CSMS Message: 98-000395

TO : ALL ABI BROKERS.
FROM : CARLA ZZ-DONOFRIO

SUBJECT : TEX-GUIDELINE FOR ENTRY REVIEW

DATE : 05/08/98

MAY 8, 1998

SPE-2 FO:TC:I:E JRD
CATEGORY: TEX

TO : ALL PORT DIRECTORS, CUSTOMS MANAGEMENT CENTER (CMC)
DIRECTORS AND STRATEGIC TRADE CENTER (STC) DIRECTORS

FROM : DIRECTOR, TRADE COMPLIANCE

PASS TO: ALL IMPORT SPECIALISTS, NATIONAL IMPORT SPECIALISTS,
ENTRY OFFICERS, INSPECTORS, INTERNATIONAL TRADE
SPECIALISTS AND OTHER INTERESTED PARTIES

SUBJECT: TBT-98-018 - GUIDELINES FOR ENTRY DOCUMENT REVIEW TO
SUBSTANTIATE COUNTRY OF ORIGIN FOR TEXTILES AND TEXTILE
PRODUCTS (PUBLIC VERSION)

COUNTRY: ALL

REF: TBT-97-049
TBT-98-008
19 CFR 12.130

BACKGROUND:

TBT-97-049 REQUESTED THAT PORT DIRECTORS REQUIRE THAT
CERTAIN DOCUMENTS BE FURNISHED BY THE IMPORTER TO VERIFY THE
TRUE ORIGIN OF SOME TEXTILE PRODUCTS IF THE PORT DIRECTOR IS
UNABLE TO DETERMINE THE ORIGIN OF THE GOODS BASED ON THE
TEXTILE DECLARATION PROVIDED IN THE ENTRY PACKAGE. IN SOME
INSTANCES, THE ADDITIONAL RECORDS ARE REQUIRED IF THE
EXPORTER HAS PREVIOUSLY BEEN CONVICTED OF ILLEGALLY
TRANSSHIPPING TEXTILE ARTICLES OR HAS PREVIOUSLY SUBMITTED A
FALSE TEXTILE DECLARATION IN THE ENTRY COVERING THE
TRANSSHIPPED ARTICLES (SEE TBT 98-008). THE ADDITIONAL
DOCUMENTS INCLUDE, BUT ARE NOT LIMITED TO, RECORDS RELATIVE
TO THE RAW MATERIALS, CUTTING, PRODUCTION, SUBCONTRACT,
OUTPROCESSING, EXPORT, AND LETTER OF CREDIT-PROOF OF
PAYMENT.

THIS REQUIREMENT OF ADDITIONAL DOCUMENTS IS IN ACCORDANCE
WITH 19 CFR 12.130(G), WHICH PROVIDES THAT IF THE PORT
DIRECTOR IS UNABLE TO DETERMINE THE COUNTRY OF ORIGIN OF A
TEXTILE ARTICLE FROM THE INFORMATION SET FORTH IN THE
TEXTILE DECLARATION (REQUIRED IN 19 CFR 12.130(F)), THE
DECLARANT SHALL SUBMIT SUCH ADDITIONAL INFORMATION AS
REQUESTED. THE GOODS WILL BE DETAINED UNTIL THEY ARE
DETERMINED TO BE ADMISSIBLE OR ARE EXCLUDED.

EVALUATION AND TREATMENT OF DOCUMENTATION RELATIVE TO
DETAINED ENTRIES SHOULD BE UNIFORM AMONG CUSTOMS PORTS. IN
ORDER TO ENSURE GREATER UNIFORMITY, TBT-97-049 LISTED
DOCUMENTS TO BE REQUESTED TO VERIFY PRODUCTION AND A
SUBSTANTIAL NUMBER OF TEXTILE IMPORT SPECIALISTS HAVE BEEN
TRAINED IN FEBRUARY AND APRIL 1998 IN ANALYZING PRODUCTION
RECORDS. TO PROVIDE EVEN GREATER GUIDANCE TO BOTH THE FIELD
AND THE TRADE, THIS TBT WILL PROVIDE GENERAL GUIDELINES AND
SOME EXAMPLES IN WHICH SOME SUBMITTED DOCUMENTATION HAS BEEN
DETERMINED NOT TO BE ACCEPTABLE TO CUSTOMS AND JUST AS
IMPORTANTLY, WHY IT HAS NOT.

