December 17, 2007
On December 13, 2007, Customs and Border Protection (CBP) issued a press release on the results of its textile enforcement strategy on imports of high risk textiles and apparel for 2007 (http://www.cbp.gov/xp/cgov/newsroom/news_releases/archives/
2007_news_releases/122007/12132007_2.xml). In its press release, CBP said:
- In FY 2007 it increased foreign factory visits by 57%.CBP visited 671 foreign factories to monitor for illegal transshipment by sending textile production verification teams (TPVT) to confirm actual country of origin and compliance with trade preference programs.These teams examine production documents at foreign factories to ensure that potentially violative shipments are stopped before being shipped to the United States.
- CBP visited 168 foreign factories in 10 countries in FY 2007 to verify claims involving Free Trade Agreements, like the Central America - Dominican Republic Free Trade Agreement, and other trade preference programs, such as the African Growth and Opportunity Act.
- CBP auditors conducted 66 audits on textile importers and recommended additional revenue collections of $5.61 million in FY 2007 (about $84,000 each)- an increase of 57% in audit activity.
- CBP officers at the ports of entry examined 13,327 shipments in FY 2007 and found more than 2,300 shipments where discrepancies were identified.
- Further, Import Specialists initiated 1,905 reviews of entry documents resulting in 959 detained shipments and 314 seized shipments worth $48.1 million for violations of China quota restraints.
- CBP also initiated 68 actions totaling $50.1 million in penalties for commercial fraud.
According to CBP, it will continue this robust enforcement effort in 2008, focusing on textile quota evasion and improper claims for duty-free preference using Free Trade Agreements and other trade preference programs.
From Customs’ statistics, it is clear that much work is still needed by importers with respect to the determination of proper country of origin and classification of textile goods.Importers of textiles and apparel products should expect the same number or an increase in TPV activity by Customs in 2008 as well as more foreign factory audits of imports of apparel products with claims for FTA treatment.
Importers may avoid many of the penalties, seizures or exclusion of goods discussed above by implementing procedures to verify the tariff classification of textile and apparel products before they are imported as well as require suppliers to maintain and provide better documentation with regard to the origin or eligibility of apparel products for FTA treatment.This includes better tracking of purchasing and sourcing records, as well as employee and production records, to substantiate that the goods were produced in that location.Under Customs’ regulations (19 CFR 141.113(b)) it may conduct a post import origin verification of textile and apparel products for up to 6 months following the date of release of the goods and require redelivery within that time if the importer fails to provide CBP with sufficient evidence of origin.If the importer cannot redeliver the goods, liquidated damages in the amount of the goods are assessed.Under its detention policy, Customs may also detain and eventually exclude goods prior to importation if the foreign supplier is the subject of a textile production verification review, and the supplier cannot provide sufficient information to verify the origin of the merchandise.
The Law Offices of George R Tuttle provides training, consulting, and advice to U.S. and foreign companies on the proper tariff classification, valuation and origin of imported goods, with an emphasis on electronics and apparel products.The firm also assists importers who are the subject of a Customs audit; wish to implement a trade compliance program; or have goods that are the subject of detentions, seizures, or compliance investigations.The firm also actively assists clients in the preparation and submission of Prior Disclosures as a means of limiting penalties.For more information on how we can assist your company, please visit our website at http://www.tuttlelaw.com/, or contact George Tuttle, III at (415) 986-8780 or firstname.lastname@example.org.
George R. Tuttle, III is an attorney 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.
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 © 2007 by Tuttle Law Offices.
All rights reserved. Information has been obtained from sources believed to be reliable. However, because of the possibility of human or mechanical error by our offices or by others, we do not guarantee the accuracy, adequacy, or completeness of any information and are not responsible for any errors, omissions, or for the results obtained from the use of such information.