Customs Update: Antidumping Complications (As published in the Journal of Commerce Online January  23, 2006) Whether as the result of the General Accounting Office audit which severely criticized the manner in which Customs attempts to collect antidumping duties, or the equally severe comments coming from domestic industry and Congress, Customs has substantially changed the way in which antidumping cases are processed. Much has been written about the change in bond requirements regarding aquaculture products. In November 2005, Customs published a guidance document regarding Certificates of Reimbursement, and recently an International Trade Administration (ITA) change in policy for resellers came to light which many would say was less than well-publicized. In its Guidance for Certificates of Reimbursement dated Nov. 18, 2005, Customs made clear that for entries made prior to Feb. 5, 1980, the regulations required the importer to file his reimbursement statement before Customs can liquidate the entry. After April 27, 1989, the importer is given until prior to liquidation. For the period in between, the filing had to be made within 30 days of the earlier of the publication of the order or any administrative review, or importation into a new Customs district. With the 1989 revision, importers have until the liquidation bulletin is posted at the customhouse (yes, that antiquated legal definition still applies despite the advent of automation). In 1992, the Commerce Department implemented a change which allows the importer to file the reimbursement statement prior to the liquidation cycle for the relevant review period. Failure to comply leads to the presumption of reimbursement and so, upon liquidation, twice the antidumping margin may be imposed. In its guidance document, Customs makes clear the burden to file is on the importer, and so on the customs broker. Customs is no longer free to reject an entry due to the lack of a reimbursement certificate. If one is not present at liquidation, twice the applicable antidumping duty is to be imposed. However, before so doing, Customs will issue a Notice of Action taken. If the importer acknowledges reimbursement, an amount equal to that reimbursement is to be assessed, but not more than twice the antidumping duties. Customs also insists a competent officer of the importer sign the certificate. Commerce has interpreted its regulations to eliminate the customs broker as an authorized signatory. That said, what is the title of the person who signs your reimbursement certificates? If he or she is not a corporate officer, how are you establishing the authority of that person to sign on behalf of the corporation? When your customs broker files the reimbursement certificate, how does he or she make sure to have it receipted? Is that receipt provided to you? Because Commerce does not require an original, but will accept a fax or photocopy, Customs is barred from requiring the original. However, unless you are using a blanket certificate, best practice would suggest the original should be filed at time of entry. If you are using a blanket certificate, it would be best to file the original either with the first or the last entry. An appropriate notation about the entry against which the original is filed is also advisable when actually filing the original. Also, Customs has stated that any protest for entries filed after the 1989 changes in which the importer asserts the reimbursement certificate was filed after liquidation should be denied. In the case of counvervailing duty cases, Customs is not mandated to require a reimbursement certificate, so individual instructions will be issued for this category of cases. Complicating matters even further, as noted above, ITA has changed its policy regarding resellers. Traditional ITA policy was to apply the antidumping rate for the producer even in cases where a reseller was the party who sold the goods to the U.S. buyer. Now, ITA allows the importer to deposit the producer's antidumping duty rate at time of entry. However, if at the time of liquidation there is no reseller's rate, then the All Others rate applies. The sole exception is where the producer has provided evidence to ITA that it knew or should have known its goods were destined for the U.S. If the producer has its own rate, it is required to report all sales to the U.S. to the ITA during an annual review. If the producer fails to report the specific sale to your reseller, ITA's presumption is the producer neither knew nor should have known that shipment would be sold to the U.S. and so the producer's rate no longer applies. This change in policy has led to rather huge increases at time of liquidation to some fairly unsuspecting importers. If you import goods from a reseller, have you pushed him to get his own antidumping rate? If not, you are at serious risk for a rather nasty surprise! And then there is the issue of the bond amounts required to import aquaculture subject to antidumping duties. As most importers know by now, to qualify to import this category of goods, a bond must be posted in the approximate amount of the dumping duties due in the 12-month period covered by the bond, plus $50,000 for the "regular" Customs bond. What has been so problematic for importers is the requirement of the sureties to have those bonds fully collateralized. Tying the funds up was bad enough, but then if the original bond becomes insufficient a larger bond must be posted, but the collateral from the first bond cannot be made available to collateralize the replacement bond because the first bond remains at risk until the underlying entries are liquidated. So, if the first bond was for $500,000 and the second for $1 million for that one calendar year, the importer has collateral of $1,5 million pledged to the surety. Now comes a lawsuit filed by the National Fisheries Institute on behalf of several of its members. In that lawsuit which was just filed in late December 2005, NFI argues: 1) The new bond policy violates 19 U.S.C. § 1623(a) which limits Customs' ability to require a bond in cases where a bond or security is not otherwise required by law; 2) Customs' bond policy violates 5 U.S.C. § 706(2) as "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law" and "in excess of statutory jurisdiction, authority, or limitations, or short of statutory right;" and 3) There is no rational reason why this new bond requirement applies only to one segment of the importing community, importers of aquaculture products. As this case makes its way through the process, one more serious question has arisen. For many foreign suppliers of shrimp (the primary product subject to this new bond policy), in order to continue to do business in the U.S., they have qualified as a foreign importer of record and import on a Delivered Duty Paid (DDP) term of sale. As such, they file reimbursement certificates for their entries stating they are not being reimbursed any antidumping duties. But we are beginning to hear that some within Customs conclude that since the antidumping duty is factored into the cost at which these companies resell to their American buyers, perhaps reimbursement really does take place despite the certificates to the contrary. One is left to wonder, how will this issue further complicate the importation of goods subject to antidumping duties?