GUIDELINES

THESE GUIDELINES ARE TO FUNCTION AS A SET OF GUIDELINES TO
INFORM THE PUBLIC AND THE PORTS WHAT TYPE OF DOCUMENTATION
IS ACCEPTABLE, OR HAS NOT BEEN ACCEPTABLE, TO VERIFY COUNTRY
OF ORIGIN. THESE GUIDELINES ARE NOT INTENDED TO GIVE
SPECIFIC EXAMPLES TO BE USED TO EXCLUDE MERCHANDISE. A
SINGLE EXAMPLE SHOULD NOT BE USED ALONE, BUT RATHER IN
CONTEXT WITH THE OTHER DOCUMENTS AND ONLY IF THERE IS A
PREPONDERENCE OF INFORMATION SHOULD THE DOCUMENTATION BE
USED TO EXCLUDE MERCHANDISE. IMPORT SPECIALISTS SHOULD ALSO
BE AWARE THAT NOT ALL DOCUMENTS WILL BE AVAILABLE IN ALL
INSTANCES WHERE THEY ARE REQUESTED. THIS IS TRUE BECAUSE OF
THE DIFFERENT METHODS OF KEEPING RECORDS, THE DIFFERENT
LEVELS OF FACTORY ORGANIZATION AND THE DOCUMENT REQUIREMENTS
IMPLEMENTED IN VARIOUS COUNTRIES. SOME OF THE DOCUMENTS ARE
NOT CREATED IN THE ORDINARY COURSE OF BUSINESS OF A SPECIFIC
FACTORY AND FOR THAT REASON DO NOT EXIST. THEREFORE, IMPORT
SPECIALISTS SHOULD EXERCISE DISCRETION AND COMMON SENSE IN
APPLYING THE GUIDELINES.

1. SUFFICIENT PRODUCTION RECORDS MUST BE PROVIDED TO
ESTABLISH THE COUNTRY OF ORIGIN.

IN GENERAL, THE RECORDS LISTED IN TBT-97-049 COVER THE TYPE
OF DOCUMENTS THAT WILL SATISFY THE DOCUMENT REQUIREMENTS;
HOWEVER, THERE MAY BE ADJUSTMENTS ON A CASE-BY-CASE BASIS.
THE RECORDS LISTED ARE COMMONLY MAINTAINED IN FACTORIES IN
THE ORDINARY COURSE OF BUSINESS AND SHOULD BE READILY
AVAILABLE FROM THE FACTORY PRODUCING THE GOODS. THE
DOCUMENTS SHOULD COMPLETELY COVER THE PRODUCTION OF THE
GOODS AND BE FROM ORIGINAL FACTORY SOURCES AND SHOULD NOT
MERELY BE MANAGEMENT SUMMARIES. IN SOME INSTANCES EXCLUSION
OF THE GOODS HAS RESULTED WHEN IMPORTERS HAVE NOT PROVIDED
SOME OR ALL OF THE REQUESTED DOCUMENTS WHEN THE IMPORTER
FELT IT WAS UNNECESSARY (E.G., THE STEP OF PRODUCTION WAS
NOT ORIGIN CONFERRING OR THE DOCUMENTATION HAD BEEN
PREVIOUSLY FURNISHED FOR ANOTHER ENTRY FOR SIMILAR
MERCHANDISE).

2. PRODUCTION RECORDS SHOULD BE UNDERSTANDABLE TO THE
CUSTOMS OFFICER EVALUATING THEM.

PRODUCTION RECORDS SHOULD CONTAIN SUFFICIENT TRANSLATION
INTO ENGLISH SO THAT THE CUSTOMS OFFICER KNOWS WHAT THE
RECORD IS AND WHAT IS COVERED. ESSENTIALLY, TITLES OF
COLUMNS AND SIGNIFICANT PARTS (SUCH AS STEPS OF PRODUCTION)
SHOULD BE TRANSLATED AND DOCUMENTS ORGANIZED IN THE SPECIFIC
ORDER OF THE PROCESSING STEPS RATHER THAN AT RANDOM.

3. A TIME LINE OF THE STEPS OF PROCESSING SHOULD BE
SUBSTANTIATED BY THE PRODUCTION DOCUMENTS.

A LOGICAL, PLAUSIBLE TIME LINE OF PRODUCTION COVERING
PROCESSING (INCLUDING PROCESSING THAT IS NOT ORIGIN
CONFERRING) FOR ALL QUANTITIES ENTERED SHOULD BE EVIDENT
FROM THE DOCUMENTS PROVIDED WITHOUT UNEXPLAINED
CONTRADICTORY RECORDS OR SIGNIFICANT GAPS OF INFORMATION. A
TABLE OR CHART OF THE ACTUAL PROCESSING SHOULD BE DISPLAYED
OR ABLE TO BE CREATED FROM THE RECORDS PROVIDED. FROM THE
DOCUMENTS THERE SHOULD BE A CLEAR PICTURE OF PRODUCTION FROM
TIME OF OBTAINING THE RAW MATERIALS THROUGH THE EXPORT TO
THE UNITED STATES.

