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Sharp increase in uncollected AD/CVD
U.S. Customs and Border Protection (CBP) posted a report on their Web site revealing an increase in the amount of uncollected
anti-dumping and countervailing duties (AD/CVD) for fiscal year (FY) 2007.
Uncollected AD/CVD in FY 2007 totaled $236.9 million, a 62 percent increase from FY 2006’s $146.4 million. The numbers also indicated a 154 percent increase overall compared to FY 2005’s $93.2 million. While the increase seems steep, the 2007 amount was still lower than the $260.1 million uncollected in FY 2004.
Commodities from China represent nearly 90 percent of the FY 2007 total at $211.2 million. Specific Chinese products with high uncollected amounts include: crawfish tail meat at about $78 million, fresh garlic at $50.8 million and honey at $39.5 million. Other products with substantial amounts of uncollected duties consist of frozen fish fillets from Vietnam at $15 million and corrosion-resistant carbon steel flat products from Canada at $2.3 million.
Click here to view the full report.
The 2007 figures confirm CBP’s difficulty in collecting duties owed on imported goods subject to AD/CVD orders. The problem was often attributed to new shippers posting relatively inexpensive bonds to cover the anticipated AD/CVD, which was then avoided when the shippers disappeared or declared bankruptcy. According to WorldTrade Interactive, in August 2006, the Bush Administration enacted a law to suspend new shipper bonding privileges for three years to alleviate the problem, but the increase in uncollected duties from FY 2006 to FY 2007 indicates the law is ineffective or a different problem emerged.
Avalon remains diligent with respect to the considerable risk in issuing AD/CVD bonds. Customs brokers must contact Avalon for approval to write any AD/CVD bonds. Avalon will require a signed Bond Application/Indemnity, Audited Financial Statements and Collateral, in whole or in part, to consider writing the risk because of the large aggregation that can result from a single transaction bond. In some cases, CBP is also requiring a large continuous bond to secure AD/CVD entries and such continuous bonds must also be approved by Avalon with similar requirements.
Avalon is a market leader with a 35 percent share of the Customs bond market. Avalon’s Customs surety program is underwritten by our sister company, Lincoln General Insurance Company. Avalon and Lincoln are both wholly-owned subsidiaries of Kingsway Financial Services, publicly traded on the NYSE under ticker symbol KFS, so you can be assured of our financial stability and dedication to your industry.
For further information, contact Andriana Davis, Product Manager at Avalon’s corporate headquarters. Andriana Davis can be reached at (847) 700-8087 or at
adavis@avalonrisk.com. Please do not hesitate to contact one of our nine regional offices throughout the United States.
To view a directory of Avalon’s office locations, please
visit our Web site at
www.avalonrisk.com.
Source: Worldtrade Interactive
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