CSMS Message: 01-000360

TO : ALL ABI BROKERS.

FROM : SALVATORE INGRASS

SUBJECT : FABRIC INTERVENTION

DATE : 03/16/2001

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AUTHOR: SALVATORE INGRASSIA
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TO: ALL ABI BROKERS.
FROM: SALVATORE INGRASSIA
SUBJECT: -MARKING AND CLASSIFICATION FOR FABRIC

FABRIC INTERVENTION

THE NEW YORK STRATEGIC TRADE CENTER (NYSTC) BEGAN AN
INTERVENTION FOCUSING ON CLASSIFICATION AND MARKING FOR THE
TEXTILE PRIMARY FOCUS INDUSTRY (PFI) IN MARCH 2001, SPECIFICALLY
TARGETING THE NON-COMPLIANCE OF THE FABRIC INDUSTRY. THE PURPOSE
IS TO CALL ATTENTION TO A PATTERN OF DISCREPANCIES AND
NON-COMPLIANCE INVOLVING CLASSIFICATION AND MARKING WITHIN THE
FABRIC INDUSTRY. THE LETTERS DISCUSS THE PATTERNS OF
NON-COMPLIANCE FOUND NATIONWIDE, AND URGE IMPORTERS TO ENSURE
THEIR INDIVIDUAL TRANSACTIONS ARE FREE FROM THESE ERRORS. THE
LETTER ALSO REQUESTS EACH IMPORTER SEND A COPY OF THE LETTER TO
THEIR BROKERS, FILERS, AND ANY OTHER INTERESTED PARTIES.

INFORMED COMPLIANCE LETTERS HAVE BEEN DISTRIBUTED BY THE NYSTC
TO THE TOP 500 FIRMS THAT FILED ENTRY IN THE FABRIC INDUSTRY.
ONE HUNDRED AND TWENTY DAYS AFTER ISSUANCE OF THE INFORMED
COMPLIANCE LETTERS, THE NYSTC WILL BEGIN A MONITORING PHASE.
THIS PHASE WILL INVOLVE A QUARTERLY REVIEW OF ALL DISCREPANT
FINDINGS (COMPLIANCE MEASUREMENT, TARGETED CARGO AND ENTRY
SUMMARY) WITHIN THE FABRIC INDUSTRY. ANY IMPORTER FOUND TO HAVE
REPEATED DISCREPANCIES, WHICH HAVE BEEN OUTLINED IN THE INITIAL
LETTER, MAY BE REFERRED FOR THE APPROPRIATE FOLLOW-UP ACTION.

FOR FURTHER INFORMATION CONCERNING THIS MATTER, PLEASE CONTACT
INTERNATIONAL TRADE SPECIALIST SALVATORE INGRASSIA AT THE NEW
YORK STRATEGIC TRADE CENTER AT (212) 637-7732.

DEAR SIR OR MADAM:

THE PURPOSE OF THIS LETTER IS TO CALL YOUR ATTENTION TO A
PATTERN OF DISCREPANCIES AND NON-COMPLIANCE INVOLVING THE
CLASSIFICATION AND MARKING OF FABRIC WITHIN THE TEXTILE PRIMARY
FOCUS INDUSTRY (PFI). THE SUBJECT MERCHANDISE WAS CLASSIFIED IN
THE 1999 HARMONIZED TARIFF SCHEDULE OF THE UNITED STATES (HTSUS)
UNDER HEADINGS 5007, 5111-5113, 5208-5212, 5309-5311, 5407-5408,
5512-5516, 5801-5806, 5809, 5901-5907, 5911.20.3000, 6001-6002.
ANALYSIS OF THE TEXTILE PFI HAS DETERMINED THAT CLASSIFICATION
AND MARKING ERRORS WERE WIDE SPREAD AND ACCOUNTED FOR 65 OF THE
DISCREPANCIES UNDER THESE HEADINGS. IN 1999, THESE DISCREPANCIES
HAVE CONTRIBUTED TO AN UNACCEPTABLE NATIONAL COMPLIANCE RATE OF
ONLY 78.28 FOR FABRIC, WHICH IS BY FAR THE LOWEST IN THE
TEXTILE PFI. TO REMEDY THIS SITUATION, WE ARE ADVISING ALL
SIGNIFICANT IMPORTERS FILING ENTRY UNDER HEADINGS 5007,
5111-5113, 5208-5212, 5309-5311, 5407-5408, 5512-5516,
5801-5806, 5809, 5901-5907, 5911.20.3000, 6001-6002 OF THIS
PROBLEM IN ORDER TO ALLEVIATE ANY MISUNDERSTANDINGS THAT MAY
EXIST IN THE TRADE REGARDING THIS COMMODITY.

