U.S. Customs and Border Protection Textile Issues

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U.S. Customs and Border ProtectionTextile Issues
Department of Homeland Security ? Customs
and Border Protection
NCBFAA Washington September 21, 2005
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The Textile Import Industry
Department of Homeland Security ? Customs
and Border Protection
Total Imports 1.3 Trillion Textile Products
43 of all Duties Collected Total Duties 21
Billion Average Duty Rate is 16
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Life After Quota

• Paperless Entries
• Mainstreaming the Industry
• Remote Location Filing
• Post Entry Enforcement
• Integrated Products Emphasis on Correct
  Classification, Descriptions Value
• Revenue Issues
• Largest Loss of Duties Involves Textiles and FTA
  Non-Compliance

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Life After Quota

• Shift in Enforcement Posture to FTA Compliance
• Cooperation Requirements Lapse
• No Factory Visits in the Foreign Location Except
  as Negotiated Under the FTAs
• Unilateral Enforcement
• Safeguard Actions Will Continue to Play a Key
  Role in the Enforcement Portfolio

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Life After Quota

• Overhaul of 12.130 Regulations
• Has Been Completed
• Should Be Published as Interim Regulations
  Shortly
• Change in the Manufacturer ID
• Required to Construct the Manufacturer ID Using
  that Entity which Did the Origin Conferring
  Process

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Enforcement Priorities

• China Safeguards
• Still Require 02 Live Entry
• U.S. Asking China to Issue Visas
• Will Review Targeted Entries to Ensure Compliance
• Compliance Drops By-Pass May Be Selectively
  Eliminated for Other Countries

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China Safeguards

• The Debacle
• 1st Set of Safeguards
• Overshipments of Safeguard Bras other Products
• Documents Reviewed Were Correct/Entries Were Not
• ABI Input into ACS by Broker Incorrect
• Penalties for Brokers and Importers

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China Safeguards

• The Debacle
• 2nd Safeguard--Socks
• 01 Entries Instead of 02 Entries Filed by the
  Brokers
• 22 Million in Value
• 6-7 Million Dozen Pair
• Incorrect Entries Filed at 54 Ports

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Enforcement Priorities

• 02 Quota/Paper Entries Continue to Be Required
  for the Following
• AGOA Preference
• Tariff Preference Level Claims in NAFTA and Chile
• China Safeguards
• CBTPA ATPDEA Claims under the Cap
• Non-WTO Country Imports e.g. Vietnam
• Worsted Wool (Chapter 99)

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Enforcement Highlights 2004

• Free Trade Agreement Enforcement
• 1995 Lines Valued at 55.5M Were Reviewed
• 890 or 48 Were Found to Be Non-Compliant
• 3.4 M in Additional Revenue Recovered
• NAFTA Accounted for over 50 of Discrepancies
  100 of TPL Claims Reviewed Were Non-Compliant
• There Were Preference Claims Valued at
  Approximately 21 Billion in 2004

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Enforcement Issues

• Incorrect Countries of Origin
• Major Mistakes in the Use of ISO Codes by the
  Broker
• Incorrect Descriptions of Merchandise
• If Your Client Always Brings in a Particular Type
  of Merchandise and Now with Safeguards There is a
  Change from the Usual Merchandise to a
  non-safeguard Product Check the Accuracy e.g.
  Adult Socks vs. Baby Socks
• Incorrect Classification
• Using the Trading House Information to
  Incorrectly Determine Country of Origin

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Enforcement Issues

• A Search of Chapters 50-63, for Jan 2004 - July
  2005 Revealed 84 Million in Imports.
• 18.5 Million, or 22 of that Value Reveals a
  Mismatch between Country of Origin and Country of
  Export or MID Origin.
• Over 1 Million Shows Obvious Admissibility
  Issues.