u.s. customs and border protection textiles

27
U.S. Customs and Border U.S. Customs and Border Protection Protection Textiles Textiles Department of Homeland Security Customs and Border Protection July July 2006 2006

Upload: ryan-bell

Post on 30-Dec-2015

40 views

Category:

Documents


0 download

DESCRIPTION

Department of Homeland Security  Customs and Border Protection. U.S. Customs and Border Protection Textiles. July 2006. Department of Homeland Security  Customs and Border Protection. The Textile Import Industry. Total Imports = $ 1.9 Trillion - PowerPoint PPT Presentation

TRANSCRIPT

Page 1: U.S. Customs and Border Protection Textiles

U.S. Customs and Border U.S. Customs and Border ProtectionProtection

TextilesTextiles

Department of Homeland Security Customs and Border Protection

July July 20062006

                                                            

Page 2: U.S. Customs and Border Protection Textiles

The Textile Import The Textile Import IndustryIndustry

Department of Homeland Security Customs and Border Protection

2

Total Imports = $ 1.9 TrillionTotal Imports = $ 1.9 TrillionTextile Products = 43% of all Duties CollectedTextile Products = 43% of all Duties CollectedTotal Duties = $25 BillionTotal Duties = $25 BillionAverage Duty Rate 16%Average Duty Rate 16% *K = Thousand

M = Million B = Billion

CY 2001 CY 2002 CY 2003 CY 2004 CY2005% CHG

CY01-05Importers 56.9K* 60.8K 62.1K 63.5K 73.6K 29%Lines 5.1M 5.8M 6.2M 6.7M 7.7M 51%Value $71.4B $75.7B $83.4B $91.2B $100.3B 40%Duty $8.2B $8.2B $8.7B $9.1B $10.1B 23%

Page 3: U.S. Customs and Border Protection Textiles

3

Department of Homeland Security Customs and Border Protection

Columbus TradeColumbus Trade

2005 Lines Entered in Columbus

75,04521%

279,30379%

Textiles All Other Commodities

Page 4: U.S. Customs and Border Protection Textiles

4

Department of Homeland Security Customs and Border Protection

Columbus TradeColumbus Trade

2005 Value Entered in Columbus

$1.8 billion23%

$6.1 billion77%

Textiles All Other Commodities

Page 5: U.S. Customs and Border Protection Textiles

5

Department of Homeland Security Customs and Border Protection

Columbus TradeColumbus Trade

2005 Duty Paid in Columbus

$135 million36%

$242 million64%

Textiles All Other Commodities

Page 6: U.S. Customs and Border Protection Textiles

6

Department of Homeland Security Customs and Border Protection

Textile Supplier Textile Supplier CountriesCountries

ValueValue

• ChinaChina• MexicoMexico• IndiaIndia• Hong KongHong Kong• IndonesiaIndonesia• PakistanPakistan• CanadaCanada• VietnamVietnam• HondurasHonduras• BangladeshBangladesh

VolumeVolume

• ChinaChina• Mexico• Pakistan• Canada• India• Korea• Indonesia• Bangladesh• Honduras• Taiwan

Page 7: U.S. Customs and Border Protection Textiles

7

Department of Homeland Security Customs and Border Protection

January 1, 2005 and January 1, 2005 and BeyondBeyond

• Quota Eliminated for all WTO Quota Eliminated for all WTO Member Nations EXCEPT Member Nations EXCEPT ChinaChina

• Safeguard Mechanism Safeguard Mechanism Replaced by Comprehensive Replaced by Comprehensive Quota AgreementQuota Agreement

• Textile Bilaterals ExpiredTextile Bilaterals Expired• Authority to Conduct TPVTs Authority to Conduct TPVTs

ExpireExpire• MOUs (HK and Macao)MOUs (HK and Macao)

• Enforcement Focus Enforcement Focus UnchangingUnchanging

Page 8: U.S. Customs and Border Protection Textiles

8

Department of Homeland Security Customs and Border Protection

January 1, 2005 and January 1, 2005 and BeyondBeyond• Changes to the RegulationsChanges to the Regulations

