NEW YORK — The U.S. Customs Service is investigating a smuggling incident in which $500 million worth of apparel entered the country through West Coast ports and evaded duties, according to an official with the service.
This story first appeared in the November 21, 2002 issue of WWD. Subscribe Today.
At a meeting Wednesday of the U.S. Association of Importers of Textiles & Apparel and the American Import Shippers’ Association, Janet Labuda, director of Custom’s Textile Enforcement and Operations division, said the agency had recently discovered a “major circumvention of our in-bond systems,” a reference to the systems the service uses to collect tariffs on goods coming into the country.
She said the containers filled with smuggled goods entered the U.S. through Los Angeles ports with forged documents indicating they were to be shipped to Mexico or points south. Instead, they remained in the U.S., allowing the shippers to evade more than $60 million in duties.
Labuda declined to offer further information on the investigation. However, she said that as a result of the discovery, Customs would step up its focus on smuggling in the apparel industry. The agency, which is also charged with investigating trade-related issues like the illegal transshipment of imported goods through third-party nations — has seen its profile and responsibilities increase in the 14 months since the Sept. 11 attacks, which caused the federal government to rethink the risk posed by the thousands of cargo containers that enter the U.S. each year.
One of service’s major apparel-related initiatives since then has been the Customs-Trade Partnership Against Terrorism, an effort to better track what is inside of cargo containers shipped to the U.S. to avoid the nightmarish scenario that could arise should terrorists use a cargo container to smuggle operatives or weapons of mass destruction into the country.
However, collecting duties is also a key responsibility of the agency, which is currently a part of the Treasury Department, but is expected to be merged into the upcoming Department of Homeland Security. Customs Commissioner Robert Bonner, who also spoke at the event, held at the Marriott Marquis Hotel in Manhattan, said about 45 percent of the $20 billion in duties collected each year comes from imports of textile and apparel products.