Expeditors International of Washington, Inc. (EXPD) Earnings Call Transcript & Summary

Hello, and good morning or good afternoon based on where you are, to everyone who's joined our webinar today. Today, we're going to be going through antidumping and countervailing basics, and I'm going to go ahead and introduce our speakers. But first and foremost, I wanted to go through the structure of today's webinar. We have 60 minutes on the clock today on the calendar with 4 speakers here. And it's going to be about 45 minutes of content, give or take, and then a little bit of time at the end for questions. [Operator Instructions]. And if we don't answer your question, we will follow up with you after the webinar today. My name is Nicole. I'm going to be your host. So if you have any questions with follow-up, I will be sending out the feedback survey after the webinar. With completion of the feedback survey, you will receive a copy of the slides that were presented today. Now without further ado, I'm going to introduce our speakers. We have with us Madeleine Veigel, Director of Customs for the Americas; Stephanie Holloway, Regional Manager for Customs for the Americas; Rick Catalani, Director of Customs for the United States; Ted Henderson, Senior Adviser of Customs. Now without further ado, I'll pass it on to Ted, and he will take us through the content.

All right. Thank you, kindly, Nicole, and thank you all very kindly for joining us for this antidumping and countervailing duty basics webinar. We absolutely always appreciate you guys joining us for these webinars. It's been a while since we've hosted a webinar on this subject. So we thought it was a good time to revisit this priority trade initiative for U.S. Customs and Border protection. It seems like a lot of our focus right now is on force labor enforcement and things like that in the trade compliance arena, but we do want to revisit this subject because this is definitely an important area of enforcement for the U.S. government. So again, as Nicole pointed out, this is 60 minutes. [Operator Instructions]. Again, as a reminder for folks, if you're just coming on now, you will receive a copy of today's presentation. So -- hopefully, you can sit back, taking the information, take notes, but you don't need to frantically screenprint each slide as we put it up there. Here's the agenda and a quick view of what we're going to focus in today's webinar. I want to just say firmly upfront that this is an AD/CVD basics presentation. If this is new to you, if the subject is new to you and you're trying to get up to speed on it, then really this will start you on the path and hopefully lead you to further sources to develop your mastery. If you think in terms of college classes, this is not even AD/CVD 101, this is just intro. We're going to hit the key points related to this important trade remedy initiative. Our goal is really to try to inform and educate you on those points. And that way, hopefully help you better meet your responsibilities as an importer and hopefully help support your conversations with U.S. Customs Border Protection, with us as your customs broker and help you navigate through this. We're not going to get into the deep nitty-gritty detail. And quite frankly, I know whenever we have these discussions, somebody has the question of is my specific product is it subject to antidumping or countervailing duties. And frankly, we're not going to be able to get to something that specific today. But hopefully, we'll arm you with enough information that maybe you can get there on your own. So we do hope you find that this information is useful, informative. And again, thank you for joining, and let's get started. So we're going to start with just kind of a high-level view of the concept of antidumping countervailing duty. So as we all know, for the -- all of us in business, there's always an interest in trying to find that competitive advantage in our respective marketplaces. We do that as a customs broker, you're doing it as an importer for a company. Unfortunately, folks sometimes look for opportunities to find an unfair advantage when they're competing in the marketplace. And that really leads us to this discussion about imports that might come into the United States at an unfairly low price. If you didn't know this, there are dedicated folks at U.S. government agencies that spend a lot of time looking at this specific area. The oversight of potential matters related to unfair low price of imports and dumping and subsidization, that's your word for the day, of imports by foreign governments, all of that is managed by a couple of key government agencies that we're going to talk about. And we're really going to spend a little time talking about the formalized process of how the government deals with managing the whole oversight of this area. So the process starts with an allegation or a belief by someone that certain goods are being sold in the U.S. at an unfairly low price. And that allegation can come from the private sector, from a U.S. industry or a trade associate, trade union, something like that, someone who's being harmed. Or it can come from certain U.S. government agencies. And I do want to be clear, there are very specific definitions of what an unfairly low price is that's established in U.S. statute and regulation. So this isn't just someone throwing a dart at the wall saying, oh, I think the pricing is wrong on this. There's a certain formula that folks have to follow in this area. So the initial allegation will cause an investigation to be opened by the U.S. government. And the goal of the investigation is to determine 2 things: first, if the goods are in fact being sold in the U.S. at unfairly low prices; and then second, if there is a U.S. industry, a U.S. company that's being harmed by the low-cost imports. And that investigation follows a certain course. And again, we're going to really spend some time talking about that a little bit further in the conversation here. Ultimately, from that investigation comes results. And the results generally go in 1 of 2 different ways: first, if the government may find that their goods are not being sold in the U.S. at unfairly low prices and/or a local industry is not being harmed. And at that point, the case is terminated. So that's one possibility. Second, there is a finding that the allegations are indeed true, and U.S. industry is being harmed. And then at that point, additional duties will be assessed against those imports in an effort to try to level the playing field. The idea is -- out of this