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Highlights

Since 2003, the Department of Homeland Security's U.S. Customs and Border Protection (CBP) has been unable to collect at least $480 million in antidumping (AD) and countervailing (CV) duties. In July 2004, CBP revised its policy regarding the continuous bonds (CB) that importers post. The policy potentially significantly increases the amount of the bonds for affected importers. Following the application of the policy to imports of shrimp as a "test case," U.S. importers and trading partners initiated legal action to prevent CBP from continuing to apply the policy. GAO examined why and how CBP revised its CB policy, how CBP implemented the revised policy, and the effects of the revised policy.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Bureau of Customs and Border Protection To ensure that CBP's goal of ensuring collection of AD/CV duties without imposing an excessive burden on importers or international trade and commerce is achieved, the Commissioner of CBP should conduct a formal review of the lessons CBP can learn from implementing the revised CB policy on shrimp imports. Given CBP's stated desire not to unnecessarily burden importers, this review should include specific steps to systematically obtain importers' views on the policy. Moreover, the review should examine whether the policy appropriately addresses the underlying risks to CBP's collection of AD/CV duties.
Closed - Implemented
Following GAO's report, CBP established guidance and provided additional information on the process for applying its Continuous Bond (CB) policy, and sought public comment on the guidance via a Federal Register Notice in October 2006. After this public comment period and an adverse decision by the World Trade Organization, CBP subsequently decided to terminate its application of the CB policy in January 2009. In making this decision, CBP acted in a manner that was consistent with our recommendations in that they made a decision on the overall policy based on the lessons learned in applying this bonding policy to shrimp imports. Since the policy is no longer being applied, there was no need for CBP to undertake any further review to examine lessons learned or whether the policy appropriately addressed the underlying risks to CBP's collection of AD/CV duties.
Bureau of Customs and Border Protection To ensure full transparency and remedy inconsistent implementation of the CB policy, the Commissioner of CBP should develop clear and consistent guidance for implementing the policy, take steps to inform covered importers of the basis upon which CBP will reduce importers' bond requirement, and ensure the guidance is uniformly applied.
Closed - Implemented
Following GAO's report, CBP established guidance and provided additional information on the process for applying its Continuous Bond (CB) policy, and sought public comment on the guidance via a Federal Register Notice in October 2006. After this public comment period and an adverse decision by the World Trade Organization, CBP subsequently decided to terminate its application of the CB policy in January 2009. In making this decision, CBP acted in a manner that was consistent with our recommendations in that they made a decision on the overall policy based on the lessons learned in applying this bonding policy to shrimp imports. Since the policy is no longer being applied, there was no need for CBP to undertake any further review to examine lessons learned or whether the policy appropriately addressed the underlying risks to CBP's collection of AD/CV duties.

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