So I will likely write a bit more on the tariff issue later and it’s possible impacts on the industry, but this week I want to address one very specific compliance factor related to the tariffs—the “effective date.”
The government assigns “effective dates” to rules and regs and the assessment of duties, etc. This is the day upon which enforcement begins…however, and this is key point, they may not actually start enforcing it that day, but eventually they will have done so. “Uh?” You say… (Consider it a form of time travel, government style.)
In this case, yesterday, 9/24/18, the new tariffs on Chinese flooring products came into play. But I’m sure a large number of containers that were officially entered yesterday or are being entered today or even tomorrow and into next week may not show the tariff listed on the bill you get from Customs. “Ha!” you think, “I sneaked this one through.”
No you didn’t.
Remember that when you enter material, you are doing a preliminary submission which the government reviews—the order isn’t officially closed down and completed until it is “liquidated.” The government looks at the info you provided and decides if they agree with it or not—and you also have time to catch a mistake and do a voluntary adjustment. When the government is ready to close the file, they send you the final bill (ideally saying “all was in order, you’re done”) and liquidates the entry.
For normal entries, although Customs legally has nearly a full year to mull things over, it’s normally averages about 6 months between when the container comes in and they liquidate it. For material under a dumping order it can be years, even decades before things are closed down. (I’m not kidding about it taking a while—I believe the record is approximately 25 years for a container of material that came in from Japan.) There are other types of entries that might have different periods of time between arrival and liquidation, but the bottom line is that in that time period, Customs is making sure they agree that everything was entered properly and that they got every penny they felt they were owed.
So what this all means is that if you didn’t pay the additional 10% when something came into the US this week, Customs has plenty of time to come back and assess that 10% tariff at liquidation.
Oh, and don’t forget—they’ll probably charge you interest too.
Elizabeth Baldwin is Environmental Compliance Officer for Metropolitan Hardwood Floors. In her 25 plus year career in the wood industry has visited over 70 countries and hundreds of facilities of all sizes and types. She describes herself as a “jack of all wood trades.” Familiar with jungles of all sorts–having camped out along the Amazon and walked the halls of Congress–she blogs for the NWFA on both environmental and regulatory issues for educational and informational purposes only. Her blog is not intended and should not be construed as legal advice. Persons seeking legal advice on compliance with CARB, TSCA, the U.S. Lacey Act or any other law, regulation, or compliance requirement/claim should consult with the regulatory agency directly and/or a qualified legal professional.