By  on March 11, 1994

WASHINGTON -- Administration officials told House Textile Caucus Chairman John Spratt (D., S.C.) Thursday that President Clinton's promises for more Customs inspectors to prevent abuses in textile trade would be kept, and noted that recent investigations have shown that abuses of textile quota laws are not as bad as feared.

In a hearing before the Subcommittee on Commerce, Consumer and Monetary Affairs, which Spratt chairs, Ronald K. Noble, assistant treasury secretary for enforcement, told Spratt, "The President and the administration are fully committed to fulfilling our promises."

In a November letter to Spratt, Clinton promised that Customs would increase its spending on textile enforcement by $15 million, adding 50 new employees on NAFTA textile enforcement and 50 more to address worldwide textile trade concerns. The President's budget plan subsequently requested $18 million for the additional workers, but linked the increased spending to a hike in the General Merchandise Fee paid by importers.

Customs Commissioner George Weise assured Spratt under questioning that the spending hike would likely not be dependent on the fee increase. The addition of 100 Customs personnel would increase the number of full-time employees on textile trade enforcement to 520, Weise said.

Weise also said recent investigations of apparel trade at ports in Los Angeles, San Francisco and New York showed that quota compliance rates averaged 95 percent among shipments inspected. The inspections, which Weise described as "snapshots," also showed a potential tariff revenue loss of less than 1 percent.

"That's better than we thought," Weise said. "We're doing a good job, but we could do better."

Spratt recommended that penalties for fraudulent shipments extend to retailers and importers, and pointed to the recent probe of the Gitano Group as an example of how "successful prosecutions can have broad impact."

In December, the company and three former officers pleaded guilty to felony charges that they schemed to evade import quotas. The jeanswear giant's largest customer, Wal-Mart Stores, subsequently stopped sourcing from Gitano because of its Customs violations. The company has since been sold and Wal-Mart has resumed its business relationship.

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