anti-dumping countervailing duty concept is that -- is the U.S. manufacturers and U.S. importers of the same goods are basically in a similar cost structure and can compete relatively equally for the same market. So the duties that get assessed are antidumping and/or countervailing duties depending on the specific incident, all right? So we're going to use 2 favorite acronyms throughout the course of this conversation, and that's either ADD or CVD. And we want to be clear of what those are. So when we use the term ADD, we're talking about antidumping duty. And CVD means countervailing duty. We sometimes -- you see the blend in the conversations that speaks to AD/CVD, and that's just the idea that antidumping countervailing duty. It's generally how the government refers to it. So let's move on, please. So let's talk about why this is important. I'm going to start with a brief story about why this is important to the U.S. government this idea of enforcing against low-value imports into the United States. So this really revolves around the U.S. television industry or actually more accurately what was the U.S. television industry. So in the 1960s and '70s American television manufacturers ruled the overall industry, not here in the -- not just here in the U.S., but really worldwide. Brand names like Zenith and Philco in Sylvainia, Emerson, Magnavox, Motorola, Westinghouse, GE, you name it. Those were the preeminent brands that you found in a U.S. house and again, in various houses around the globe. Without really going into the whole detailed sort of story, you can search this on the web, if you'd like to really dig into it, but a small group of Japanese manufacturers were basically able to completely replace those U.S. brands in just about a decade of time. And then the U.S., really, that was done, the tool they used, if you will, was dumping. This group of manufacturers used a variety of mechanisms to monopolize the TV electronics market, not only here in the U.S., but also in their home country in Japan. They created a cartel. They did price fixing in their home market of Japan. They maneuvered for tariff barriers also to protect them for imports into Japan, theft of intellectual property rights. It just goes on and on, but really the key thing was in order for these manufacturers to gain ground in the U.S. and ultimately just take over the market, it was by dumping the TVs, the Japanese TVs at unfairly low prices. They actually used a dual invoicing scheme to get around customs visibility on it as well, for those of you who are really into the customs nerd thing like myself. But starting in the mid-60s, these Japanese manufacturers, again, were dumping TVs into the U.S. at a very low cost and a high volume of goods with the expectation that if the manufacturers -- Japanese manufacturers could hold on long enough, ultimately, your competition can't survive against a low-priced article and your competition fades away. So that's basically what happened. The U.S. TV industry was completely decimated. You can go out and find there's all sorts of numbers out there, what happened, but the TV industry in the U.S. declined about 50% from 1966 to 1970. By the time 1981 came along, another 50% plus went away. So the unfortunate thing was somebody did actually voice that there was dumping and tried to file a case to the U.S. government. The government took years and years to even react and create an investigation here in the U.S. on dumping. By the time the investigation was closed, it was then another 3, 4 years before they got around to implementing any -- add a dumping duty to try to offset the dumping of the TVs. And basically, by then, it was too late. And if you look at where we are today and you look at how the idea of flat panels and TVs and how that's evolved and digital recorders and even VCRs from way back or video gaming machines, all of that potential opportunity for U.S. industry was gone. So the significance of this single event from the 60s and 70s really has shaped where the U.S. government goes coming towards Antidumping and Countervailing duty. So that's why we see a very concerted effort from the Department of Commerce, Treasury, Homeland Security to take action at any point where there is a potential for goods coming into the U.S. at low cost or folks trying to evade existing Antidumping Countervailing duty orders. So the current landscape, really, just to remind folks, this is a priority trade issue for U.S. Customs and Border Protection. They have 8 priority trade issues. And really, this is #1 of the 8. CBP's job is an enforcement agency. They don't do the investigations. They don't determine duty rates, but their role is to absolutely detect and deter any efforts at circumvention of anti-dumping law. So they do try to facilitate legitimate trade. But at the same time, they're going to try to make sure that nobody gets around existing Antidumping and Countervailing duty obligations. U.S. Congress continues to believe this is an important issue. The trade facilitation and Trade Enforcement Act that was passed in 2015 and signed actually in 2016 had a whole section in the Enforce and Protect Act within the TFTEA of the Trade Facilitation Trade Enforcement Act that was focused on additional antidumping enforcement measures. So Congress continues to think this is very important to this day. Just a reminder, we've become pretty familiar about trade remedies because of the Section 301 tariffs on China, the Section 232 tariffs on steel, aluminum. This is the original trade remedy. This is used to protect U.S. industry and again, try to create a level playing field. And the final thing that we like to remind people is how these efforts at enforcement have grown. The individual cases that have been developed, if you look at the graph on the right side of your screen, you can see that we've basically gone from about 200 cases in the early in 25 years in '94 up to today, were there's well over 2,000 antidumping cases. And they range from anything from ball bearings to garlic to honey, you name it. There's an antidumping on a whole variety of different things. So hopefully, we haven't belabored this too much, but you've come to an understanding of why dumping and subsidization is important to the U.S. government. It really is at the forefront of several U.S. government agencies and certainly U.S. Congress, and it really is an important thing for us to focus on -- for us in the trade compliance sphere. So with that, I will pass off to my colleague, Madeleine and let her run and really dig into what is dumping.

