Southern Shrimp Alliance Asks Customs and Border Protection to Use New Anti-Evasion Administrative Proceedings to Prevent Trade Fraud

Yesterday, the Southern Shrimp Alliance submitted written comments to U.S. Customs and Border Protection (CBP) in response to interim regulations adopted by the agency to implement the
Enforce and Protect Act of 2015 (EAPA) enacted into law as Title IV of the
Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA).  These interim regulations establish a new administrative proceeding administered by CBP that allows individuals and companies to present allegations that imported goods subject to antidumping (AD) and/or countervailing (CV) duty orders were entered through evasion.
Once an administrative proceeding is initiated in response to an allegation, the party that filed the allegation may formally participate in CBP’s investigation.  Under the interim regulations announced by the agency, CBP need only notify the party making the allegation and the alleged evader regarding the agency’s decision as to whether to initiate an EAPA investigation, whether to take interim measures while an EAPA investigation is pending, and whether the imported merchandise has entered through evasion.
The Southern Shrimp Alliance’s comments emphasized that the determinations made by CBP through these new EAPA proceedings must be publicized.  Limited disclosure runs contrary to the new law’s intent to prevent unlawful circumvention of AD/CV orders.  In the absence of public disclosure and broad distribution of CBP’s actions and determinations, the trade community cannot take the steps necessary to insure informed compliance with trade laws.  More disturbingly, if CBP makes affirmative evasion determinations but severely restricts distribution of these decisions, the market need not make any adjustment to confirmed trade fraud.
The domestic shrimp industry’s experience working to counteract evasion demonstrates the importance of publication.  CBP has previously published information related to the agency’s enforcement actions regarding “dusted” shrimp.  CBP’s publication of this information confirmed that abuse of the “dusted” shrimp exclusion was occurring and included a detailed description of the steps taken by CBP to distinguish mis-described “dusted” shrimp from “dusted” shrimp that legitimately met the criteria of the exclusion.  This information assisted in the closing of a loophole in trade relief against unfairly traded imports.  Similarly, publication regarding the actions and determinations made by CBP regarding alleged evasion provides the trade community with information regarding circumvention schemes that can be addressed within a supply chain.
The fact that import fraud is widespread within the U.S. shrimp market is generally known and accepted.  As just one example, concerns regarding contaminated Malaysian shrimp imports have been explained away in industry press as the result of transshipment of Chinese shrimp.
Even when the fact of shrimp trade fraud is acknowledged, industry participants tend to caveat this recognition with unsupported claims that the fraud only impacts niche markets.  However, contrary to this view, the limited publicly available evidence regarding shrimp trade fraud establishes that falsely-traded shrimp is sold through the same distribution channels, to the same retailers and restaurants, as legitimately-imported shrimp as well as domestically harvested shrimp.
“CBP’s new evasion proceedings should be evaluated by how much trade fraud they prevent,” said John Williams, executive director of the Southern Shrimp Alliance.  “The publication of CBP’s determinations is an essential part of the preventive mission of the Enforce and Protect Act and must be a priority for CBP.”
Read the Southern Shrimp Alliance’s October 19, 2016 written comments to U.S. Customs and Border Protection here:
Find information regarding U.S. Customs and Border Protection’s implementation of the Enforce and Protect Act of 2015 here:

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