US removes levy on Indian shrimp

Giving a major relief to the Indian shrimp exporters, the US Customs & Border Protection (CBP) has recently withdrawn the customs bond requirement imposed in 2004. According to a CBP notice, the enhanced bond requirement (EBR) on shrimp items from India and Thailand stands fully withdrawn, effective April 1.

The notification said that the existing bonds for seafood export would be terminated henceforth. The latest notification is in line with a World Trade Organisation (WTO) ruling issued in favour of India and Thailand in 2008.

During the first week of March, the US Department of Commerce (DoC) had reduced the anti-dumping duty on Indian shrimp to 0.79 per cent from 1.69 per cent.

The US had imposed bond requirement to curb the menace of dumping of cheap shrimp and shrimp products from India and other countries. As per the US Customs order, exporters had to pay an amount equal to $50,000, or 10 per cent of the previous year’s duties paid by an exporter.

This was exorbitantly high and hindered exports from these countries. India and Thailand had vehemently opposed this levy, terming it as a protectionist measure and very much against the global trade practices. The EBR was imposed in addition to the anti-dumping duty and the two factors together had made exports to America practically impossible.

On April 24, 2006, Thailand had lodged a complaint with WTO against EBR. A dispute settlement panel was appointed by WTO to look into the issue. India also went to the WTO in June 2006. Both the countries argued that the imposition of the exorbitantly high EBR had breached several provisions of General Agreement on Tariffs and Trade (GATT) and the WTO agreement.

The WTO panel adopted the reports of an expert panel and an appellate body and categorically declared that EBR was against the provisions of WTO and GATT, and should be withdrawn.