• Elimination of the Paper Elimination of the Paper Textile DeclarationTextile Declaration• Allows Electronic Filing of Entries;Allows Electronic Filing of Entries;• Changes to the Construction of the Changes to the Construction of the

Manufacturer Identification CodeManufacturer Identification Code• The Entity that Performed the The Entity that Performed the

Origin Conferring ProcessOrigin Conferring Process• Not the Trading House, the Not the Trading House, the

Shipper, etc.Shipper, etc.

• Remote Location FilingRemote Location Filing• Working on the Informal Working on the Informal

Value Limits/Not Revenue Value Limits/Not Revenue NeutralNeutral

Page 9: U.S. Customs and Border Protection Textiles

9

Department of Homeland Security Customs and Border Protection

Textile Enforcement Textile Enforcement FocusFocus• Textiles and Wearing Apparel Textiles and Wearing Apparel

Designated As a Priority Trade Issue Designated As a Priority Trade Issue for FY 06for FY 06

• Enforcement FocusEnforcement Focus• Origin Fraud; Illegal Transshipment; Quota Origin Fraud; Illegal Transshipment; Quota

Circumvention; Inadmissibility of MerchandiseCircumvention; Inadmissibility of Merchandise• Enforcement of Various Legislative Trade Enforcement of Various Legislative Trade

Initiatives and Free Trade Agreement Preference Initiatives and Free Trade Agreement Preference ClaimsClaims

• Protection of the RevenueProtection of the Revenue

• 5 Year Enforcement Strategy to 5 Year Enforcement Strategy to CongressCongress

Page 10: U.S. Customs and Border Protection Textiles

10

Department of Homeland Security Customs and Border Protection

Textile Enforcement Textile Enforcement FocusFocus

• RisksRisks• FTA and other Trade LegislationFTA and other Trade Legislation

• $22.4 Billion in Trade Preference $22.4 Billion in Trade Preference Claims out of a Universe of $100.3 Claims out of a Universe of $100.3 Billion in ImportsBillion in Imports

•China QuotaChina Quota• Illegal TransshipmentIllegal Transshipment• Misdescription of MerchandiseMisdescription of Merchandise• Smuggling; Unmanifested GoodsSmuggling; Unmanifested Goods

•General Misdescription to Avoid General Misdescription to Avoid Duties and QuotaDuties and Quota• 43% of Duties Collected Involve 43% of Duties Collected Involve

Textile GoodsTextile Goods

Page 11: U.S. Customs and Border Protection Textiles

11

Department of Homeland Security Customs and Border Protection

Textile Enforcement Textile Enforcement FocusFocus

• FTA ActivityFTA Activity•Morocco Implemented on January 1, 2006Morocco Implemented on January 1, 2006•CAFTA El Salvador Implemented on February 1; CAFTA El Salvador Implemented on February 1;

Nicaragua and Honduras April 1, 2006; Nicaragua and Honduras April 1, 2006; Guatemala, July 1, 2006Guatemala, July 1, 2006

• Thailand, ANDEAN Countries, Panama, UAE and Thailand, ANDEAN Countries, Panama, UAE and SACU in NegotiationSACU in Negotiation

•Bahrain and Oman CompletedBahrain and Oman Completed•South Korea and Malaysia Negotiations StartedSouth Korea and Malaysia Negotiations Started

Page 12: U.S. Customs and Border Protection Textiles

12

Department of Homeland Security Customs and Border Protection

Enforcement IssuesEnforcement Issues• Free Trade Agreement Free Trade Agreement

EnforcementEnforcement• 2,164 Lines Valued at $66.4M 2,164 Lines Valued at $66.4M

