[author: Lee Smith]

On February 24, President Obama signed into law the Trade Facilitation and Trade Enforcement Act of 2015 (H.R. 644), which the Senate had passed earlier in February by a 75-20 vote and the House passed in December 2015 by a 256-148 vote. Known generally as the “Customs bill,” this comprehensive legislation addresses several key topics, including prevention of evasion of antidumping (AD) and countervailing duty (CVD) orders, import-related protection of intellectual property (IP) rights, import health and safety, and enhanced engagement and review of potential currency manipulation. Also included are several measures affecting U.S. Customs and Border Protection (CBP) modernization and importation into the United States generally, among many other issues.

The Enforce and Protect Act of 2015 portion of the Customs bill creates the Trade Remedy Law Enforcement Division within the Department of Homeland Security (DHS), which will be dedicated to preventing and countering the evasion of AD and CVD duties by importers. Under the legislation, CBP may investigate allegations that merchandise that is subject to an AD or CVD order entered into the United States through evasion, and CBP must announce its determination, which will be subject to judicial review.

Another key provision is designed to provide enhanced protections for copyrights, trademarks, and other IP rights that are enforced by CBP or U.S. Immigration and Customs Enforcement (ICE). Among other things, the legislation empowers CBP to investigate merchandise suspected of infringing trademarks or copyrights by permitting rights holders to conduct examination and testing of the merchandise. Importantly, this new level of coordination between CBP and rights holders is only available to trademarks and copyrights that are recorded with CBP.

The Customs bill also mandates the establishment of an Interagency Import Safety Working Group. The working group will be comprised of leaders at several federal agencies, including DHS, the Department of Health and Human Services, the Department of the Treasury (Treasury), the Department of Commerce (Commerce), the Department of Agriculture, the United States Trade Representative, the Office of Management and Budget, the Food and Drug Administration, CBP, the Consumer Product Safety Commission, ICE, and other agencies that may be identified by the President. The working group must participate in the creation of a Joint Import Safety Rapid Response Plan to be followed by CBP when faced with imports that pose threats to the health or safety of consumers in the United States. Additional duties for the working group include consultation with the private sector to ensure better import safety, including through inspection of foreign manufacturing facilities and improvements to the international supply chain.

The Customs bill contains several other measures affecting imports into the United States, including customs modernization, trade facilitation and trade enforcement, and other provisions. CBP is instructed to centralize all trade enforcement and trade facilitation operations within the Centers of Excellence and Expertise (CEE) program, including “Priority Trade Issues,” which are identified as agriculture, AD and CVD, import safety, IP rights, revenue, textiles and apparel, and trade agreements and preference programs. The legislation contains significant changes to duty drawback, including a new requirement that manufacturing drawback claims be accompanied by a detailed bill of materials or formula identifying the relevant inputs by 8-digit Harmonized Tariff Schedule subheading number and quantity.

Additional provisions of note include (1) the elimination of the consumptive demand exception to the prohibition on importation of goods made with convict labor, forced labor, or indentured labor; (2) additional tools to combat unlawful imports of honey into the United States; (3) enhanced CBP training to address unlawful imports, exports, or trafficking in cultural property, archaeological or ethnological materials, fish, wildlife, and plants; (4) a mandate for CBP to prepare reports on the agency’s revenue protection measures (including AD and CVD duties and commercial fines and penalties); and (5) new priorities and performance standards to assess the levels of achievement of customs modernization.

In sum, the Trade Facilitation and Trade Enforcement Act is a comprehensive package of customs and trade measures that will affect virtually every segment of the U.S. economy for years to come.