Indian shrimp sales to the US dropped by a third before the dumping duties and bond requirements were implemented. (Photo: YouTube/Stock File/FIS)

US asked to release money locked up in customs bonds

INDIA
Friday, December 17, 2010, 01:50 (GMT + 9)

Indian officials have requested that the US return the money locked up in Customs bonds to the appropriate shrimp exporters.

Back in 2005, the US implemented an anti-dumping fee of 10.17 per cent on Indian shrimp imports and asked US shrimp importers to give enhanced Customs bonds worth the duty for imports from the past 12-months. But the importers refused, and Indian exporters had to pay the cost to continue their business.

When India filed a successful complaint with the World Trade Organisation (WTO) in 2008, the US stopped asking for the money but did not return the funds from 2005-2008. The Customs bonds constitute a cash guarantee to make sure that the importer pays all the duties and levies charged by the authority.

“As much as USD 30 million of our shrimp exporters’ money has been blocked because of non-release of old bonds which is grossly unfair,” a commerce department official said, reports The Economic Times.

India´s complaint argued that the enhanced Customs bonds requirement did not correspond with the rules. In 2009, the WTO agreed and asked the US Customs and Border Protection (CBP) to get rid of the requirement.

The anti-dumping duty also fell to below 1 per cent before rising to slightly more than 2 per cent in 2010.

"A large amount of our capital is locked in those bonds and it affects all our exporters, especially the smaller ones," stressed MK Ram Mohan, Deputy Director of Marketing at the Marine Products Export Development Authority (MPEDA).

In addition to the money being trapped in bonds, exporters must pay a yearly fee of 3 per cent.

The demand by India for the US to release the funds is backed by a decision made by the US court for international trade in support of Indian shrimp importers battling the furnishing of bonds.

Further, the matter was discussed between trade officials of both countries when US President Barack Obama visited India.

"We discussed the issue at length during the US President's visit, and we have received assurance that the government would look into the issue," the deputy director said.

Indian shrimp sales to the US dropped by a third before the dumping duties and bond requirements were implemented in 2004. India wants to settle the issue bilaterally.

"We are hopeful that US Customs will settle issue to our satisfaction," the official stated.

Related articles:

- Shrimp exporters appeal to WTO over new US tariffs
- July exports rose 22 pc, hit USD 170 mln

By Natalia Real
[email protected]
www.seafood.media

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