Despite the pandemic, Customs and Border Protection has once again produced their annual report detailing the agency’s trade and travel facilitation and enforcement efforts.
In a surprise to no one, while passenger processing was down, trade was up slightly and the agency’s enforcement efforts were focused as they usually are on counterfeit and pirated goods. Unlike previous years, the agency was in charge of identifying and preventing entry of many products covered under Withhold Release Orders issued from China’s Xinjiang region and other countries in Asia.
Travelers were way down
The agency reported a 54.2% decline in air travelers and an overall decline for all modes of transportation of 42%. The agency processed 238 million travelers from cruise ships, land border crossings, and aircraft arrivals.
Looking ahead to 2021, the agency doesn’t make forecasts or predictions. Still, this report also highlighted the increased use of biometric identification. It cited it as a potential essential vehicle for integrating public health data such as vaccinated travelers to more rapidly facilitate entry of screened individuals presenting themselves for access, returning from a trip, or arriving from out of the country.
Duty collection rose in 2020
CBP reported entry summary volume slipping 8% compared to FY2019 to 32.8 million entries valued at over $2.4 trillion. Not unlike the decline observed in Los Angeles and Long Beach in the first half of the year, entry summary volume plummeted 20% between April and June compared to the previous year.
The agency collected $74.4 billion in duties, an increase of 3.5% from FY2019. That $74.4 figure breaks down into not only ad valorem duties but trade remedy related tasks as well, including:
- $900 million in Section 201 duties
- $500 million in Section 232 aluminum duties
- $1.3 billion in Section 232 steel duties
- $1.8 billion in AD/CVD deposits
- $35.6 billion in Section 301 duties from China
The China 301 duties represent a 19 percent increase over FY2019.
CBP enforces both their regulations and other agencies such as the FDA, the ITC, and others. The agency is charged with identifying and interdicting counterfeit merchandise, companies evading duty, and preventing entry of goods made with forced labor.
CBP levied $31 million in penalties on importers for fraud, gross negligence, and negligence of AD/CVD requirements on these fronts. CBP was heavily involved in PPE and other pandemic-related fraudulent imports, seizing more than 177,000 FDA-prohibited test kits, 12,709,390 counterfeit face masks 38,098 FDA-prohibited chloroquine tablets.
Forced labor cuts across several products right now, most prominently cotton and tomato products with originating components in western Xinjiang province. CBP is currently enforcing 44 active withhold release orders (WRO’s) and seven functional findings, thirteen of which were issued in FY2020. Cargo detained under these WRO’s rose from approximately $1.4 million FY2019 to nearly $50 million in 2020.
E-commerce was also a vector from which the agency focused on intellectual property rights (IPR) violations and seizures. In FY2020, 90% of IPR seizures were made from express and international mail shipments. E-commerce, whether pandemic or business process-related, led to a dramatic 219% increase in air cargo and a 123% increase in truck shipments.
Compliance is important. Sobel Network Shipping can help.
At Sobel Network Shipping Co., Inc., our licensed customs brokers work with importers and their inbound supply chains, providing a range of services including classification, valuation and binding ruling requests. We work as well with trusted consultants and law firms, ensuring that in an already challenging environment for businesses that goods are properly presented and released and can be delivered into US commerce as quickly as possible and in compliance with US laws. Contact Sobel today to learn how we can help you.