Now that the Section 301 tariffs are effective, importers are required pay additional duties – but not all are doing so. We found that while some importers know their product is subject to one of the 3 Chinese tariff lists, they are either using HTS’s not on the list (even though that is not the correct HTS for their product), or using an HTS subject to additional tariffs, but, not paying the additional tariffs. If you are an honest importer paying the correct amount of additional duties, this may leave you unable to compete in the current market.
If you’ve noticed that some of your competitor’s pricing has not been affected by the additional tariffs and you have been forced to increase your prices to stay in business, you have an option to help equal the playing field.
What can you do if you know that one or more of your competitors are not paying the Section 301 Chinese tariff?
You can inform CBP of the violation through their e-Allegation portal. An e-Allegation provides the public the opportunity to report to CBP any suspected violation of trade or regulations related to the importation of goods into the U.S. Anyone can report a violation through e-Allegation. CBP allows you to remain anonymous when reporting an allegation. CBP will not keep you advised of the status of their investigation (unlike an EAPA allegation), but, CBP will take the allegation seriously (especially if written professionally with specific details).
What information are you required to provide CBP through the e-Allegation portal?
Some of the information includes but is not limited to the name and address of the importer against whom the allegation is brought; description of the covered merchandise; harmonized tariff schedule (HTS) of the merchandise at issue; and information reasonably available to you to support your allegation of the importer with respect to whom the allegation is filed is engaged in evasion. CBP often takes allegations that are supported by evidence more seriously. If you elect to not submit anonymously, CBP will accept supplemental evidence on an ongoing basis and will contact the reporter for clarification. It is essential to keep in mind that the Privacy Act and Trade Secrets Act laws prevent CBP from providing a reporter with updates or the results of an e-Allegation.
CBP may issue a Request for Information (CBP 28) to the alleged violator to confirm that the product is subject to the additional duties and thereafter verify whether your competitor declared/paid the additional duties. In our previous blog, we discussed the fact that importers typically still have the ability to file a Prior Disclosure with CBP after receiving a CBP 28. Remember, CBP 28’s can lead to CBP 29’s, and CBP Penalties under 19 U.S.C. 1592.
How can DTL help you?
DTL can help you identify whether your product is subject to the Section 301 tariffs, and if you believe your competitor is not paying the required Chinese tariffs, we are able to assist in submitting an e-allegation with sufficient supporting evidence to CBP, and escalate the allegation to the appropriate CBP CEE. We can be reached at firstname.lastname@example.org or 305-456-3830.