Levin, McDermott Introduce the Customs Enhanced Enforcement and Trade Facilitation Act

WASHINGTON – Today, Ways and Means Committee Ranking Member Sander Levin (D-MI) and Trade Subcommittee Ranking Member Jim McDermott (D-WA) introduced H.R. 6656, the Customs Enhanced Enforcement and Trade Facilitation Act.  The bill reflects bipartisan efforts to modernize, streamline, and strengthen Customs’ trade functions.  While most of the provisions of the bill are identical to the provisions of the Customs Trade Facilitation and Enforcement Act of 2012 introduced by Ways and Means Trade Subcommittee Chairman Brady last week, H.R. 6656 includes stronger enforcement measures, requires the collection of additional security where there is reason to believe an importer is evading U.S. trade remedy laws, and seeks increased funding for USTR, including additional resources to strengthen the enforcement of U.S. trade agreements.  MORE BACKGROUND BELOW

Rep. Levin:  “This bill includes many of the provisions we have worked on a bipartisan basis to develop, addressing issues of common concern about Customs operations and trade facilitation.  But the bill strikes the right balance on trade enforcement, where the Republican approach falls short.  Evasion of antidumping and countervailing duties is illegal and renders our trade remedy law a dead letter.  Customs’ response has to be strong, swift, and unwavering.  Simply codifying existing Customs’ practice, which is widely viewed as inadequate, will not do.  This bill establishes critical new processes to help ensure that the cheating, which is now rampant, stops.”

Rep. McDermott:  “We have worked very hard with our colleagues across the aisle to put together a bill that facilitates legitimate trade – for example, making it less burdensome to return U.S. goods that were improved abroad – and addresses the big challenges that Customs faces.  We are very close, but on the critical issue of trade enforcement, there is still daylight between us.  I think a strong, smart approach is necessary to make sure that U.S. trade remedies laws are respected. That approach is reflected in recent legislation introduced by Representatives Long and Sanchez, with strong bipartisan support, in the House and passed unanimously by the Senate Finance Committee.  I continue to hope that we can find a way forward in the House that reflects this strong bipartisan approach.”

Rep. Linda Sánchez (D-CA):  “The fact is that too many foreign producers ignore our trade laws currently.   It is critical that we strengthen the ability of Customs and Border Protection to prevent foreign manufacturers from evading paying the duties they owe our country.  This unfair advantage hurts too many American businesses, forcing them to shut down.  American businesses and workers can compete and win against products from anywhere in the world if we have a level playing field.  I’m proud that the bipartisan legislation that I have introduced and championed to ensure that trade laws are enforced is being included in this crucial new bill to strengthen Customs’ enforcement.”

Rep. Dan Lipinski (D-IL):  “Duty evasion and illegal transshipment are increasing threats to American manufacturing, which is why I worked to draft legislation to bring specialized training to our Customs agents.  The program provides Customs agents training from those who know most about goods entering our ports, our own private domestic producers and experts.  This public-private partnership will give Customs increased awareness of how to help keep illegal goods from entering our country.  I thank Ranking Member Levin and Ranking Member McDermott for including this important program in H.R. 6656 and I look forward to working with the Ways and Means Committee to pass comprehensive Customs legislation that can help protect American jobs.”

BACKGROUND ON H.R. 6656

Most of the provisions of H.R. 6656 are identical to the provisions of the Customs Trade Facilitation and Enforcement Act of 2012 introduced by Ways and Means Trade Subcommittee Chairman Brady last week and are the result of years of joint work within the Committee.  Both bills reflect, for example, the bipartisan view that simpler Customs procedures should apply with respect to legitimate trade and, thus, create an expedited Customs clearance process for importers with a proven track record of compliance.  Similarly, both bills promote greater focus on Customs’ functions, for example by establishing a Senate-confirmed Deputy Commissioner for Commercial Operations, requiring  a separate budget request for Customs’ commercial operations, and establishing interagency teams and private sector advisory groups to coordinate on trade issues.  Both bills also incorporate legislation developed and introduced by Representative Lipinski (D-IL) to enhance training of Customs personnel in key areas.

Where the two bills differ significantly, however, is with respect to trade enforcement.  Importantly, H.R. 6656 includes stronger provisions to identify and thwart unlawful efforts by importers to evade payment of antidumping and countervailing duties (AD/CVD) owed on merchandise under an order.  Both the Levin/McDermott and the Brady bills include important provisions from recent legislation introduced by Representative Boustany (R-LA) to address evasion, including codifying existing Customs practices that are commendable (for example, improved targeting strategies).  But the Levin/McDermott bill goes further and addresses aspects of Customs practice that are widely viewed by American businesses and workers as falling short. 

For example, the Customs Enhanced Enforcement and Trade Facilitation Act incorporates bipartisan legislation introduced by Representatives Long (R-MO) and Sanchez (D-CA) to address recurrent concerns that Customs is not responding quickly, transparently, and robustly to allegations of evasion, even where stakeholders provide specific evidence of such acts.  The Long/Sanchez legislation establishes a process for submission of evidence and allegations of evasion, timelines for investigation by Customs, and transparency and accountability for Customs’ actions.  This legislation not only has broad bipartisan support in the House, nearly identical legislation passed the Senate Finance Committee unanimously earlier this year.

In addition, H.R. 6656 includes a provision requiring Customs to collect additional security from importers (known as “single transaction bonds”) where there is evidence indicating that evasion may be taking place.  This reflects WTO rules, which permit the collection of reasonable security where there is a specific perceived risk to revenue. 

Further, the bill increases funding for USTR, including additional resources to strengthen the enforcement of U.S. trade agreements.  It also calls on U.S. agencies to coordinate and augment their efforts to enforce those agreements, consistent with the President’s establishment of an Interagency Trade Enforcement Center (ITEC) earlier this year.

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