New Textile Enforcement Bill Expected to be Introduced Next Week
The National Council of Textile Organizations has issued a fact sheet on the Textile Enforcement and Security Act of 2010 (TESA), a new bill that is expected to be introduced in Congress during the week beginning May 24, 2010.
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Domestics Want Illegal Textile Trafficking in CAFTA Region Addressed
NCTO states that the domestic textile industry has noticed a sharp increase in illegal textile product trafficking in the CAFTA region1, which is hurting domestic exports, as three quarters of the U.S. industry’s $13 billion in textile product exports goes to trade preference countries, notably CAFTA, NAFTA and the ANDEAN regions.
TESA Provisions Could be Included in Customs Reauthorization Bill
NCTO believes that the Customs reauthorization bill could be amended by the TESA provisions to enhance U.S. Customs and Border Protection’s textile enforcement efforts in a way that also enhances trade facilitation, through improved targeting, increased resources, and enhanced authority.
NCTO states that the TESA provisions would:
- Use penalty proceeds for investigations. Direct the Department of Homeland Security and Department of Treasury to use amounts from the fines and penalties collected from import violations for textiles and apparel to 1) pay for expenses directly related to investigations and 2) reward any person who furnished information on the import violations. This is based on a existing successful program to battle customs fraud for the fisheries industry.
- Establish electronic tracking program. Instruct the U.S. government to establish an electronic verification program that tracks yarn and fabric inputs in free trade agreements.
- Add textile specialists. Increase the number of import specialists trained in textile and apparel verifications at the 15 largest U.S. ports (by value) that process textile and apparel imports. Many textile and apparel trained specialists are currently assigned to low volume textile and apparel ports.
- Assign CBP staff to CAFTA, China. Direct CBP to assign operations staff to three CAFTA-DR countries and the People’s Republic of China for the purposes of in country training and preference verification of textile and apparel products.
- Retarget CBP toward verification. Increase staff positions at Textile and Apparel Policy and Programs division in CBP headquarters and retarget them toward trade preference verifications. Headquarters staff has been significantly reduced over the last five years.
- Start nonresident importer program. Establish a Nonresident Importer Program that ensures the resident agent is held accountable for fraudulent activity involving textile and apparel imports, should the nonresident importer be inaccessible.
- Open DOJ textile office. Establish an Office of Textile and Apparel Trade Enforcement within the Department of Justice to carry out all the functions relating to enforcement cases.
- Clarify CBP seizure authority. Clarify that CBP has the authority to seize textile and apparel goods imported under Trade Preference Areas and Free Trade Agreements rules, if fraudulent.
- Adjust bond levels. Adjust bond requirements for high risk importers of textile and apparel goods.
- Make supply chain accountable. Broaden the scope of entities held accountable in the supply chain for intentionally undervalued transactions.
- Publish names of violators. Mandate the government publish names of companies that intentionally violate the rules of textile and apparel trade agreements.
- Increase information on affidavits. Decrease the use of fraudulent ‘blanket’ affidavits’ by requiring additional information on affidavits for textiles and apparel imports.
1For example, NCTO states that last year, the government reported that nearly twice as much “U.S.” combed cotton yarn was exported from the U.S. to the CAFTA region than was actually produced. In addition, a number of “phony companies” have created websites purporting to produce U.S. yarns and fabrics for use in the CAFTA region but CBP has been unable to move effectively against them. In addition, recent information from Mexico shows that up to a third of denim jeans which claim NAFTA origin may be made of Chinese fabric.
NCTO Fact Sheet available by sending email to documents@brokerpower.com