Great. Thank you so much, Ted. Hello, everyone. Okay. So dumping. What do we mean by dumping? So Really, this is everyone, this is -- and this goes right back to the example that Ted just gave on the TVs. But this is when a foreign producer or foreign manufacturer is selling a product here in the United States at less than what they could sell it in their own domestic product -- own domestic market, sorry. They're selling at less than the cost of production. So again, they are selling a product in our U.S. market for a very, very, very low price. And the -- and our domestic industry cannot compete against those prices. So just like in Ted's example on the TVs, the Japanese dumped their televisions here in the U.S. and the U.S. television market could not compete. And so it was basically decimated. So that is what is meant by dumping. It's dumping a product at a very, very low price here in the U.S. and that particular domestic industry cannot compete. A lot of the -- again, there are a lot of famous dumping cases. I think Ted mentioned some of them like the ball bearings, steel, honey, garlic, shrimp, just to name a few. There are many but literally, it's selling product at a very, very low -- foreign-made product at a very, very low price here in the United States. And then on the other side -- or in addition to that, sometimes these can actually be -- you can see them together on a particular product, but we can -- we also need to look at subsidization. So Stephanie, if you can. Yes. What is a subsidy? And don't -- the subsidization is a hard word to say, try saying that 10x. But in any case, with -- in this particular case, the foreign manufacturer, foreign producer is getting some kind of financial assistance from their government. And because they're getting some kind of financial assistance, they can sell their product here in the United States for a very, very low price. And that results in countervailing. So some of the types of subsidies that a foreign government may provide a producer -- a foreign producer, are either like direct cash payments, some type of credits on their taxes, or providing some loans at terms that really don't reflect the current market. So because they're getting subsidized in that way, that foreign producer can again sell their product at a very, very low price year in the U.S., and it affects our domestic industry, again, they can't compete. Some more well-known countervailing cases where the subsidization was taking place are, for example, solar panels and also tires from China. Those are some were famous, but there are also many countervailing cases and countervailing case can exist at the same time as an antidumping case. So both can be present. And then is all -- are all subsidies countervailable. That's a tough one to say too. And the answer is no. There are some -- there is some subsidization from governments such as financial -- financing for infrastructure or for public education that's not countervailable. And again, subsidies, these kinds of subsidies have to be very specific to a certain company, industry, region, and they've got to be contingent to upon export of the goods. So how does the U.S. government determine dumping or subsidization, whether that's occurring. So there are a few different players involved, and this is the part that gets a little confusing sometimes in regards to antidumping and countervailing. As we usually -- we're used to seeing U.S. CBP, U.S. Customs and Border protection, but there's a couple of other agencies involved as well. So as Ted mentioned earlier, it all starts with U.S. industry or it can even be government, but someone is reporting a potential dumping and our subsidization case. And you have to file that particular case or petition with 2 government agencies, the U.S. department or U.S. International Trade Commission, the U.S. ITC as well as the International Trade Administration, ITA. So the whole process starts with the petition that is filed again from U.S. industry or could be another government agency. And then what happens is the ITA, they are part of the Department of Commerce, and they are the ones that will initially review the petition, and they will decide whether there's going to be an actual investigation. They will initiate the investigation if they feel that there's enough there in the petition. And they will ultimately determine whether it's dumping or whether there's subsidization going on. They'll also determine how much additional duty will be assessed, dumping and subsidization duty or countervailing duties, and they will set the scope. So that, in general, is what they are responsible for. And kind of in tandem, you have the U.S. International Trade Commission, and they'll determine the overall risk to that industry, what the current and future risk is for that industry. And then you have, of course, U.S. Customs and Border protection, and they're responsible, of course, for really enforcing the antidumping countervailing duty laws as well as making sure that they are collecting all of the antidumping and countervailing duties and that's a big -- that is something that customs are under a lot of pressure, especially from Congress to ensure that they're collecting all of those duties that are owed. And the other thing too is there is before it actually gets set, there's a lot of interplay between the ITA, the International Trade Administration and the U.S. ITC. And it's kind of like a ping pong match because there's a lot of going back and forth and to show you how that process works, I'm going to hand it off to my colleague, Stephanie, who will talk about that ping pong match.

