions to CBP at page 66 of the Conference Report accompanying the Department of Homeland Security Appropriations Act, 2010 (P.L. 111-83), H.R. 111-298 (Oct. 2009), at pages 36-37 of Senate Report 111-222 (July 2010), and at page 35 of Senate Report 112-169 (May 2012), in a section now titled Antidumping and Countervailing Duty Enforcement Reports.
In 2014, Congress again reiterated the requirement of an annual, public report at page 45 of Senate Report 113-198 (June 2014), referencing Senate Report 112-169 as shorthand for the level of detail required:
The Committee directs CBP to continue to work with the Departments of Justice and the Treasury (and all other relevant agencies) to increase collections, and provide a public report on an annual basis within 30 days of each year’s distributions under the law. The report should summarize CBP’s efforts to collect past due amounts and increase current collections, particularly with respect to cases involving unfairly traded United States imports from China. The report shall provide the same level of detail as required under this section in Senate Report 112–169.
The following year, Congress again instructed CBP to provide the same report, again referencing Senate Report 112-169. In addition, Congress specified that the report be posted on the agency’s website (page 41 of Senate Report 114-68 (June 2015)):
The Committee directs CBP to continue submitting the following reports required in Senate Report 112–169 accompanying Public Law 113–6, including the same level of detail prescribed in such report and during the timelines prescribed for each report: AD/CVD Actions and Compliance Initiatives, AD/CVD Liquidation Instructions, AD/CVD Collection of Outstanding Claims (consistent with Public Law 103–182), and AD/CVD Collection New Shipper Single Entry Bonds. A version of each report shall be posted on CBP’s Web site.
In 2016, Congress issued virtually the same instructions to CBP at page 42-43 of Senate Report 114-264 (May 2016):
The Committee directs CBP to continue submitting the reports on AD/CVD required in Senate Report 112–169 and the explanatory statement accompanying Public Law 113–6, including the same level of detail prescribed in such report and during the timelines prescribed for each report: AD/CVD Actions and Compliance Initiatives, AD/CVD Liquidation Instructions, AD/CVD Collection of Outstanding Claims (consistent with Public Law 103–182), and AD/CVD Collection New Shipper Single Entry Bonds. A version of each report shall be posted on CBP’s Web site.
Over the last two years, Congress continued to require CBP to issue these public reports, citing Senate Report 114-264. As stated at page 37 of Senate Report 115-283 (June 2018): “The Committee directs CBP to continue reporting on antidumping and countervailing duties, as required by Senate Report 114-264.” And, as stated at page 40 of Senate Report 116-125 (September 2019): “The Committee directs CBP to continue reporting on AD/CVD, as required in Senate Report 114-264 and as expanded in Senate Report 115-283.”
In total, Congress has, on nine different occasions, directed CBP to produce a public, annual report detailing undercollection of antidumping and countervailing duties on an order-by-order basis. The last four times, Congress has also specifically and explicitly instructed CBP to post a version of this report on the agency’s website.
Despite these instructions, CBP has not routinely published these reports on its website as required by Senate Report 114-264. CBP has only ever published and made available on its website a heavily redacted version of the fiscal year 2015 Antidumping and Countervailing Duty Enforcement Actions and Compliance Initiatives report.
CBP’s refusal to provide this information publicly as a routine matter makes little sense, particularly because the Department of Homeland Security began to make complete versions of CBP’s Antidumping and Countervailing Duty Enforcement Actions and Compliance Initiatives report available on its website beginning in 2015. These reports included tables reporting (1) the value of imports subject to antidumping and countervailing duty orders imported during the fiscal year by individual order, including the amount of antidumping and countervailing duties deposited at entry; (2) the liquidations, with interest, assessed by CBP, during the fiscal year by individual order; (3) the total number and amount of open bills for antidumping and countervailing duties by order and fiscal year going back to fiscal year 2001; (4) amounts held in clearing accounts for potential distribution under the Continued Dumping and Subsidy Offset Act (“CDSOA”) by order; and (5) amounts disbursed through the CDSOA program by order during the fiscal year. The Department of Homeland Security published and has made available these reports for fiscal year 2014, fiscal year 2015, fiscal year 2016, and fiscal year 2017. However, after publishing complete versions of these reports for four consecutive years, the Department of Homeland Security has, without explanation, not published or otherwise made available the Antidumping and Countervailing Duty Enforcement Actions and Compliance Initiatives reports for fiscal year 2018 and fiscal year 2019.
Without articulating a basis for the determination, CBP has taken the untenable and indefensible position that it is not required to release its annual Antidumping and Countervailing Duty Enforcement Actions and Compliance Initiatives to the public. The refusal to do so is in direct contravention to Congress’s longstanding and continuously re-affirmed direction to the agency that this annual report be public. Moreover, any assertion that the information in this report is not public is belied by the fact that for four straight years, the Department of Homeland Security published CBP’s Antidumping and Countervailing Duty Enforcement Actions and Compliance Initiatives. In the context of a reported US$1 billion increase in the total amount due on open bills for antidumping and countervailing duties over the two fiscal years since CBP’s report was last made public, the refusal to provide detailed information regarding the cause of this substantial increase in undercollection is particularly disconcerting.
Exercising oversight of CBP’s operations, Congress has repeatedly emphasized the importance of transparency regarding the agency’s struggles to collect antidumping and countervailing duties. CBP should not be permitted to unilaterally disregard Congress’s direction.