ReviewedReviewed• 563 or 28% Found to Be Non-563 or 28% Found to Be Non-

CompliantCompliant• $1.2 M in Additional Revenue $1.2 M in Additional Revenue

RecoveredRecovered• NAFTA Accounted for 79% of NAFTA Accounted for 79% of

Revenues Recovered; CBTPA Revenues Recovered; CBTPA Accounted for 13%Accounted for 13%

• Preference Claims Value $22.4 B in Preference Claims Value $22.4 B in 20052005

Page 13: U.S. Customs and Border Protection Textiles

13

Department of Homeland Security Customs and Border Protection

TrainingTraining

• Free Trade Agreement Free Trade Agreement Training InitiativeTraining Initiative• New York, Miami, Los Angeles New York, Miami, Los Angeles

and Atlanta and Atlanta • 90% of Import Specialists 90% of Import Specialists

Processing Textile FTA Goods Processing Textile FTA Goods Have Been Trained this Calendar Have Been Trained this Calendar YearYear

• Extensive Training Materials Extensive Training Materials Have Been Prepared Have Been Prepared

Page 14: U.S. Customs and Border Protection Textiles

14

Department of Homeland Security Customs and Border Protection

Textile Enforcement Textile Enforcement FocusFocus

• Chinese QuotasChinese Quotas• U.S. Government Has Negotiated a U.S. Government Has Negotiated a

Comprehensive Agreement which Comprehensive Agreement which Became Effective on January 1, 2006; Became Effective on January 1, 2006; Expires December 31, 2008Expires December 31, 2008

• U.S. and China Resurrected ELVIS LinksU.S. and China Resurrected ELVIS Links• China Issues a Paper Visa and a Certificate of China Issues a Paper Visa and a Certificate of

OriginOrigin• Will Only Be Provided to CBP Upon Making Will Only Be Provided to CBP Upon Making

the Request to the Importerthe Request to the Importer

Page 15: U.S. Customs and Border Protection Textiles

15

Department of Homeland Security Customs and Border Protection

Textile Production Verification Textile Production Verification TeamsTeams

• Since October 2005 TPVTS Were Since October 2005 TPVTS Were Conducted in:Conducted in:• Hong KongHong Kong• MacaoMacao• SwazilandSwaziland• VietnamVietnam• EgyptEgypt• MauritiusMauritius• South AfricaSouth Africa• ThailandThailand• KenyaKenya

Page 16: U.S. Customs and Border Protection Textiles

16

Department of Homeland Security Customs and Border Protection

Textile Production Verification Textile Production Verification TeamsTeams• November 2005 Visit to Hong November 2005 Visit to Hong

KongKong• 167 Factories Targeted167 Factories Targeted• 65 Closed65 Closed• 24 Refused Admission24 Refused Admission• 46 High-Risk Designation46 High-Risk Designation• 3 Evidence of Transshipment3 Evidence of Transshipment

• December 2005 Visit to MacaoDecember 2005 Visit to Macao• 28 Factories Targeted28 Factories Targeted• 5 Closed5 Closed• 3 High-Risk Designation3 High-Risk Designation

Page 17: U.S. Customs and Border Protection Textiles

17

Department of Homeland Security Customs and Border Protection

Textile Production Verification Textile Production Verification TeamsTeams• Seizure of Goods from Closed Seizure of Goods from Closed

FactoriesFactories• $2.6 Million to Date$2.6 Million to Date

• Production Records Being Production Records Being Requested on Previous Shipments Requested on Previous Shipments Involving $38.3 Million in ValueInvolving $38.3 Million in Value

• Penalties Being PursuedPenalties Being Pursued• Since October 2005 More than $42 Since October 2005 More than $42

Million SeizedMillion Seized

Page 18: U.S. Customs and Border Protection Textiles

18

Department of Homeland Security Customs and Border Protection

Textile Textile EnforcementEnforcement

• Audit of Textile Importers FY Audit of Textile Importers FY 20052005• 42 Audits Completed42 Audits Completed• 34 Had Positive Enforcement 34 Had Positive Enforcement

