By  on March 30, 1994

WASHINGTON -- In its drive to combat transshipments, U.S. Customs wants to extend to 180 days the time it has to recall suspect textile and apparel shipments, and importers are furious.

"They know full well that people don't keep goods 180 days," said Laura Jones, executive director of the U.S. Association of Importers of Textiles and Apparel. "That means in six months they can ask for a sample or the whole shipment to be returned. It's outrageous."

Under current regulations, Customs has 30 days after a shipment has entered the country to ask the importer to "redeliver" to a Customs office goods it suspects has been transshipped. Such suspicions can arise during post-entry paperwork.

If an importer is unable to redeliver the goods, he or she is liable for "liquidated damages" -- the cost of the shipment plus its duty.

The proposed change is due to be published today in the Federal Register, with requests for public comment within 60 days.

A Customs official said the agency in most cases can't get information fast enough to do necessary investigations in 30 days. Under current rules, no penalty can be levied if a redelivery notice is not received by the importer within 30 days of getting the imports.

Jones and others in the import community accused Customs of acting out of political motives -- to mollify the domestic textile industry.

"They are singling us [textile and apparel importers] out as a group," she said. "It's harassment of the industry." Larry Martin, director of government relations for the American Apparel Manufacturers Association, said his group was not involved in the drafting of the rules and would not comment until he has read them.

Clinton Stack, president of International Development Systems Inc., a group that tracks textile trade, criticized Customs for not being able to get through its paperwork more quickly.

"Customs has everything computerized; it should be more efficient at spotting those eligible for a redelivery notice," he said.

The rule notes that the liquidated damages "are designed to be compensatory rather than punitive."

Jones already has sent a letter to Customs Commissioner George Weise, criticizing him for not seeking comment from importers before publishing the proposals. Her organization plans to file official comments to the proposal "and we'll try and get it changed."Two other Customs Service rules are expected to be published today. The first, which also calls for public comment, will require an importer who does not prepare a shipment's entry documents to submit a statement declaring that "he has used reasonable care to ascertain the true country of origin of the imported merchandise and to verify the accuracy" of the documents.

Importers said the requirement is too vague because it gives no concrete guidelines or examples of steps an importer can take to satisfy the "reasonable care" standard.

The rule states that an importer "should not be allowed to submit a declaration to Customs on blind faith as to its accuracy, and without running the risk of incurring a penalty for doing so, merely for the reason that the declaration was prepared by another party....On the other hand, Customs also recognizes that where a...declaration is prepared by a manufacturer, producer or exporter, the importer may not always be privy to the facts necessary to verify with absolute certainty."

Customs officials explained an example of exercising reasonable care would be if the importer asked to see a certificate of origin from the foreign supplier. The agency will likely make the rule more specific if comments convincingly complain it is too vague.

The third rule, which goes into effect Friday, adds transshipping to the Service's list of "aggravating factors" used to determine penalties for import violations. Each aggravating factor -- another example is obstructing a customs investigation -- is used to offset one "mitigating factor," such as inexperience on the part of the importer, when determining the final penalty.

John Pellegrini, a lawyer with Ross & Hardies and counsel to USAITA, said this rule would have little if any real effect because "as a practical matter transshipment cases already are treated more harshly than others."

This rule goes into effect without waiting for public comments because it merely is being added to the agency's policy guidelines; it does not have the status of a regulation.

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