CUSTOMS UNVEILS LIST OF TRANSSHIPPING FIRMS

Byline: Jennifer Owens

WASHINGTON — In compiling its semiannual list of foreign companies found to be transshipping, U.S. Customs has added one name and removed another. The list once again adds up to 14 companies that have been contacted and served penalty notices.
Published Tuesday in the Federal Register, the list adds Jentex Industrial of Taipei, Taiwan, and removes Hangzhou Tongda Textile Group of Hangzhou, China.
Other firms include four Hong Kong companies — Bestraight Ltd., Hanin Garment Factory, Hip Hing Thread Co. and Topstyle Ltd. — and three Chinese companies — Li Xing Garment Co., Meiya Garment Manufacturers Ltd. and Yunnan Provincial Textiles Import & Export.
There are also three Indian companies — Cotton Breeze International, Poshak International and United Fashions — and two Taiwan companies: Hyattex Industrial Co. and Jentex Industrial. Rounding out the list are Azmat Bangladesh of Bangladesh and Meigao Jamaica Co. Ltd. of Jamaica.
In addition, Customs also published the names of 40 companies suspected of transshipping but which Customs has been unable to confirm because they have not been able to make contact. The companies are based in countries ranging from China and India to the Dominican Republic and Togo.
Seth Bodner, executive director of the National Knitwear & Sportswear Association, a longtime opponent of transshipping, said he was not surprised by which countries were represented on the list.
Bodner said that what is surprising, however, is how few companies have made the list since its first appearance in October 1995. Once on the list, companies remain for three years, although they can petition for removal.
“When you hear about how much transshipping is going on and you see a dozen or so names, you wonder what’s going on,” Bodner said. “There must be more people playing these games. But then again, it doesn’t take a whole lot of companies to generate a lot of business.”
Companies that make the list and are verified receive a penalty notice from Customs, but the burden actually rests on importers. Customs has warned that importers found dealing in transshipped merchandise from one of the listed companies stand a better chance of being found negligent themselves. If found negligent, the importers are subject to heavy penalties and seizure of goods.
“It has a pretty severe effect on the people who are named, since there is this heavy burden on importers,” Bodner said.
Importers initially supported the list, asking Customs to make public information on transshipping companies that it had previously kept confidential. But Laura Jones, executive director of the U.S. Association of Importers of Textiles and Apparel, argued on Tuesday that the list’s current form doesn’t do importers much good.
“The list is meaningless, because they don’t tell people what these companies are guilty of,” she said.
According to the Uruguay Round legislation, which created the list in 1994, foreign manufacturers are placed on the transshipment list if they have used or provided false documentation for country of origin, used counterfeit visas, manufactured goods that are falsely labeled, or engaged or aided in transshipments.
Brenda Jacobs, USAITA’s counsel, said importers would rather the list included each infraction next to the company’s name. As it stands now, she said, “this list doesn’t tell us much about the companies.” She added. “Was it a negligence issue or a fraud issue? That’s what we need to know.”
In its current state, said Jacobs, the list “gives us too many questions to ask and doesn’t tell us which direction to go.”
Richard Crichton, an international trade manager for Customs, said many companies appearing on the list have run afoul of both counterfeit visa and transshipping laws. He added, though, that other government initiatives, such as the Electronic Visa Information System (ELVIS), are reducing the number of companies appearing on the list for solely counterfeit visa infractions.
“We have eliminated most of the counterfeit visas through ELVIS,” Crichton said. “It’s not perfect, but it’s getting better. Most of the future ones [on the list] are going to be for transshipments.”

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