CBP’s Trade Enforcement Dramatic Increase in FY2021

Trade Update • May 10, 2022

S Customs and Border Protection (CBP) increased trade enforcement measures in fiscal year 2021 and continued to reduce import processing times, as detailed in the recently released FY2021 Trade and Travel Report.

Tariffs

CBP processed $2.8 trillion in imports in FY2021, equating to 36.9 million entries and more than 32.7 million imported cargo containers at U.S. ports of entry. It collected $93.8 billion in duties, taxes and other fees on behalf of the U.S. government in FY2021. These numbers represent a significant increase in trade volume and value over a five- 13 year period. Despite the pandemic, CBP collected $85.5 billion in duties (14.9 percent increase). Much of the increase in duty collections in FY2021 is attributed to the ongoing assessment and collection of Sections 201 and 301 duties on steel, aluminum, washing machines, washing machine parts, solar panels and goods from China.

• CBP assessed more than $955 million in Section 201 duties;
• $445 million in Section 232 aluminum duties;
• $1.6 billion in Section 232 steel duties and;
• $44 billion in duties on Section 301 goods from China during FY2021

Automated Commercial Environment (ACE)

ACE’s streamlined processes saved the trade community $2.25 billion (61 percent increase) in FY 2021. This significant increase can be attributed primarily to the trade community’s expanded use of the Section 321 and Entry Type 86 processes, which provide more efficient, less complicated entry and release procedures for low-value shipments.

• ACE system saved CBP $720.1 million (101 percent increase); increase is primarily due to the increase in Entry Type 86 volume.
• ACE system reduced processing times by 795,000 hours for the trade community and 10.5 million hours for CBP (enabling CBP to divert resources to other priorities).

Antidumping/Countervailing Duties

$30.2 billion of imported goods were subject to AD/CVD in FY2021.

• $2.4 billion was assessed in AD/CVD deposits and levied monetary penalties totalling over $43 million on importers for fraud, gross negligence and negligence of AD/CVD requirements.
• Entry summary reviews resulted in recovery of over $75 million in AD/CVD duties owed.
• CBP’s audit services identified more than $568 million inAD/CVD discrepancies, with $6.3 million collected by the end of FY2021.
• CBP and U.S. Immigration and Customs Enforcement (ICE) seized shipments with a domestic value of more than $10.6 million for AD/CVD violations.
• CBP enforced 96 new AD/CVD orders during FY2021 (17.7 percent increase) with 634 AD/CVD orders in effect at end of FY2021 versus 540 orders at the end of FY2020.

Through the Enforce and Protect Act (EAPA), members of the trade community can submit allegations of duty evasion. CBP then investigates the allegations of evasion of AD/CVD orders against U.S. importers.

• In FY2021, importers were prevented from evading over $375 million in duties owed to the U.S. government.
• CBP officially received 54 new allegations under EAPA from interested parties, initiated 48 EAPA investigations and took interim measures in 41 EAPA investigations to protect revenue owed to the U.S. government.
• In FY2021, CBP issued final determinations of evasion for 44 investigations (47 percent increase)
• CBP conducted five foreign on-site visits or verifications in Cambodia, Vietnam, Singapore and the Dominican Republic during FY2021.
• EAPA investigations cover a wide range of commodities including diamond sawblades, steel and steel pipe products, aluminum extrusions, quartz surface products, plywood, glycine, steel wire garment hangers, xanthan gum, wooden bedroom furniture, wooden cabinets and vanities and light-weight thermal paper.

Forced Labour

The U.S. government will not tolerate forced labor in American supply chains. CBP has developed a robust civil investigative program to identify and prevent goods made by forced labor from entering the United States. CBP can detain and exclude goods produced with forced labor by issuing withhold release orders (WRO) at the ports of entry if information reasonably, but not conclusively, indicates that merchandise is made with forced labor and is being or likely to be imported. CBP also can seize goods by issuing findings if there is probable cause the merchandise is made with forced labor.

• CBP enforced 49 active withhold release orders and seven active findings in FY2021
• Fewer WROs were issued in FY2021 than in FY2020; however, WROs that were issued in FY2021 were more complex and impactful.
• The estimated value of shipments detained pursuant to WROs and seized pursuant to findings rose from just under $50 million in FY2020 to over $485 million in FY2021.
• The WROs and findings issued by CBP in FY2021 targeted a wide array of products ranging from disposable gloves and cotton products to seafood and palm oil. Most of these products originated in China; however, a significant number came from Malaysia.