Thanks, Madeleine. Yes. This is going to be the highlight of the preso. I can guarantee you. So as Madeleine said, this -- we're going to walk through how essentially a case becomes an order and who's involved with that? Because I think it helps demystify some of this process, and I'll try to also tie it back into Ted's examples with the TVs because that's a really good starting place just to continue to ground our information. So in the top left, I have the same color coding scheme as Madeleine's previous slide showing what we kind of call the players. And an antidumping or countervailing case is either going to get kicked off by the domestic -- U.S. domestic industry filing a petition with the ITA and the U.S. ITC or it can be self-initiated by the ITA. Let's see here. So then it's going to bounce over to the ITA. They're going to decide to pick it up. And at that point, it goes to the U.S. ITC. So this is where this ping pong match is starting. Both the U.S. ITC and the ITA are both going to make 2 choices. They're going to make a preliminary determination and then they're going to make a final determination. You're going to see both of these play out in this process. And remember, each of them have different goals. So once the U.S. ITC gets it and they're making a preliminary determination, they are looking only at determining whether the U.S. domestic industry is being harmed. That's their job. That's their only focus. So they're going to look at that and decide. Do we think that, that's the U.S. domestic industry is being harmed? 2 packs then emerge. No, so that's the negative. Like no, if they don't think upon their first pass that anybody is being harmed, the whole thing gets killed, okay? Do not pass that, nobody keeps going, it's just done. If though they say, yes, we do think there is harm and 90% actually just heard this in a different presentation, 90% of the U.S. ITC cases they do find harm. So most of the time, they are going to move to an affirmative. So yes, they're going to likely find harm. It bounces back to the ITA. At that point, now they're going to make their preliminary determination, and their job is, of course, to decide whether or not dumping and/or subsidization is happening. So it happens -- they're going to be looking at an antidumping or countervailing as Madeleine said, those can happen though at the same time. So -- or they can occur on the same product at the same time. So they're looking at that to determine whether or not that's happening, okay? So they're not concerned about is the industry being harmed? U.S. ITC has that under control. The ITA then is going to make a choice on their preliminary findings, either an affirmative or negative, okay? This one is a little bit interesting because on their preliminary, if they find that they think, yes, there is dumping or subsidization that's happening. And of course, then we've already had the U.S. ITC say, yes, we think there is something happening here. That is actually the point when customs will be instructed to start collecting duties, okay? That feels really maybe early or aggressive. But if we think back to the TV example, this whole process was really meant to make sure that different local industries were wiped out. So this happens very early on the process before an antidumping or countervailing order even gets set, okay? So once both organizations have given a tentative, yes, yes, we think something is happening here that's when duties are collected. The ITA then is going to make their final determination. At that point, if they say actually after our full review, we don't see that dumping or subsidization is occurring. The case will be killed. And any duties that were collected at that previous step will be refunded to importers, likely with interest, but it depends on the situation. If, however, though, they say, yes. We said in our preliminary yes, this is happening, and we've said in our final, yes, this is happening. It will now bounce back to the U.S. ITC, and they will make their final determination to say is U.S. domestic industry being harmed? At that point, there's those 2 roads again. If they say at that point, no, we just actually don't find that to be true, the case will be killed. Otherwise, it will move to a full order and ITA will issue that antidumping and/or countervailing order, okay? This process is actually just the start of the antidumping, what I'll say, life cycle. I grew up in the Pacific Northwest. We learned a lot about salmon life cycle. So the life cycle of an antidumping case. There are a lot of different checks in there. So even these really old cases like ball bearings, wooden bedroom furniture, they still have a regular review process. So on that far left, I called out some things that weren't accounted for in this chart, administrative reviews, changed circumstance reviews, sunset reviews. This is all getting looked at on a regular basis in both ITA and U.S. ITC need to continue to confirm that their parts are happening, right, that dumping is still occurring that the U.S. market would be harmed. Along with that, there are time frames. All pointing back to Ted's example with the TVs, they can't take years to make this happen. So from start to finish, a case can take up to about 287 days. And we're going to see an example in just a little bit where this kind of plays out and you can see those states, okay? And with that said, though, let's talk about customs. So you, as an importer and myself as a broker, it is all great that ITA and U.S. ITC is bouncing this case back and forth, but we're usually dealing with customs. So where are they at? What are they doing? So on this chart, we see them collecting money, which is absolutely key, but they do a lot of other things, too. As Ted pointed out, antidumping countervailing duties is a priority trade initiative for customs. So in the last number of years, they have done a pretty good job of really trying to help provide visibility to cases. There are a lot more cases as we showed on that chart. And importers, like yourselves need to know when these cases are coming on. Not just to adjust for duties, but there's also a lot of opportunities for you guys to participate actually in this process through your legal teams and make sure that you are a voice that's being heard. So it's not just to pay duties in the end, but you guys can actively be participating through that process as well. But to know about the cases, I would recommend signing up for CSMS messages this link. If you don't have it, it's the way that customs communicates with the trade. When they say trade, they mean all of us that are trying to make trade happen. They also have a search tool in their ACE portal. I'm going to give a demo on that in just a minute. And they're, of course, sending us as brokers ABI feeds. And this stuff is getting updated a