CBP Official Speaks on Textile Enforcement at WESCCON
The Pacific Coast Council of Customs Brokers and Freight Forwarders Associations held its annual Western Cargo Conference (WESCCON) on October 19-21, 2006 in Irvine, CA, during which officials from U.S. Customs and Border Protection (CBP) spoke.
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Highlights of remarks by Janet Labuda, Director, Textile Enforcement and Operations Division, CBP, include the following:
Enforcement Focus Unchanging
The Textile and Wearing Apparel Industry has been and will continue to be a priority trade issue. Enforcement has been focused in the following areas:
Origin Fraud
Illegal Transshipment
Quota Circumvention
Inadmissibility of Merchandise
Special enforcement operations initiated by CBP pertain to: China misdescription, Korea Illegal transshipment, Indonesia illegal transshipment, and Philippines illegal transshipment.
Major Issues
Misdescription of merchandise to avoid quota and duty. Undercover investigation exposed organizations based in Hong Kong that declared $46 million in textile and apparel goods as furniture from China in order to circumvent quota and duty. Bogus companies were discovered, also goods were misdeclared as ramie to avoid quota.
Landed duty paid transactions: Landed duty paid, or delivered duty paid transactions, are under scrutiny. These transactions entail middlemen acting as importers, with ultimate consignees buying from a "domestic" supplier. If the importer turns out to be fake it looks like the traditional importer/retailer who is the ultimate consignee was trying to distance himself from the transaction to avoid importer responsibility. Warning: be careful, know your suppliers.
Ghost factories. CBP discovered factories that existed only on paper. Goods shipped to the US as made in Thailand are suspected as country of origin China. On this issue, CBP requested redeliveries for shipments valued at $3.2 million entered between March and May 2006.
Counterfeit Russia and Philippines certificates of origin. A country of origin certificate is not a requirement but if a false certificate is present, such as a false certificate stating origin is Russia or the Philippines, it is seen as an indicator that points to a false commercial invoice.
Free Trade Agreements/Trade Preference Enforcement. CBP is completing targeted verifications and has discovered a 37% non-compliance rate and collected an additional $1.7 million in revenues.
When claiming Free Trade Agreement preference, be sure to have all production documents in order. Examples of problems noted include the following: sewing date is prior to cutting date (chronologically impossible); goods are claiming African Growth and Opportunity Act (AGOA) but were shipped from Singapore (geographically implausible). Basically, if the story told by the documents doesn't make sense, that will attract attention.