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Point of View: Continuous-bond policy politically motivated
By Greg Rushford
April 01, 2007
As if importers of America's favorite seafood didn't already
have enough worries - with antidumping tariffs ranging from 6
to 113 percent on shrimp from Thailand, China and four other
Asian and Latin countries - consider the matter of U.S. Customs
and Border Protection's so-called "continuous bond" policy.
It's a continuous nightmare.
Conceived in secrecy and applied in an "arbitrary and
capricious" manner that constitutes an "abuse of discretion,"
as a federal judge has determined, the new bonds have wreaked
havoc in the shrimp industry. Importers have had to struggle
with over-extended credit lines and disrupted sales that the
nefarious bond policy has caused; some have even been forced
out of the business. Unabashed, CBP officials want to inflict
the bonds upon the rest of the seafood industry.
It gets worse. Documents from CBP's own files reveal that
political calculations, not the public interest, have driven
this policy.
The antidumping tariffs on the six shrimp-exporting
countries were imposed in February 2005. That same month, CBP
implemented the continuous bonds.
In previous months, there
had been no official notice in the
Federal Register, no public
comment period.
Ken Pierce, a lawyer for the Thai shrimp industry, argues
it's "double taxation." Before the continuous bonds were
imposed, Pierce explains, an importer who brings in $100
million of shrimp with a 6 percent antidumping duty was
required to post a cash deposit of $6 million to cover the
tariffs, plus a $50,000 bond. That was tough enough. But with
the continuous bonds, that $50,000 bond would morph into a
whopping $6 million, secured by pledging a portion of the
importer's business as collateral - and repeating the process
annually to keep the line of credit open. When the National
Fisheries Institute took CBP to court in 2005, the agency said
that it had been trying to ensure that antidumping duties would
be paid to the U.S. Treasury, pointing to evasions associated
with imports of Chinese crawfish and garlic. But in New York
last November, U.S. Judge Timothy Stanceu of the U.S. Court of
International Trade cited CBP internal documents to conclude
that the agency had also been motivated "by domestic political
pressures to take action directed against the shrimp importing
industry."
The judge cited CBP documents that acknowledged that the
officials were aware that the shrimp duties, thanks to the
notorious Byrd Amendment, would go into the pockets of members
of the Southern Shrimp Alliance who had filed the antidumping
petition, not the U.S. Treasury. "The domestic petitioners in
this case are from south and southeastern states that have
congressional representation on" key committees, one internal
CBP memo observed. "The importers are not as geographically
concentrated."
Despite the judge's criticisms, the NFI lawsuit continues
with no conclusion expected anytime soon, due to the
anticipated appeal from the losing side when Stanceu issues a
final determination. Meanwhile, the related WTO litigation that
Thailand has brought is just getting started.
For importers, the continuous nightmare continues.
Greg Rushford is editor and publisher of the Rushford
Report, an online journal on international trade politics at
www.RushfordReport.com