lot. We're getting new cases. We're getting updated rates. So we get all of this visibility. Of course, they're collecting duties, their suspending and managing entry liquidation. So if you're new to the industry, those words in a sentence, you're like, "I know those words. They don't make sense together." So entry liquidation is just -- and up until the point that customs -- I always say is closing the book on an entry. So they say we can't look at that any more case closed. So with antidumping, that book stays open for a lot longer. For normal entries, they will usually liquidate those. [ My terrible ] close the book analogy in under a year, but with antidumping, it will stay open much longer. They also have to make sure that you guys all have good bonds. So when you have antidumping or countervailing introduced into your importing mix, the amount of your bond needs to go up, which only makes sense because now you're introducing a lot higher duty rates and more unpredictable duty rates. They're also going to monitor for nonreimbursement statements, and Rick is going to touch on those. And of course, they're going to communicate with all of you. So with that said, let's look at the ACE portal real quick and see what they have in there as a tool, both for brokers and importers to understand antidumping and countervailing better. So here's a view. This is in their new -- the new ACE portal. So if you just go over to resources and then click on AD/CVD, you're able to launch into this. So we're going to look at a little case study on a twist ties. Those little things you find all over, and you never have one when you need one. So twist ties is the short case. This is an antidumping case from China. And if we look here in that gold box, you see all the dates, right? So we just went through that kind of ping pong match. So you can actually orientate yourself decently. So this case got initiated on July 16, 2020, and it ended on April 14, 2021. So let's see, what did I say? It was like 287 days, I think, from start to finish. This one when I did the math was 15 days short of that. So they made the time frame but you can tell it really does take that full time sometimes to have that play out. And you can see it bounce between the parties. So the preliminary ITC was an affirmative preliminary, they use DOC for Department of Commerce, but that's the same as the ITA. DOC is just -- I say the mother ship, but it's the head of that agency. So if you give yourself a little pop quiz, if you were a broker or a broker -- a broker or an importer, bringing in twist ties what date would you have had to start paying duties? Yes. I know you all got it. December. So it was after both parties made their first affirmative decision, okay? So in this case, the case got opened in July, and you would have started paying duties 5 months later in December. Okay? This little nomenclature up here the A-570-131, let's talk about that for a minute. So this is the way a case number is structured. So it's going to start with an ARC depending on if it's antidumping or countervailing then it's going to be the country code. So across all cases, if you see A-570 or C-570, 570 means China, okay. Italy has their own code. Japan has their own number. The next 3 digits in this case, it's 131 for the commodity. We're talking about twist ties. Wood and bedroom furniture has their own code, right? Ball bearings have their own code. And if that commodity is across different countries, it will still stay the same, okay? So that's the commodity that's being looked at. And then the last 3 digits are super important 001, that is the manufacturer exporter specific code. And we're going to dive into that real quick because we haven't touched on this idea yet. So for twist ties, you can see in that gold box, we have a case ending in 000. And if you go across, you see manufacturer name and exporter name and they say all other companies, okay? Then for 001, the next one down, that's not boxed is Rongfa Plastic Products. And then we have 002, [ Tianjin Kio ] packaging supplies. I always to saying that on a webinar because I'm sure I just completely butchered the name. So those are specific manufacturers, okay? So during that process, when the ITA is trying to determine whether or not dumping or subsidization is occurring they're looking at specific manufacturers. And in fact, I think manufacturers will also work with ITA to try to show that dumping or subsidization is maybe not occurring or not occurring at the rate that other companies are experiencing. Because it will obviously give these companies a large leg up if they can get a lower rate, right, than their competitors. So in this case, if you go to the second to last column on the right, all 3 rates are the same. That's not always true, though. But 62.42% will be your antidumping rate for twist ties. If you're not importing from Rongfa Plastics or [ Tianjin Kio ], then we would use the one ending in 000, which is all other companies, anyone not specifically named or called out. okay? So one other thing I want to point out is these duty rates are in addition to the other duty rates. So just because I'm curious and because I'm a customs nerd, as Ted said, last night, I looked up the duty rates for twist ties. So there's a couple of classifications we're actually going to see that. But the main one that most people probably use is a 2.9% duty rate. Then there's 25% of Section 301 duties on that. Then you would see here, likely you would need antidumping. So that's 62% and if you need countervailing, which likely you would, that's 111%. So right now, for twist ties that's a 202% duties, okay? So antidumping and countervailing duties can be extremely significant and they are in addition to all the other duties that are being collected. As I mentioned with the HTS code, they do flag cases as part of their research for HTS numbers. The #1 thing I want to say is that this is not an exhaustive list. This gives brokers and importers kind of guidelines to know where to look and to know whether a case may or may not apply. Some products have a really good HTS list, other ones like aluminum extrusions. I've seen questions popping up. They're like, "I import this. Why does it flag for aluminum extrusions." Some products are really hard to get a good list for, so they flag many HTS numbers. However, you might have products that you need to pay and you qualify for antidumping or countervailing duties that the HTS number is not listed, okay? So this is just guidance and to help you get some direction and to help us as brokers get direction, okay? So we're asking good questions. With that said, this is a perfect transition, Rick, how do you know if antidumping or countervailing duties apply to the commodities that I import? Or they import? Or I clear whatever, pick your take there. So take it away, Rick.

