Customs Law Advisory - US Customs Changes Bond Rules for AD/CVD Importers and Improves Guidance on NAFTA Certificates of Origin

US  Customs Changes Bond Rules for AD/CVD Importers and Improves Guidance on NAFTA Certificates of Origin
Continuous Bond  Rules for AD/CVD Importers. As described in our Customs Advisory dated February 28, 2005 (“Customs Increases Attention to Bond Compliance for Importers”), US Customs and Border Protection (“Customs”) has been tightening enforcement on calculating the amount of the entry bond that all importers must carry.  This includes additional requirements that significantly increase the continuous bond amount, and consequently the price of those bonds, for importers of certain merchandise subject to antidumping (“AD”) or countervailing duty (“CVD”) orders.  Recently, Customs further clarified its bond rules for this AD/CVD merchandise.  The clarification establishes procedures by which Customs will designate special categories and covered cases subject to the additional bonding requirements.  The clarification also describes how a challenge may be brought against the bond amount that Customs determines should apply to an importer. Currently, these new bonding rules apply only to importers of shrimp from certain countries subject to AD orders.  However, commentary in the clarification suggests that the additional bonding requirements soon may be applied to other AD/CVD cases, especially garlic and crawfish. The bond clarification should be reviewed by any company that produces or imports merchandise subject to an AD or CVD order and currently it can be found here.

NAFTA Certificates of Origin
Customs has issued a revised version of the directive that contains instructions for use of the certificate of origin (“c/o”) necessary to claim preferential tariff rates under NAFTA.   The revised directive begins by noting that the NAFTA c/o is the basic supporting document necessary for any importer who claims a NAFTA preferential duty rate.  The producer that signs the c/o is, in effect, affirming that it has closely reviewed the conditions necessary for their goods to qualify for a NAFTA duty rate.  A c/o must exist to cover each shipment on which NAFTA treatment is claimed (“blanket” certificates may be used).  The c/o need not accompany the shipment but must be available if Customs requests it from the importer.  These NAFTA requirements are not new, but the revised directive is more detailed and much clearer on these points.  The revised directive also explains the steps that local port officials are to take in reviewing a NAFTA c/o and accepting or denying a claim for preferential duty treatment.  In addition, the revised directive details the responsibilities of a party that discovers that a c/o they have prepared or used may contain inaccurate information.  Lastly, the revised directive contains entirely new descriptions of the penalties that may apply for false statements in a c/o or for failure to keep the records that support the c/o which may suggest some additional enforcement attention could be on the way from Customs in this area. The revised directive should be reviewed by any company that prepares or uses a NAFTA c/o and currently it can be found here.

If you have any questions on import bonds, AD/CVD entries or NAFTA preferential duty treatment, please contact Greg  McCue at (202) 429-6421.