Effort to fight duty evasion gains steam

Companies thinking they can skirt antidumping duty laws should be forewarned: There is a growing momentum in Congress to improve upon and better enforce duty collection not just on wooden bedroom furniture from China, but also in other industries where duties are applied, ranging from nail production to shrimp harvesting.

Readers may recall the ENFORCE (Enforcing Orders and Reducing Circumvention and Evasion) Act announced last August. The proposal resulted from a cooperative effort between various elected officials and members of the Coalition to Enforce Antidumping and Countervailing Duty Orders. Among these coalition members is Leggett & Platt, which is encountering alleged duty evasion relating to imports of uncovered innerspring units used in mattresses.

A key goal of duties is to level the playing field for domestic producers injured by illegally priced imports. The ENFORCE Act seeks to improve the Commerce Department's ability to investigate duty evasion and create vehicles that would allow U.S. Customs and Commerce to determine whether an importer is knowingly involved in the evasion - and also to collect those duties from said importer of record later on.

But as with any legislative initiative, these things take time to come to fruition, particularly when there are multiple proposals and ideas involved. But a major step in the process occurred during a May 5 hearing in Washington before the Senate Finance Committee's Subcommittee on International Trade, Customs and Global Competitiveness.

During that hearing, numerous elected officials spoke about the need to better enforce U.S. trade laws.

"Duties aren't going to work unless they are actually assessed and collected," said Sen. Ron Wyden (D-Ore.), who said that subcommittee staff members have found that numerous Chinese suppliers openly advertise duty evasion schemes.

"All this is taking place under the very sleepy eyes of U.S. Customs and Border Protection," he testified before the subcommittee. "While agencies are dragging their feet to enforce our trade laws, this country's domestic manufacturers are being hammered by foreign trade cheats."

Karl Glassman, executive vice president and chief operating officer of Leggett & Platt, also testified on behalf of the coalition.

"We applaud the hard work and diligent efforts of Sen. Wyden and other members of the subcommittee to shine a bipartisan spotlight on this important trade issue," said Glassman. "We support and encourage this Committee to move forward promptly with meaningful, effective legislation to make sure the trade cheats cannot continue to, in Sen. Wyden's words, ‘cheat American taxpayers out of the revenue that is supposed to be collected on imports... and cheat American producers out of business that may otherwise be theirs.' This problem needs to be addressed and fixed now, before more jobs and revenue are lost."

All indications are that a new version of the ENFORCE Act will soon appear that resolves differences in the approach or language of other legislative proposals.

The message to those evading duties: Stay tuned and be prepared that you or your company could be held accountable for such illegal activity.