All right. So that's a lot of information. So just going to take a breath here for a moment and digest all of that. So we've kind of gone over the history, and we've gone over the background. So now it's a matter of okay, what do I do now? How do I know what should I be worried about? What should I be concerned about? So we kind of broke this down into 5 steps somewhat simple. And as Ted kind of mentioned earlier, this is an intro-level class, maybe 101 level but this is really just the basics on something rather straightforward. How you can arrive at your determination. So we're going to go through these 5 starting with determining what cases are associated to what HTS goes? How do I find that out? And once I found if there is a case, where do I find the case? How do I understand the case and understand the scope or the definition of the case. And once I get that, okay, how do I make sure that my commodity fits or doesn't fit within that scope or that determination? So now I've made a decision. I got to make sure I advise my broker and update my records so that going forward, I've shown reasonable care and I've done my due diligence in making sure that these things have been determined correctly. All right. So let's jump in the first one. Stephanie just took you through the ACE portal. So that's one way to do take your commodities, take your HTS numbers and see if there are potential relevant cases, whether they're ADD or CVD for your particular commodity. Another option is you can reach out to your customs broker, it expedites your broker or another broker. The broker can look at your parts database or your historical HTS numbers that you've used and they can bounce it off what ABI shows for potential relevant cases. So we can report back to you these are the ones I would -- you need to take a look at to make sure that you've done again, your reasonable care and your due diligence to make sure these things have been reviewed. And if maybe you don't have the bandwidth or the staff or the background and just want some professional to do it, there are trade consultants that you can hire as third parties and go do that research for you. So those are the options as far okay. What cases are attached to my HTS codes. So what do I do next? All right. So let's -- we've got to go find those cases. So the website we suggest is the ITA website. You see the link there. At the end of the presentation, Ted always has a page of all the links that we've discussed. But this is the one that we would recommend, this is one that we use internally as well. So if you do go to the website, you go to ITA, they did make a recent change. It doesn't take you straight to the rulings anymore. It takes you to a site called ACCESS. There you go. Thank you. So in the orange box there, you go to ACCESS, catchy name. You see on the left, there's just registration, just an email and a password, and they will give you access into the ITA's database. So you go in there and you can look to the left. You got your AD/CVD search. So you can choose your item. We chose honey. Ted talked a lot about TVs. Honey is another historical one for you, compliance nerds out there. I've been told honey at one time was the biggest antidumping evasion scheme of U.S. and borders back about 15 years ago. Honey is a major commodity as far as concern or interest or trying to protect our local industry. But there were importers in the U.S. who evaded over $180 million of antidumping duty on honey. It sounds like a really innocuous item, but honey is a huge industry. So we're concerned about honey. So you can see some cases there listed. We clicked on the China case because the other ones were just raw honey. So this one is a little more involved and so it's going to be broken down into 3 sections. Upcoming announcements, it could be, as Stephanie said, determinations or final rulings, what's coming up for this particular case in the near future. So ITA will tell you what those are in that box. They're going to give you the potential relevant HTS numbers. So if you are importing under these HTSs your broker probably got a flag or if you went to the ACE portal, it would show on that list that, that is a potential connection to antidumping case. And then most importantly, this is the scope of the orders or the definition of this case. Some of these are a couple of sentences. Some of these are paragraphs, and you might need an engineer or a chemist or somebody who actually understands the full details of manufacturer to determine it. But in the case of honey, you can kind of take a peek here. They talk about natural money, they talk about artificial honey. It could be flavored. It needs to be 50%. Again, they mentioned the potential HTS numbers through their. And in the end, they said, well, also included -- could be a blend of honey with rice syrup. Again, most of you probably aren't honey importers. But if you were, it might be meaningful to you, and you would understand how that might play. So this is where you're going to get all the background that hopefully can help you make a determination. So what do you do next? How do you know if that scope is going to fit? So you've seen it, you've read it. Can you make a quick determination? Is it black and white? Do you understand your product well enough to go, yes or no, it fits within that scope. But hopefully, that's the case. Hopefully, it is simple. Aluminum extrusions have been mentioned a couple of times, that's not a simple one. But some are very simple like raw honey, that is a particular case. It's raw or it's not, it's pretty straightforward. But it isn't that simple. You got to do some research. You're going to need to pull your internal spec sheets, blueprint, material breakdown. You're going to