October 11, 2005
As of October 5, 2005, the Textile Declaration (the Textile Single and Multiple Country of Origin Declarations) is no longer required for entries of textiles from all countries, including those currently subject to Safeguards or quota/visa requirements.
CBP now requires the importer of textile and apparel products to construct a valid manufacturer's identification code ("MID"), based upon the name and address of the manufacturer performing the operation that confers origin on the textile and apparel product under section 102.21 or 102.22. The appendix to the interim regulations sets forth the methodology to construct the MID.
This change imposes new obligations on the importer to exercise reasonable care to insure the correctness of the MID code where the textile or apparel is made in multi countries.
Publication of Interim Regulations
On October 5, 2005, CBP published an interim regulation to update, restructure and consolidate the regulations relating to the country of origin of textile and apparel products in C.F.R. §§ 12.130 through 12.132 in the Federal Register (70 FR 58009).
Section 102.21 sets forth the rules to determine the origin of all imported textile and apparel products, with the exception of Israel.
Section 102.22 sets forth the rules of origin to determine the origin of the textile and apparel products of Israel when made of materials produced or derived from, or processed in another country or insular possession of the United States in additional to Israel.
Section 102.23 sets forth the new requirements to identify the country of origin, and replaces sections 12.130-12.132.
Section 102.24 provides for split shipments arriving on the same day, and the denial of entry for products for manufacturers found to be illegally transshipped, closed, or unable to produce records.
Section 102.26 sets forth the NAFTA requirements for TPLs.
For products with a NAFTA preferential claim involving non-originating textile or apparel products subject to the tariff preference levels, a Certificate of Eligibility completed as signed by an authorized official of the Canadian or Mexican government must be presented to CBP. If the port director is unable to determine the country of origin, the preferential tariff treatment or any other benefit under NAFTA will be denied.
The MID Identifies The Country of Origin
The MID must be used on all entry documents, including CBP Form 3461 (Entry/Immediate Delivery Permit), and CBP Form 7501 (Entry Summary), and in all electronic transmissions.
CBP states that the MID will assist in verifying the country of origin of the imported textile and apparel products, as CBP is responsible for determining the origin of these products and preventing goods with a false country of origin from entering the United States.
The new requirements apply to all products and all countries, including the PRC Safeguard products.
The method of preparing the MID is set forth in the Appendix to Part 102 of the regulations "Rules of Constructing the Manufacture Identification Code (MID)".
The Requirement to Exercise Reasonable Care to Identify Origin, And The Authority of The Port Director to Request Additional Information
New Section 102.23 sets forth the requirements applicable to textile and apparel products from all countries. Under subsection (a), the importer must be able to demonstrate to CBP its use of reasonable care to determine the MID. If incorrect, the port director may reject the entry or take other appropriate action, which could include civil penalties under Section 1592.
Under subsection (b), if the port director is unable to determine the country of origin of a textile or apparel product, the importer must submit additional information as requested by the port director. Release of the product from CBP custody will be denied until a determination of the country of origin is made on the information provided, or the best information available.
The High Level of Reasonable Care Imposed On Importers
To exercise reasonable care under Section 102.23, we recommend that importers have documentation in their files identifying the process of manufacture of each of the garments by the manufacturer, particularly those involving multi-country production. In some transactions, the goods may be produced in more than one country, and/or the importer may not be aware that the exporter is not the manufacturer. Hence, at the time of placing the order, the importer should request identification of the manufacturer, the origin of the fabrics, and the work performed by the company identified as the manufacturer, on which the MID will be based.
Without documentary evidence, importers will not have a basis to establish the existence of reasonable care, and could be subject to potential penalties for the incorrect MID provided to CBP.
Comment Period by December 5, 2005
Before adopting the interim regulations of the final rule, Headquarters will allow comments from the general public including state, local and tribal governments, on the "clarity of the interim regulations and how they may be made easier to understand".
If you have any questions regarding these interim regulations, or these recommendations, please contact Steve Spraitzar at (415) 288-0427 or firstname.lastname@example.org, or George Tuttle at (415) 288-0425 or email@example.com.
Stephen Spraitzar and George R. Tuttle are attorneys with the Law Offices of George R. Tuttle in San Francisco. The information in this article is general in nature, and is not intended to constitute legal advice or to create an attorney-client relationship with respect to any event or occurrence, and may not be considered as such.
Copyright © 2006 by Tuttle Law Offices.
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