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Customs To Conduct New “Document Accuracy Test” For Type 01 Imports of Textiles Goods and Apparel

February 12, 2004

According to a memo released by the U.S. Association of Importers of Textile and Apparel, U.S. Customs and Border Protection (CBP) will, starting sometime in March, conduct a “document accuracy test” of imports of textiles, goods, and apparel that are entered as quota and visa-free using entry type 01 (probably focusing on categories 350 and 650). The purpose of the test is to assess the accuracy and quality of the entry information related to classification, value, and country of origin.

Customs ran a similar “test” in June of 2003, but for textiles and apparel goods subject to quota and/or visa requirements (entry type 02). Then, Customs found that of the 80,000 entries examined, approximately 10,500 (13%) had to be rejected due to errors pertaining to mis-description, misclassification, etc. Of the 10,500 entries rejected, approximately 1,200 were the subject of an enforcement action (e.g., detention, exclusion, seizure, etc.), and $1.2 million in additional revenue was recovered.

During the new document accuracy test, CBP is expected to be looking for counterfeit or inaccurate documents (e.g., mis-description, misclassification, etc.), unreported assists and supplemental payments, and inaccurate country of origin declarations.

Normally Paperless Entries to Require Paper Submissions During New Test

Paper filings of type 01 entries to be required during test. As type 01 entries, the textiles and apparel goods are normally eligible for paperless release; however, it is expected that CBP will require paper filings during the document test period.

According to the USA-ITA, CBP is still determining how best to conduct the test (e.g., which ports to select and the duration), and CBP has said that the test will be announced in advance.

What Importers Can Do To Reduce Delays and Detentions

While it is not possible to completely avoid potential delays caused when an entry is selected for the “document accuracy test,” importers and brokers can take a number of steps to reduce the delay and the risk of detentions or penalties. Most importantly:

            Prescreen all invoices and other customs documents (single or multi-country origin declarations) for accuracy of product descriptions, quantities, and values before presentation to Customs.

            Confirm tariff classifications. Provide your broker with fabric requirements and cutting instructions and have your broker compare your specifications to Customs classification rulings to verify classification.

            Verify declared value. Often, the commercial invoice will not accurately reflect all elements of value. Remember to declare assists, supplemental payments to the assembler/exporter, third parties vendors and any commissions paid to buying or selling agents, whether dutiable or not.

            Document Country of Origin. The failure to properly declare country of origin can result in the detention and possible exclusion of merchandise. Imports of textiles and apparel goods are required to be accompanied by single or multi-country origin declarations completed by the supplier and verified by the importer. The country of origin rules for textile and apparel products (found in 120 of the Customs Regulations), however, can be difficult to understand, and errors can happen. To avoid possibility country of origin problems, importers should take steps to verify the origin of their goods, and make certain that suppliers have readily available:

o       Procurement and receiving records for fabric or yarn and trim from mills and suppliers, and

o       Factory production records including original cutting and sewing records or tickets; production or individual work orders.

Remember, Customs can make a demand for redelivery of a textile article at any time during the 180-day conditional release period allowed under 141.113(b). Additional documentation requirements for verification of country of origin can be found in Customs TBT-97-049, dated April 28, 1997, and on Customs web site at http://www.cbp.gov/trade/priority-issues/textiles. Civil penalties under 19 U.S.C. 1592 can also be assessed if an importer does not have evidence available to validate the classification, value, or country of origin declared.

The Law Offices of George R. Tuttle specialize in Customs, tariffs, and international trade matters include the classification, valuation, and origin of textile and apparel goods. If you have any questions on this matter please visit our web site at http://www.tuttlelaw.com/ or for more information contact George Tuttle, III at geo@tuttlelaw.com or at (415) 288-0428 or Steve Spraitzar at sss@tuttlelaw.com, or at (415) 288-0427.

George Tuttle, III and Stephen Spraitzar are attorneys with the Law Offices of George R. Tuttle in San Francisco. The information in this article is general in nature and is not intended to constitute legal advice or to create an attorney-client relationship with respect to any event or occurrence, and may not be considered as such.

Copyright 2005 by Tuttle Law Offices.

All rights reserved. Information has been obtained from sources believed to be reliable. However, because of the possibility of human or mechanical error by our offices or by others, we do not guarantee the accuracy, adequacy, or completeness of any information and are not responsible for any errors, omissions, or for the results obtained from the use of such information.

 

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