have to do some research if your particular commodity fits or doesn't fit within a particular scope ruling. And can you make the argument whether it fits or doesn't fit. If there's still not enough detail or information, you're going to have to go to your network, go to your buyers, go to your internal engineers, go to your folks within the company who selected this commodity and have them help you break this down and go over the scope and look what's on this and see if, okay now do we have enough information. Still no, maybe you got to go back overseas and go to that supplier and find out where that aluminum extrusion came from or whatever that commodity may be or that component may be. Do they have enough information to help you with that? And if after you talk to all those parties, you still can't determine it. And then yes, it might be time to look for legal assistance or go to counsel and have a legal professional look at the ruling and try to help you along the way. One other option that's open to you during this whole thing, whether you want to jump in or you've done all of your research possible is you can go to the ITA and request a scope ruling. You're going to need to provide them all this information that you've gathered and all the details to your commodity but kind of similar to a customs binding ruling, you can't go to ITA and ask them for a scope ruling, does or does not my commodity fit within the scope of this ruling. So these are all options and all avenues for you to pursue. Now you've got -- in your mind, again, but yes or no, you determined that it falls or it doesn't fall? So let's say you decide, no, it's outside the scope. My commodity does not fit that description. I'm certain of it. You may have cargo that's sitting at the dock. You may have cargo that a purchase order just got filed. You got to make sure you pass that on to the brokers so that they are aware to let them know that your product is not within the scope. And we also suggest or ask that you give them a reason why. Why -- how did you arrive at that determination? It's great that you determine it's not, but it's helpful and again, shows due diligence and reasonable care that we've done that research, and we have validated it is outside the scope. And for your broker, it helps them understand your business better, right, helps them understand your commodities better. So it's a good partnership opportunity here for you guys to talk about that commodity. But if it isn't scope, okay. So now we've got those steps. As Stephanie mentioned earlier, you've got to look at your bond coverage, your surety bonds. Antidumping, countervailing can't impact your bond, you may need to increase the amount. So talk to your surety company, talk to whoever is responsible for that importers bond because we may have to make an adjustment to it. Next, okay, you got a case number. You're going to have to provide that case number to the brokers. If it's a CVD case or it's an ADD case, so you're going to give them that number. And if it's antidumping, there is a document is, again, Stephanie mentioned earlier, called a nonreimbursement statement or nonreimbursement declaration. It's basically a declaration to CBP of whether you're going to reimburse for the extra duty you're paying or not because, obviously, the government doesn't want you to be reimbursed for the penalty, then they'll just double down and they want it twice. So they want to hear that you're not being reimbursed for that, and it has to be on record. So you can file that within your ACE portal or pass a copy to your brokers so they have it on file, but that has to be on file for each commodity, each part number, each SKU, whatever you may have, however you listed, we need to have those on file. And if there is a countervailing case and an antidumping case on it, you do need to provide a reimbursement statement for both. If it's just a CVD case, you don't need a reimbursement statement. But if it is both, you need a statement for both cases. And then off to the side there, one thing to keep in mind, again, we try to keep this simple. Honey is a good simple example but there may be additional antidumping cases in Stephanie's example, the twist ties. So there was an ADD and CVD. There could be multiple ADDs, there could be multiple CVDs. So you've got to make sure your research is complete, you've checked out every potential case because there may be more than one, Okay? So we have our determination. You got to make sure you save these records. You've done the work, make sure you don't have to go do this work again. So update your parts database, whether that's an Excel spreadsheet or whether that's a freestanding or if it's your SAP or your ERP, get those case numbers added so that if that SKU or that product shows up later on that, that information is ready and loaded for you and for the broker. Make sure you include how you arrived at it. You can show that you did your reasonable care, show that you did your due diligence, keep those records, put them in there so that if this comes up or if and when it pops up for a related commodity or you're not there anymore, it's there, the records are there for the company to be protected. Make sure it gets -- they get added to your import compliance manual. That should have all the history and research that you've done to make sure you're following all the regulations in your compliance and make sure your brokers updated their SOP. So again, you've done the work, let's make sure we do it once. We did it right, report it, show the backup and have both the broker and your internal records updated. Okay. There you have it on a very simple, again, kind of entry-level 101 level. And I'm going to hand back to Ted to close it out for us.

