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Congress Approves Customs Reauthorisation Legislation

The Senate approved on 11 February the December 2015 bi-cameral conference agreement on the customs reauthorisation legislation (H.R. 644). As a result, the legislation will now be forwarded to President Obama for his signature.

The White House has indicated that the president will sign the bill into law even though he does not support some of its provisions. Of particular concern is a provision that the White House believes contravenes long-standing U.S. policy towards Israel and the occupied territories, including with regard to Israeli settlement activity. At the same time, the White House believes the legislation will strengthen trade enforcement at U.S. ports and borders and improve the ability of the U.S. government to stop evasion of U.S. trade laws. Also of special importance are provisions to improve transparency, accountability and co-ordination in U.S. trade enforcement efforts as well as new tools to address unfair currency practices that will ostensibly help level the playing field for American workers and businesses.

The Office of the U.S. Trade Representative observed in a 11 February fact sheet that the bill’s enforcement provisions will better enable the United States to enforce the “groundbreaking intellectual property, labor, environment and many other fully enforceable commitments” the United States secured in the Trans-Pacific Partnership. These include codifying the Interagency Center on Trade Implementation, Monitoring and Enforcement (formerly the Interagency Trade Enforcement Center) at USTR, creating a trust fund to provide up to US$15 million a year in new resources for trade enforcement efforts, improving the ability of U.S. authorities to target trading partners who attempt to evade U.S. antidumping and countervailing duty orders, strengthening intellectual property rights protections by authorising the seizure of circumvention devices and facilitating the seizure of suspect merchandise, mandating a strategic multi-year plan for trade enforcement, strengthening the prohibition on importing goods made by forced labour, adopting new and “unprecedented” mechanisms to address unfair currency practices, and requiring a report on the effectiveness of trade enforcement activities such as fraud prevention and transshipment.

The customs reauthorisation legislation includes compromise language on addressing evasion of AD and CV duties but does not include a provision to reform the miscellaneous tariff bill process. Instead, Congress approved non-binding language highlighting the need for “a regular and predictable legislative process for the temporary suspension and reduction of duties that is consistent with the rules of the Senate and the House.” The Trade Facilitation and Trade Enforcement Act of 2015 will also do the following.

  • reduce paperwork burdens for low-value shipments, U.S. goods returned, drawback and residue
  • increase from US$200 to US$800 the value of goods that may be imported by one person on one day free of duty and tax
  • establish Centers for Excellence and Expertise within U.S. Customs and Border Protection
  • require CBP to work with the private sector to (i) ensure that agency partnership programme participants receive commercially significant and measurable trade benefits and (ii) improve its ability to classify and appraise imported goods, improve trade enforcement efforts and further facilitate trade
  • require CBP to create minimum standards regarding the identity of importers that will apply in connection with the importation of goods and establish penalties for customs brokers failing to collect the information required
  • modernise CBP’s automated systems, continue authorisation to complete the development and implementation of the Automated Commercial Environment for processing imports and exports, and establish reporting requirements for programme accountability
  • set requirements and deadlines so that all U.S. government import and export requirements are fulfilled through a single window
  • direct CBP to establish a new importer programme that requires bond amounts for new importers to be adjusted based on the level of risk posed to federal revenue
  • authorise CBP to establish pre-clearance operations, subject to stringent notification, certification and consultation requirements
  • establish tools for CBP to effectively act against evasion of AD and CV duties through a new process with strict deadlines and judicial review
  • direct CBP to dedicate resources and personnel to address concerns of illegal honey transshipment
  • require the negotiation of bi-lateral agreements with the customs authorities of other countries to co-operate on preventing evasion of trade remedy measures
  • ensure that all distributions required by the Continued Dumping and Subsidy Offset Act are made
  • establish a new enforcement fund to provide the necessary resources to enforce U.S. trade agreements
  • expand the Special 301 report to include trade secrets, create additional intellectual property monitoring tools, and establish a chief innovation and intellectual property negotiator
  • require CBP to provide IPR right holders with samples to identify counterfeits
  • create new oversight of trade enforcement by USTR
  • eliminate an exemption in current law that allows the United States to import products made with forced, convict or indentured labour if the U.S. does not produce a sufficient amount of those goods to meet domestic consumption levels
  • create an early warning system to identify trade surges from unfair trade
  • enhance targeting of high-risk shipments
  • provide clear direction and robust tools for identifying and addressing currency manipulation
  • reaffirm that trade agreements must not include obligations for the United States regarding greenhouse gas emissions measures (other than those fulfilling other negotiating objectives in the trade promotion authority law) or require changes to U.S. immigration law or expanded visa access
  • strengthen incentives to address human trafficking
  • address barriers to fisheries trade, fisheries subsidies and illegal fishing through a new negotiating objective
  • ensure greater oversight of administration nominees and at negotiating rounds
  • combat politically-motivated acts of boycott against, divestment from, and sanctions against Israel
  • authorise the state trade expansion programme, improve state and federal export promotion co-ordination, and make improvements so that small businesses fully benefit from trade agreements
  • make technical corrections related to certain outerwear and footwear provisions in the Trade Preferences Extension Act of 2015
  • establish a trade preference programme for certain products of HS Chapters 42, 57, 61, 62, 63 and 65 from Nepal
Content provided by Picture: HKTDC Research
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