Protecting Our Borders, Protecting Our Industry
Remarks as prepared for May 2, 2016
Thank you, Tom. It’s great to be in Salt Lake City. I’d like to thank Tom and Bob Weidner, President/CEO of MSCI (Metals Service Center Institute), for inviting me to be here today. Tom and I met in January, and my Executive Assistant Commissioner for Trade, Brenda Smith, addressed AISI’s Board in February – and a lot has happened since then.
I’m here today to discuss CBP’s role in “Protecting Our Borders, Protecting Our Industry.” That really speaks to the duality of CBP’s complex mission, which is facilitating lawful trade and travel while ensuring the safety and security of our borders and the global supply chain.
Annually, CBP manages more than 300,000 active importers-of-record, accounting for 33 million commercial transactions. In 2015, CBP processed more $2.4 trillion of imports, and more than $1.5 trillion worth of U.S. exported goods. We also collected approximately $46 billion in duties, taxes, and other fees –the highest amount collected in the past five years.
Critical to that effort is enforcing U.S. trade laws, and our enforcement posture has three prongs: detecting high-risk activity; deterring non-compliance; and disrupting fraudulent behavior.
To effectively carry out that mission, CBP coordinates with U.S. industry, 47 interagency partners, and foreign governments. This collaboration enables us to detect anomalies, trends, and violations in the global supply chain, target high-risk trade, and promote compliance with U.S. laws and regulations.
CBP also plays a significant role in enforcing U.S. Free Trade Agreement (FTA) commitments. CBP has a role in the enforcing provisions of the existing FTAs with 20 countries, and been closely involved in negotiating the Trans-Pacific Partnership Agreement with 11 other countries.
CBP is on the front lines of our nation’s economic security, and I know the impact our policies and actions can have on your industry. Our enforcement activities are more important than ever, given the current marketplace pressures so many domestic industries face.
Global overcapacity in steel and aluminum production is generating significant problems for economies worldwide—but particularly here at home. I have heard many of you and I understand the challenges facing the industry and the labor force.
President Obama and his entire Administration share your concerns about unfair, unequal competition from foreign imports. CBP is committed to enforcing U.S. laws to ensure U.S. manufacturers and workers compete on a level playing field.
As you all know, CBP’s enforcement of Antidumping /Countervailing Duty (AD/CVD) laws is critical.
CBP has a core statutory responsibility to detect and deter the circumvention of AD/CVD laws and collect all revenue owed to the U.S. government generated by these imports.
The scope and importance of this mission are immense, which is why I am proud to announce the creation of a Trade Enforcement Task Force within CBP’s Office of Trade to focus on AD/CVD evasion, along with other core priorities like interdiction of products manufactured using forced, convict, or child labor.
This task force strengthens CBP's ability to detect high-risk activity, target illicit trade networks, and focus expertise from throughout CBP and our interagency partners to safeguard a fair and competitive trade environment. The task force will allow us to more aggressively enforce the approximately 270 AD/CVD orders on steel, alloy, and other metal products—150 on steel products alone.
CBP’s AD/CVD targeting and enforcement activities take place at every stage in the import process. CBP personnel at our ports are continuously reviewing import information to detect AD/CVD evasion and noncompliance, deter future evasion, and collect on duties owed.
CBP, in collaboration with ICE/HSI, has had increasing success in identifying, penalizing, and disrupting distribution channels of imported goods that seek to evade AD/CVD.
Let’s look at some recent examples for steel products:
In 2015, CBP, in coordination with ICE/HSI, seized over $900,000 worth of steel products and assessed $46 million in penalties for violations of AD/CVD orders on steel products. CBP also conducted more than 7,200 entry summary reviews of steel imports for AD/CVD issues, and identified violations with a value of over $970,000. And just this past January, examinations by CBP port personnel resulted in the identification of more than $9 million in AD/CVD violations on steel plate imports.
CBP is constantly enhancing AD/CVD detection and enforcement protocols, improving our targeting and analysis, and employing all available authorities to disrupt increasingly complex evasion. Since 2013, CBP has broadened the use of single transaction bonds to ensure additional protection when CBP has reasonable evidence that a risk of revenue loss exists.