FindingsFindings• $4.97 Million in Additional $4.97 Million in Additional

Revenues CollectedRevenues Collected• Classification Errors $928,831Classification Errors $928,831• Singapore FTA Findings Singapore FTA Findings

$43,265$43,265• Caribbean Basin Trade Caribbean Basin Trade

Partnership Act $510,944Partnership Act $510,944

Page 19: U.S. Customs and Border Protection Textiles

19

Department of Homeland Security Customs and Border Protection

Common Broker Common Broker ErrorsErrors• Incorrect ISO CodesIncorrect ISO Codes• Incorrect Construction of the Incorrect Construction of the

Manufacturer Identification Manufacturer Identification Code (MID)Code (MID)

• Incorrect Country of OriginIncorrect Country of Origin• BrasBras

• Incorrect Entry TypesIncorrect Entry Types• 01s Instead of 02s01s Instead of 02s

Page 20: U.S. Customs and Border Protection Textiles

20

Department of Homeland Security Customs and Border Protection

Common Broker Common Broker ErrorsErrors

• Just Because a Product Was Just Because a Product Was Exported from an FTA or Exported from an FTA or Trade Preference Country Trade Preference Country Doesn’t Make It Eligible for Doesn’t Make It Eligible for Duty-Free TreatmentDuty-Free Treatment

• Don’t Rely Solely on the Bill Don’t Rely Solely on the Bill of Lading/Review All of Lading/Review All Documents Presented For Documents Presented For EntryEntry

• Learn to ReadLearn to Read

Page 21: U.S. Customs and Border Protection Textiles

21

Department of Homeland Security Customs and Border Protection

Enforcement IssuesEnforcement Issues

• A Search of Chapters 50-63, A Search of Chapters 50-63, for Jan 2004 - July 2005 for Jan 2004 - July 2005 Revealed $84 Million in Revealed $84 Million in Imports. Imports.

• $18.5 Million, or 22% of that $18.5 Million, or 22% of that Value Reveals a Mismatch Value Reveals a Mismatch between Country of Origin and between Country of Origin and Country of Export or MID Country of Export or MID Origin. Origin.

• Over $1 Million Shows Over $1 Million Shows Obvious Admissibility Issues.Obvious Admissibility Issues.

Page 22: U.S. Customs and Border Protection Textiles

22

Department of Homeland Security Customs and Border Protection

Enforcement IssuesEnforcement Issues• Filing of Incorrect EntriesFiling of Incorrect Entries• 02 Quota/Paper Entries Continue to 02 Quota/Paper Entries Continue to

Be Required for the Following:Be Required for the Following:• AGOA PreferenceAGOA Preference• Tariff Preference Level Claims in Tariff Preference Level Claims in

NAFTA, CAFTA, Chile, Singapore and NAFTA, CAFTA, Chile, Singapore and Morocco FTAsMorocco FTAs

• China Comprehensive Quota China Comprehensive Quota AgreementAgreement

• CBTPA & ATPDEA Claims under the CapCBTPA & ATPDEA Claims under the Cap• Non-WTO Country Imports e.g. VietnamNon-WTO Country Imports e.g. Vietnam• Worsted Wool (Chapter 99)Worsted Wool (Chapter 99)

Page 23: U.S. Customs and Border Protection Textiles

23

Department of Homeland Security Customs and Border Protection

Textile Textile EnforcementEnforcement• Operation “X”Operation “X”

• 5 Days over a 5 Week Period (Nov-Dec. 5 Days over a 5 Week Period (Nov-Dec. 2005)2005)

• 2,121 Additional Examinations of Goods 2,121 Additional Examinations of Goods Claiming Country of Origin China; Focus Claiming Country of Origin China; Focus on Misdescriptionon Misdescription

• 131 Violations Found131 Violations Found• 63 Incorrect Country of Origin Declared63 Incorrect Country of Origin Declared• 23 Incorrect Information on Manifest23 Incorrect Information on Manifest• 22 Incorrect Classification of Goods22 Incorrect Classification of Goods• 4 Intellectual Property Rights Violations4 Intellectual Property Rights Violations• 4 Health and Safety Violations4 Health and Safety Violations• 3 Incorrect Quantities Declared3 Incorrect Quantities Declared• 1 Smuggling, etc.1 Smuggling, etc.

