February 12, 2004
to a memo released by the U.S. Association of Importers of Textile
and Apparel, U.S. Customs and Border Protection (CBP) will, starting
sometime in March, conduct a “document accuracy test”
of imports of textiles, goods, and apparel that are entered as
quota and visa-free using entry type 01 (probably focusing on
categories 350 and 650). The purpose of the test is to assess
the accuracy and quality of the entry information related to classification,
value, and country of origin.
Customs ran a similar
“test” in June of 2003, but for textiles and apparel goods subject to quota
and/or visa requirements (entry type 02). Then, Customs found that of the
80,000 entries examined, approximately 10,500 (13%) had to be rejected
due to errors pertaining to mis-description, misclassification, etc. Of the
10,500 entries rejected, approximately 1,200 were the subject of an enforcement
action (e.g., detention, exclusion, seizure, etc.), and $1.2 million
in additional revenue was recovered.
During the new document
accuracy test, CBP is expected to be looking for counterfeit or inaccurate
documents (e.g., mis-description, misclassification, etc.), unreported
assists and supplemental payments, and inaccurate country of origin declarations.
Paperless Entries to Require Paper Submissions During New Test
Paper filings of type 01 entries to be required during test. As type 01 entries, the textiles and apparel goods are normally eligible
for paperless release; however, it is expected that CBP will require paper
filings during the document test period.
to the USA-ITA, CBP is still determining how best to conduct the
test (e.g., which ports to select and the duration), and
CBP has said that the test will be announced in advance.
Importers Can Do To Reduce Delays and Detentions
While it is not possible
to completely avoid potential delays caused when an entry is selected for
the “document accuracy test,” importers and brokers can take a number of steps
to reduce the delay and the risk of detentions or penalties. Most importantly:
all invoices and
other customs documents (single or multi-country origin declarations)
for accuracy of product descriptions, quantities, and values before
presentation to Customs.
Confirm tariff classifications.
Provide your broker with fabric requirements and cutting instructions and
have your broker compare your specifications to Customs classification rulings
to verify classification.
Verify declared value.
Often, the commercial invoice will not accurately reflect all elements of
value. Remember to declare assists, supplemental payments to the assembler/exporter,
third parties vendors and any commissions paid to buying or selling agents,
whether dutiable or not.
of Origin. The failure
to properly declare country of origin can result in the detention
and possible exclusion of merchandise. Imports of textiles and
apparel goods are required to be accompanied by single or multi-country
origin declarations completed by the supplier and verified by
the importer. The country of origin rules for textile and apparel
products (found in §120
of the Customs Regulations), however, can be difficult to understand,
and errors can happen. To avoid possibility country of origin
problems, importers should take steps to verify the origin of
their goods, and make certain that suppliers have readily available:
Procurement and receiving
records for fabric or yarn and trim from mills and suppliers, and
Factory production records
including original cutting and sewing records or tickets; production or individual
Customs can make a demand for redelivery of a textile article
at any time during the 180-day conditional release period allowed
under §141.113(b). Additional documentation requirements for
verification of country of origin can be found in Customs TBT-97-049,
dated April 28, 1997, and on Customs web site at http://www.customs.ustreas.gov/xp/cgov/trade/trade_programs
Civil penalties under 19 U.S.C. §1592 can also be assessed if
an importer does not have evidence available to validate the classification,
value, or country of origin declared.
Law Offices of George R. Tuttle specialize in Customs, tariffs,
and international trade matters include the classification, valuation,
and origin of textile and apparel goods. If you have any questions
on this matter please visit our web site at http://www.tuttlelaw.com/ or for more information
contact George Tuttle, III at firstname.lastname@example.org
or at (415) 288-0428 or Steve Spraitzar at email@example.com,
or at (415) 288-0427.
Tuttle, III and Stephen Spraitzar 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.