E-commerce

E-commerce continues to grow exponentially as more consumers are increasingly completing purchases online. These purchases typically ship through international mail and express courier services. The total volume of de minimis shipments (shipments valued at $800 or less) increased across all modes of transportation from FY2020 to FY2021.

• The largest increase occurred in the air environment, where de minimis shipments rose to over 660 million shipments in FY2021 (23 percent increase).

Exponential growth in small package volume and its associated risks has created a paradigm shift in the traditional roles and responsibilities associated with importing into the United States. Traditional supply chain roles within the e-commerce industry are evolving to meet consumer demand with some sales platforms now acting as logistics providers, marketing platforms handling e-payments and start-ups racing to meet consumer demand. This shift also has led to the creation of a new class of importers—everyday consumers who are unfamiliar with trade laws and requirements. As a result CBP launched the Section 321 Data Pilot and the Entry Type 86 Pilot.

• Section 321 Data Pilot is to secure e-commerce supply chains and improve identification and targeting of high-risk e-commerce shipments
• Entry Type 86 Pilot is Section 321 de minimis entry processing which enables customs brokers and self-filers to electronically submit de minimis entries via the Automated Broker Interface, including those subject to data requirements of partner government agencies for clearance. It provides an automated release mechanism and visibility into the contents of de minimis shipments.
• CBP received over 500 million filings from these two programs during FY2021. The key findings include:
  • Significant reduction of manual processing and allowing for same-day clearances (compared with 6-8 day wait times)
  • Approximately $2 billion in time and cost savings associated with Entry Type 86 electronic clearances
  • Quicker, more accurate risk assessment and adjudication for CBP
  • Fewer CBP holds because Section 321 Data Pilot participants provide seller information, product pictures and other transactional details.

Cargo Enforcement and Facilitation

CBP law enforcement personnel use non-intrusive inspection systems (NII) and radiation detection equipment to effectively and efficiently inspect conveyances and vehicles for the presence of contraband and illicit radiological materials.

• The time saved using NII and radiation detection equipment saves CBP $1 billion in annual operations and saves industry $5.8 billion to $17.5 billion in costs due to delays.
• CBP officers used over 350 large scale NII systems at land and sea ports of entry in FY2021 to perform approximately 7.8 million examinations

CBP procured and deployed NII systems throughout FY2021 to increase commercial cargo and vehicle scanning capacity at land ports of entry. Two contracts for drive-through NII systems were awarded to increase scanning at the Southwest border land ports of entry. CBP will initiate design and construction work in FY2022 and anticipates full deployment of these systems by calendar year FY2024.

• After the deployment is completed, commercial cargo scanning is projected to increase from 15 percent to more than 90 percent and;
• Vehicle scanning is expected to increase from one percent to approximately 40 percent where the systems are deployed.
• In the rail environment, CBP initiated design and construction to deploy high-energy rail inspection systems at 12 locations.

CTPAT

The Customs Trade Partnership Against Terrorism (CTPAT) program provides the highest level of cargo security with members of the international supply chain such as importers, carriers, consolidators, licensed customs brokers and manufacturers. There are more than 11,000 certified members of the program all of whom accounted for 52 percent (by value) of cargo imported into the United States in FY2021.

CTPAT partners were required to implement the program’s updated minimum security criteria starting in FY2020. As part of the update process, in FY2021:

• CTPAT completed 1,795 validations to certify that CTPAT members both implemented and followed the highest level of supply chain security measures under these new requirements. 98.2 percent of CTPAT members remained in good standing with the program.
• CTPAT’s enforcement actions led to 142 suspensions and 79 removals in FY2021.

The successful integration of the former Self-Assessment (ISA) program has transformed CTPAT into an Authorized Economic Operator program that includes security and trade compliance. As a result, CBP is now aligned with other customs administrations throughout the world and within CBP.

As part of CBP’s priority to combat forced labor, during FY2021, CTPAT trade compliance collaborated with the Commercial Customs Operations Advisory Committee (COAC) to refine formal program requirements on social compliance that will be rolled out in FY2022.

CBP Trade and Travel Report

Interested in reading the full CBP trade and travel report? View it here.