• Violations Totaled $2.5 Million in ValueViolations Totaled $2.5 Million in Value• 5 Seizures Totaling $88,4415 Seizures Totaling $88,441• 7 Penalties Being Pursued7 Penalties Being Pursued

Page 24: U.S. Customs and Border Protection Textiles

24

Department of Homeland Security Customs and Border Protection

Enforcement IssuesEnforcement Issues

• Misdescription/Misdescription/Misclassification of Imported Misclassification of Imported ProductsProducts• Ramie vs. Cotton and Manmade Ramie vs. Cotton and Manmade

Fiber ProductsFiber Products• Circumvents Chinese Quota RestraintsCircumvents Chinese Quota Restraints• Ramie 0-2% Duty RateRamie 0-2% Duty Rate• Cotton 16% Duty RateCotton 16% Duty Rate• Manmade 32% Duty RateManmade 32% Duty Rate

• Loss in Duties Exceeds $12 MillionLoss in Duties Exceeds $12 Million• 68 Bogus Companies in the Mix to 68 Bogus Companies in the Mix to

Defraud the Government and Defraud the Government and Evade QuotasEvade Quotas

Page 25: U.S. Customs and Border Protection Textiles

25

Department of Homeland Security Customs and Border Protection

DetentionsDetentions• Policy Is Not Set In StonePolicy Is Not Set In Stone• Each Transaction Stands on Its OwnEach Transaction Stands on Its Own

•Generally:Generally:• 4 Compliant Reviews and the Manufacturer 4 Compliant Reviews and the Manufacturer

is Removed from Scrutinyis Removed from Scrutiny• Manufacturer May Have Problems with One Manufacturer May Have Problems with One

Importer and Not Another; Compliant Importer and Not Another; Compliant Importer May Be Removed From Further Importer May Be Removed From Further Scrutiny Scrutiny

• Information from other Sources e.g. Foreign Information from other Sources e.g. Foreign Government May Cause Removal of Government May Cause Removal of Manufacturer Immediately from Further Manufacturer Immediately from Further ScrutinyScrutiny

Page 26: U.S. Customs and Border Protection Textiles

26

Department of Homeland Security Customs and Border Protection

CAFTA Implementation IssuesCAFTA Implementation Issues

• USTR Announced El Salvador Receiving USTR Announced El Salvador Receiving CAFTA Retroactive Benefits on March 6, CAFTA Retroactive Benefits on March 6, 2006 Ref. 71 FR 11235; Honduras and 2006 Ref. 71 FR 11235; Honduras and Nicaragua Added in AprilNicaragua Added in April

• CBP Publishes Interim Regulation on CBP Publishes Interim Regulation on March 7, 2006 Ref 71 FR 11304March 7, 2006 Ref 71 FR 11304

• Required DocumentsRequired Documents• Pursuant to the LegislationPursuant to the Legislation

• CBP Can Locate the Entry or the Entry Can Be CBP Can Locate the Entry or the Entry Can Be Reconstructed;Reconstructed;

• Satisfies the Conditions of Preferential Satisfies the Conditions of Preferential Treatment Under CAFTATreatment Under CAFTA

Page 27: U.S. Customs and Border Protection Textiles

27

Department of Homeland Security Customs and Border Protection

CAFTA Implementation IssuesCAFTA Implementation Issues

• Time LimitsTime Limits•By December 31, 2006 , or 90 Days By December 31, 2006 , or 90 Days

after the Date of Entry into Force for after the Date of Entry into Force for that Country;that Country;

•Being Changed to “90 Days after Last Being Changed to “90 Days after Last Country Enters into Force”.Country Enters into Force”.