U.S. BAN ENDANGERS SOURCING PROGRAMS
Byline: Jim Ostroff
WASHINGTON — Retail and import industry officials are fretting that a U.S. move to ban the importing of textiles from an Indonesian maker — allegedly for transshipping — signals a new policy that could endanger sourcing programs worldwide.
“This is a real problem for any company that imports” apparel or textiles, said Erik Autor, the National Retail Federation’s vice president and international trade counsel. “The last thing [retailers] want is to get caught with goods on the water and suddenly find they can’t come in because allegations have been made against an offshore company.”
At issue is an Oct. 20 notice issued by the Committee for the Implementation of Textile Agreements barring the importation of products made by Pt. Pollux Indonesia Textile Industry for two years, effective Nov. 20. The notice said the action was taken after the U.S. Customs Service “informed CITA that this company was found to have been illegally transshipping, closed or unable to produce records to verify production.”
In recent years, this interagency group has cited dozens of apparel and textile makers in Hong Kong and Macao for similar situations, but dropped some of the companies from the permanent import ban after several protested they were denied due course.
Of 76 Macao makers CITA cited in 1999, 50 turned out to be closed and five other companies later were removed from the import ban list. Two of these makers filed Freedom of Information requests to obtain Customs records of its evaluation of makers’ operations. The records showed no evidence that the firms had engaged in transshipment, but they apparently were not able to produce the records demanded by Customs and its Macao counterpart during an inspection, sources said.
Carlos Moore, the American Textile Manufacturers Institute’s executive vice president, said U.S. textile mills are “pleased that CITA has taken this action against one [Indonesian] company for illegally transshipping into the U.S.”
Moore said that China “more than likely was the source” of Chinese textiles diverted to the suspect Indonesian maker.”
“We hope CITA will continue its efforts in Hong Kong and Macao as well,” he said, “as both are registering enormous growth in their shipments to the U.S. of textiles and apparel, which seem to be generated by the Chinese.”
Richard Steinkamp, the Commerce Department’s deputy assistant secretary for textiles, apparel and consumer goods, and CITA’s acting chairman, said Customs cited Pt. Pollux “for transshipment issues,” but declined to elaborate.
Steinkamp denied there was any political motivation for issuing the import ban three weeks before the presidential election and added that CITA has not embarked on a new policy to ferret out transshippers worldwide.
“Transshipment doesn’t know any particular borders+and under my tenure we will identify transshipment issues wherever they arise,” said Steinkamp, who was appointed to the Commerce post this past summer.
He said that import bans such as the one against the Indonesian firm “has a future prophylactic effect” that puts foreign makers on notice that the U.S. will not abide by illegal transshipment. “It’s an attempt on our part to be transparent” on enforcement activities, he added.
Steinkamp said importers and U.S. apparel firms were advised of the pending Indonesia action, but averred they could not be clued in until recently.
“I don’t know why any law enforcement agency would give advance notice of its enforcement activities,” adding that inspections by Customs “jump teams” were coordinated with Indonesian customs officials who also participated in the shop visits. Customs sends in “jump teams” to inspect textile and apparel companies in cooperation with foreign governments.
Importers have not been comforted by such explanations and rekindled the charge that CITA operates like the CIA.
“It is taking these actions without prior consultation with the importing community and never has told us the reasons” the U.S. has summarily barred apparel and textile imports from some offshore suppliers, said Julia Hughes, Washington vice president of the U.S. Association of Importers of Textiles and Apparel.
Hughes said that if a maker was first cited for failure to produce records requested by Customs “this would help U.S. companies verify production and monitor shipments from their suppliers, instead of suddenly finding a company” barred from the American market.