All right. Thank you, sir. So there we go. A lot of info in 48 minutes. We did work hard data this down to the core concepts related to antidumping countervailing duty. We, quite frankly, had quite a bit more information that we wanted to convey. But this really, we took it to the point of saying, "Look, let's make this an introduction and try to give the essential information out to folks and go from there." So hopefully, we've given you that baseline of understanding of some of the key points. There are a number of resources that we mentioned during the conversation today, and there were some links on some of the slides. Again, as a reminder, if you came in late, you will be receiving a copy of this presentation. So the resource page that you have here provides links to some of the things that either Stephanie, Madeleine or Rick have talked about. So the International Trade Administration links are there, the Customs Border Protection links are there. Congressional Research Service, this -- if you're not familiar with the CRS, this is a group of scholars, economists, lawyers, et cetera, who actually support U.S. Congress, and they write a number of interesting papers on anything and everything, not just trade related, but anything that U.S. Congress is trying to weigh in on. And as we've talked about the U.S. Congress is very interested in protecting U.S. manufacturers, U.S. business. So consequently, antidumping countervailing duty is important to them. So they -- the CRS Congressional Research Services has written a couple of papers, specific on antidumping, countervailing and then also in general, there are just a couple of pages. They give you a nice intro again, an understanding to what these items are. So again, somewhat similar to this webinar, you could pull up one of those papers to take a look. We've talked about -- Rick talked about if you are a customer of ours, how can we help you? We are more than happy to take your entire product database and run an analysis and look for HTS numbers that might flag for antidumping or something related countervailing duty that can come up. Absolutely, if we are in the process of preparing a customs declaration for your goods and they do flag in the system for antidumping countervailing duty, I assure you that we will reach out to you if you haven't provided any information or guidance like Rick talked about after you've done your work on this, so you certainly will be hearing from us. Question came up on the chat about consultants. We've mentioned the idea that you may want to reach out to qualified trade compliance expertise to help you along the way. We do have a wholly owned subsidiary called Tradewin that can certainly assist you. They are -- that's their whole job is great compliance consulting and they can assist in this. Expeditors also maintains a suite of trade compliance management solutions under our Trade Flow group, and they have specific parts database support related to antidumping countervailing duty. So another option there as it goes. Next thing will close with our final slide is just we have worked this year to really try to support those of you who are certified custom specialists under the NCBFAA Educational Institute under their CCS program, their Certified Custom Specialist Program. So for those of you who are in that program, this webinar has been approved for one continuing education unit request or request credit. Here's the completion codes on the screen. Again, you don't have to frantically screen print, we will -- you'll get a copy of this presentation. So hopefully, this will help support you in meeting your continuing education requirements. So at this point, we tried to answer questions flying at us as we were going along through the webinar. I know that Stephanie has flagged the AI question as something that she wanted to answer live. So Stephanie, I'm going to let you lead off and see if we can grab a couple of the remaining questions for our group here.

Yes, absolutely. Thank you, Ted. So by all means, if you have any other questions, throw them in the chat box, we have been keeping up though, which could also us for hopefully answering your questions as you send them in. So I'll pose this to the group. Of course, AI has become an explosive topic across all industries in the last few months. So do we see AI playing a significant role in antidumping and/or countervailing duties? And are we using AI or do we know people using AI in our industry for this right now? So Ted, do you want hit it, kick that off?

I thought you wanted to answer that. So AI actually is a very interesting AI, artificial intelligence, machine learning, robotic processing, all of that cool stuff is a very hot topic in our trade compliance world these days. And customs and border protection, who is absolutely critical in this has not really weighed in on what they think is appropriate use of AI in the import export compliance world. I would say right now, at this point, U.S. CBP still believes human being should be involved in the resolution of questions related to trade compliance, not just related to antidumping countervailing duty. But any other questions related to classification, the harmonized tariff schedule, appropriate valuation. All of those things that as importers that we're obligated to do under 19 U.S.C. 1484 and exercising reasonable care. And by the same token for us as customs brokers, we have our own statutes and regulations we have to abide by. So I think it's going to take a little bit before CBP officially says, yes, we bless the use of AI. That being said, there's no question there are a number of folks out in the trade compliance tech world that are actively using AI and developing tools around it. So there are certainly tech solutions that are out there that do use artificial intelligence to get to classification, to get to -- and tied to that, they certainly could get to antidumping countervailing duty guidance. So again, yes, there are tools out there that are already appearing in the marketplace and also being used for things like forced labor enforcement, things along that line. So all I would say is that AI has not been officially blessed by CBP. And at the end of the day, they are the final arbiter of how we work in the import space. So I would just be cautious to not completely rely on it.