Furthermore, in 2015, as part of our strategy to resolve AD/CVD debts, CBP created an AD/CVD Collections team within our Office of Administration, which increases CBP’s technical expertise around AD/CVD processes; enables earlier identification of importers unwilling or unable to pay outstanding bills; and better integrates processes to anticipate AD/CVD debts, rather than simply react to those debts after they are formally established.
CBP is also increasing reviews of Chinese steel imports, and using statistical modeling to better identify and predict high risk steel shipments.
CBP has also implemented “live entry” on certain shipments of steel plate from China, which requires that all entry documents and duties be provided before CBP releases cargo into U.S. commerce.
We are examining the effectiveness of this approach, and may expand the “live entry” requirement to other high-risk steel imports. As we implement these measures within CBP, we continue to work with all of you to prepare to enforce forthcoming AD/CVD orders on steel products that will result from the more than 40 AD/CVD investigations filed by the U.S. steel industry with Commerce and the U.S. International Trade Commission.
The Trade Facilitation and Trade Enforcement Act, also known as the Customs Authorization, was signed by President Obama in February. This law underscores CBP’s commitment to effectively enforcing U.S. trade laws – including AD/CVD evasion, Intellectual Property Rights (IPR) protection, and imports of forced labor-derived goods.
In addition to authorizing CBP for the first time since the agency’s creation in 2003, the law provides an array of new enforcement tools and reporting mechanisms to bolster our efforts.
First, it creates a new Trade Remedy division within our Office of International Trade. Second, it mandates timelines for finalizing determinations of evasion, and makes these determinations reviewable by the Court of International Trade. Thirds, it requires CBP to share enforcement information with “interested parties” who submit allegations of evasion.
Our partnership with industry has been critical to combating AD/CVD evasion, and we hope that you continue to submit information and intelligence via CBP’s eAllegations system. I recognize the tremendous amount of time and investment that you put into building these allegations, and it is my pledge to increase CBP’s transparency and accountability around how we pursue these cases.
CBP is also transforming how we operate, lowering the cost of doing business, removing barriers to facilitation, and leveling the playing field for U.S. businesses.
One of CBP’s most important transformation initiatives is our creation of the 10 Centers of Excellence and Expertise.
These remotely-managed Centers align CBP with modern business practices, focusing on industry-specific issues, and provide tailored support to unique trading environments.
CBP’s Base Metal Center became fully operational in March.
This Center, based in Chicago but supported by CBP employees all over the country, is sharpening our focus on AD/CVD evasion on steel products, as well as providing more consistency and reliability for metals importers.
The Centers are also valuable tools for enforcement, as they are able to develop greater expertise in particular industries and commodities.
CBP industry experts at the Base Metals Center are actively enforcing those 270 AD/CVD orders on metal products, and are working closely with industry to understand trade risks and target evasion to ensure a level playing field for U.S. industry.
CBP, AISI and the U.S. metals industry must continue to work together.
We count on you and your member companies to provide key information and training for our import specialists so we can be as effective as possible in our enforcement.
As we focus our enforcement resources, CBP needs your input to understand the high-risk areas to target, and how to prioritize our limited enforcement resources.
CBP works closely with our steel industry partners to educate both CBP personnel and steel industry members through seminars that explain how AD/CVD enforcement can best be implemented in the current trade environment.
In 2015, CBP, in partnership with the U.S. steel industry, conducted five AD/CVD seminars for CBP personnel and customs brokers in California, Georgia, Illinois, New York, and Texas. In 2016, CBP will conduct additional seminars in Philadelphia; Long Beach; and Detroit.
And partnerships with foreign governments are becoming increasingly important.
CBP is planning joint steel enforcement operations with the Canadian Border Services Agency (CBSA), and we’ve reached out to Mexican Customs to discuss similar options.
CBP is committed to working with you to better enforce our trade laws.
We are committed to exploring new ways to improve our trade intelligence, detect and resolve unfair or unlawful trade practices, and develop solutions to facilitate legitimate trade and protect the U.S. economy.
Thank you, and now I’m happy to answer any questions.