Responding to input from her Manufacturing Jobs Tour, Senator proposes bill to curb duty evasion by foreign companies
Foreign companies are smuggling products into the country to avoid paying penalties they owe when they have been caught engaging in unfair trading practices, and U.S. Senator Claire McCaskill is seeking to end the practice with new legislation that aims to boost Missouri manufacturing jobs.
The announcement comes on the heels of McCaskill's Missouri Manufacturing Jobs Tour, in which she heard input from manufacturers across the state on how to keep creating more jobs and boosting business.
Many companies expressed frustration to McCaskill that an increasing number of foreign shippers are using unscrupulous and illegal tactics to avoid paying penalties they owe for illegal trade practices. McCaskill's Fighting for American Industry's Right (FAIR) to Enforcement Against Duty Evasion Act aims to close loopholes that enable fraud, and to give law enforcement officials better tools to find and prosecute lawbreakers.
"When Missouri businesses compete on a level playing field, they win--and that means more jobs for Missourians," McCaskill said. "After sitting down and hearing from employers in every corner of the state, I introduced this legislation to help make sure that the playing field is level, and to bring accountability to foreign companies who are gaming the system and putting our businesses at a disadvantage."
McCaskill's legislation builds on other proposals to curb duty evasion by focusing on two key issues that other bills have not addressed: that duty evaders are difficult to identify and locate (making it challenging for officials to crack down on those cheating), and that current law allows foreign companies that have not previously exported to the U.S. to post a bond to cover the duties they are estimated to owe, while other shippers are required to pay cash (the foreign companies often "disappear" before paying the fully assessed amount of the duties they owe).
McCaskill's bill would address these issues by:
· Creating "know-your-customer" rules for customs brokers: the bill would require customs brokers to obtain identifying information from their clients, and make a good faith effort to verify that information. The information would then be available to law enforcement during an investigation, thereby increasing the likelihood the lawbreakers can be identified and brought to justice. The bill would also create a safe harbor to shield brokers from fines if they make a good faith effort to comply.
· Permanently eliminating the "bonding-in-lieu" provision for new shippers: Current law allows new shippers to post a bond for duties owed, rather than cash up front as all other shippers are required to do--something that is not necessary under U.S. trade agreements. Under McCaskill's legislation, new foreign importers would have to pay the full estimate of duties owed on products they are importing at the time they initiate the import process.