U.S. CUSTOMS RECORDS FOR 1999 IDENTIFY YOUR FIRM AS THE IMPORTER
OF RECORD FOR TEXTILES IN THE FABRIC SUB-INDUSTRY. UNDER 19
U.S.C. 1484, IT IS THE RESPONSIBILITY OF THE IMPORTER OF RECORD
TO EXERCISE "REASONABLE CARE" AND PRESENT THEIR CUSTOMS ENTRIES
WITH THE PROPER DECLARED VALUE, CLASSIFICATION AND RATE OF DUTY
AND TAKE ALL STEPS NECESSARY TO ENSURE COMPLIANCE. THE IMPORTER
OF RECORD WILL FILE WITH THE CUSTOMS SERVICE SUCH INFORMATION AS
IS NECESSARY TO ENABLE THE SERVICE TO PROPERLY ASSESS DUTIES,
COLLECT ACCURATE STATISTICS, AND DETERMINE WHETHER ANY OTHER
APPLICABLE REQUIREMENT OF THE LAW IS MET. IMPORTERS SHOULD NOT
RELY EXCLUSIVELY ON THEIR CUSTOMHOUSE BROKER TO PROCESS THEIR
IMPORTS. ACCORDING TO THE "REASONABLE CARE CHECKLIST" PUBLISHED
IN THE FEDERAL REGISTER (VOL. 62, PAGE 48340, DATED SEPTEMBER
15, 1997), IF THE ENTRY DOCUMENTATION IS PREPARED OUTSIDE OF
YOUR ORGANIZATION, YOUR COMPANY SHOULD HAVE A RELIABLE SYSTEM IN
PLACE WHICH ENSURES THAT:
* COPIES OF INFORMATION SUBMITTED TO U.S. CUSTOMS ARE RECEIVED
BY YOUR OFFICE
* INFORMATION SUBMITTED TO U.S. CUSTOMS IS REVIEWED FOR
ACCURACY
* CUSTOMS IS TIMELY APPRISED OF ANY NEEDED CORRECTIONS.
NON-COMPLIANCE OFTEN RESULTS WHEN AN IMPORTER FAILS TO HAVE A
RESPONSIBLE AND KNOWLEDGEABLE INDIVIDUAL WITHIN THE IMPORTER'S
ORGANIZATION REVIEW THE CUSTOMS DOCUMENTATION PREPARED ON BEHALF
OF THE IMPORTER BY THEIR CUSTOMHOUSE BROKER.

RESEARCH CONDUCTED BY THE NEW YORK STRATEGIC TRADE CENTER HAS
IDENTIFIED SEVERAL SIGNIFICANT PATTERNS OF DISCREPANCIES.
IMPORTERS ARE REMINDED OF THE FOLLOWING CUSTOM REGULATIONS FOR
CLASSIFYING AND MARKING ARTICLES OF FABRIC.

(1) SECTIONS 304 (A) AND (B) OF THE TARIFF ACT OF 1930,
AS AMENDED (19 U.S.C. 1304 (A) AND (B)) REQUIRES EVERY
ARTICLE OR THEIR CONTAINERS, UNLESS EXCEPTED, OF FOREIGN
ORIGIN IMPORTED INTO THE UNITED STATES TO BE MARKED IN A
CONSPICUOUS PLACE AS LEGIBLY, INDELIBLY, AND PERMANENTLY
IN SUCH MANNER TO INDICATE TO AN ULTIMATE PURCHASER IN
THE UNITED STATES THE ENGLISH NAME OF THE COUNTRY OF
ORIGIN OF THE ARTICLE. THE COUNTRY OF ORIGIN MARKING
REQUIREMENTS ARE SET OUT IN PART OF 134, COUNTRY OF
ORIGIN MARKING, OF THE CUSTOMS REGULATIONS (19 C.F.R.
134). AN ESSENTIAL COMPONENT TO CORRECTLY MARK TEXTILE
PRODUCTS IS FIRST DETERMINING THE COUNTRY OF ORIGIN. THE
REGULATIONS GOVERNING THESE RULES ARE CONTAINED IN PART
102, RULES OF ORIGIN, SUBPART B, OF THE CUSTOMS
REGULATIONS (19 C.F.R. 102.11).

(2) UNDER CUSTOMS REGULATION (19 C.F.R. 134.35), MUCH OF
THE FABRIC THAT IS IMPORTED INTO THE UNITED STATES CAN BE
EXCEPTED FROM MARKING REQUIREMENTS BECAUSE IT IS IMPORTED
BY OR SOLD TO MANUFACTURERS WHO WILL USE IT TO MAKE OTHER
GOODS. THE OUTERMOST CONTAINERS OF THE IMPORTED ARTICLE
SHOULD BE MARKED IN ACCORDANCE WITH THIS SECTION. IT IS
RECOMMENDED THAT ALL REQUESTS FOR MARKING EXCEPTIONS BE
PRESENTED WITH THE ENTRY PACKAGE AT THE TIME OF RELEASE.
THIS PRACTICE WILL HELP AVOID ANY UNNECESSARY DELAYS IN
THE RELEASE OF MERCHANDISE.

(3) IMPORTERS ARE REMINDED OF ADDITIONAL LAWS ENFORCED BY
U.S. CUSTOMS. THE FEDERAL TRADE COMMISSION'S (FTC)
IMPLEMENTING RULES (16 C.F.R. 303), INCLUDE ADDITIONAL
MARKING REQUIREMENTS FOR TEXTILE PRODUCTS. THESE
REQUIREMENTS ARE CODIFIED UNDER THE TEXTILE FIBER
PRODUCTS IDENTIFICATION ACT (15 U.S.C. 70), AND
IMPLEMENTED BY 19 C.F.R. 141.113.

(4) INACCURATE INVOICING IS A WIDESPREAD PROBLEM WITH
FABRIC DESPITE THE FACT THAT SPECIFIC ADDITIONAL
INVOICING REQUIREMENTS EXIST FOR CERTAIN TYPES OF FABRIC
UNDER THE CUSTOMS REGULATIONS (19 C.F.R. 141.89). IF THE
INFORMATION SPECIFIED IN 19 C.F.R.141.89 IS ACCURATELY
PROVIDED ON INVOICES, BROKERS AND IMPORTERS WILL BE IN A
MUCH BETTER POSITION TO CLASSIFY THEIR MERCHANDISE
PROPERLY.

(5) CURRENTLY THERE ARE NO ADDITIONAL INVOICING
REQUIREMENTS FOR SILK, VEGETABLE, SPECIALTY, COATED AND
KNIT FABRICS. IMPORTERS OF THESE ARTICLES ARE REMINDED OF
THE GENERAL INFORMATION REQUIRED ON INVOICES IN
ACCORDANCE WITH THE 19 C.F.R. 141.86.

THIS LETTER IS BEING SENT TO ALL HIGH VOLUME IMPORTERS OF
FABRIC. THE PURPOSE OF THE LETTER IS TO INFORM YOU OF OUR
CONCERNS RELATING TO THE CURRENT TREND OF DISCREPANCIES. IN
ADDITION, WE ALSO WANT TO REMIND YOU THAT YOUR FIRM HAS THE
RESPONSIBILITY UNDER THE CUSTOMS LAWS OF THE UNITED STATES TO
PRESENT YOUR ENTRIES CORRECTLY, AND IN THE PROPER FORMAT. IF
YOU ARE FILING YOUR ENTRIES OF THESE TYPES OF FABRICS CORRECTLY,
AND HAVE THE IMPORTED MERCHANDISE PROPERLY INVOICED, CLASSIFIED
AND MARKED WITH COUNTRY OF ORIGIN AT TIME OF IMPORTATION, THEN
NO FURTHER ACTION IS REQUIRED. HOWEVER, IF YOUR COMPANY'S
INDIVIDUAL IMPORT TRANSACTIONS ARE NOT FREE FROM THESE TYPE OF
ERRORS, AND YOU DO NOT TAKE IMMEDIATE CORRECTIVE ACTIONS
DESIGNED TO FOSTER COMPLIANCE, YOUR COMPANY COULD FIND ITSELF
SUBJECT TO INCREASED ENTRY REVIEWS ANDOR CARGO EXAMINATIONS,
PENALTIES, OR OTHER REMEDIAL ACTIONS.

WE ARE ALSO REQUESTING THAT YOU ADVISE EACH OF THE CUSTOMS
BROKERS OR FILERS ACTING ON YOUR BEHALF, AS WELL AS THE FOREIGN
SUPPLIERS FROM WHOM YOUR COMPANY SOURCES THESE ITEMS, OF THE
CLASSIFICATION, MARKING, AND INVOICING REQUIREMENTS OUTLINED IN
THIS LETTER. YOUR FIRM MAY FIND IT ADVANTAGEOUS TO MEET WITH
YOUR BROKER OR FILER AND DISCUSS THE NON-COMPLIANCE ISSUES
IDENTIFIED IN THIS LETTER, TO ENSURE THAT YOUR INDIVIDUAL IMPORT
TRANSACTIONS ARE FREE FROM THESE TYPES OF ERRORS.

ADDITIONAL INFORMED COMPLIANCE INFORMATION IS AVAILABLE VIA THE
CUSTOMS INTERNET WEBSITE WWW.CUSTOMS.TREAS.GOV. ADDITIONAL
INFORMATION SUBJECT TO FEDERAL TRADE COMMISSION REQUIREMENTS CAN
BE FOUND VIA THE INTERNET WEBSITE WWW.FTC.GOV.

FOR FURTHER INFORMATION CONCERNING THIS MATTER, PLEASE CONTACT
THE U.S. CUSTOMS IMPORT SPECIALISTS AT YOUR PORT OF ENTRY, YOUR
NATIONAL ACCOUNT MANAGER PORT ACCOUNT TEAM (IF APPLICABLE) OR
INTERNATIONAL TRADE SPECIALIST SALVATORE INGRASSIA AT THE NEW
YORK STRATEGIC TRADE CENTER AT (212) 637-7732.

SINCERELY,

MARJORIE DELOACH
ACTING DIRECTOR
NEW YORK STRATEGIC TRADE CENTER