4. A FACTORY EVALUATION OR LISTING OF PRODUCTION MACHINERY
USED IN THE PRODUCTION OF THE TEXTILE ARTICLES IN THE
SHIPMENT SHOULD BE PROVIDED.

THE NUMBERS AND TYPES OF EQUIPMENT SHOULD BE PROVIDED SO
THAT THE CUSTOMS OFFICER CAN DETERMINE IF THE PRODUCTION IS
FEASIBLE. OFTEN THIS IS AVAILABLE ON A FACTORY PROFILE,
FROM A FACTORY LIST OR FROM A FACTORY REGISTRATION.
FACTORIES NORMALLY KEEP A LIST OF MACHINERY A WITH THE COST
TO OBTAIN IT. THERE MUST BE SUFFICIENT OPERATING MACHINERY
AND SPECIALTY MACHINES TO EFFECT THE OPERATIONS CLAIMED. IF
A FACTORY RENTS OR LEASES EXTRA EQUIPMENT TO MEET CONTRACT
QUANTITIES OR DEADLINES, THE ADDITIONAL MACHINERY SHOULD BE
DOCUMENTED BY THE FACTORY UP FRONT AS PART OF THE SUBMISSION
RATHER THAN RELY IN THE CUSTOMS OFFICER TO QUESTION THE
POSSIBILITY.

5. NUMBER OF WORKERS SHOULD BE DOCUMENTED.

THE NUMBER OF EMPLOYEES, AND PARTICULARLY THE WORKERS IN THE
PRODUCTION AREA, SHOULD BE DOCUMENTED BY TIME CARDS, SALARY
PAYMENT RECORDS OR PRODUCTION RECORDS. THERE MUST BE THE
NECESSARY NUMBER OF WORKERS TO PERFORM THE PROCESSING. THIS
SHOULD BE TIED TO SPECIFIC NAMES SO THAT THEY CAN BE
INDEPENDENTLY VERIFIED. PRODUCTION RECORDS HAVE NAMES OF
PERSONS (SOMETIMES IDENTIFIED BY NUMBER) AND TIME CARDS HAVE
NUMBERS OR NAMES. IF THERE ARE SPECIAL WORK SITUATIONS THAT
AFFECT THE PRODUCTION, E.G. COTTAGE INDUSTRY, EXTENDED
SHIFTS OR OVERTIME, THE EXPLANATION SHOULD BE PROVIDED WITH
THE SUBMISSION OF THE RECORDS.

6. THE ACTUAL GOODS SHOULD BE TRACEABLE THROUGH THE
PRODUCTION RECORDS.

MOST OFTEN A STYLE NUMBER, PURCHASE ORDER NUMBER, FACTORY
ASSIGNED WORK ORDER NUMBER OR CONTRACT NUMBER IS USED TO
IDENTIFY THE GOODS IN THE FACTORY ON PRODUCTION DOCUMENTS.
SOMETIMES, FACTORIES MAKE UP THEIR OWN SYSTEMS TO IDENTIFY
MERCHANDISE. IF A FACTORY HAS AN INTERNAL STYLE OR UNIQUE
PRODUCTION NUMBER USED IN ITS DOCUMENTS, IT SHOULD BE TIED
TO THE NUMBER OF THE PURCHASE ORDER AND TO THE SHIPMENT.

7. THE PRODUCTION DOCUMENTS PROVIDED MUST COVER THE
QUANTITIES INCLUDED IN THE ENTRY.

PRODUCTION RECORDS COVERING ONLY A PORTION OF THE
MERCHANDISE WILL NOT SUFFICE TO DEMONSTRATE COUNTRY OF
ORIGIN FOR THE GOODS NOT COVERED BY THE DOCUMENTS. THE
GOODS NOT COVERED BY THE PRODUCTION RECORDS COULD HAVE BEEN
PRODUCED ELSEWHERE AND COMMINGLED WITH THE GOODS PRODUCED IN
THE FACTORY.

8. WORK DONE OUTSIDE OF THE FACTORY SHOULD BE DOCUMENTED.

IF AN OUTPROCESSING ARRANGEMENT (OPA), COTTAGE INDUSTRY OR
HOME WORKERS, OR A SHARED CONTRACT OR SUBCONTRACT IS USED
FOR PART OF THE PRODUCTION, THE DOCUMENTS, SUCH AS CUSTOMS
CLEARANCES, PAYMENT FOR THE WORK AND MANIFESTS,
SUBSTANTIATING THE MOVEMENT OF THE GOODS AND THE PRODUCTION
DONE OUTSIDE OF THE FACTORY MUST BE INCLUDED. ACTUAL
PRODUCTION RECORDS FROM A FACTORY IN ANOTHER COUNTRY
PERFORMING OUTPROCESSING MAY NOT BE AVAILABLE, BUT THE
PAYMENT FOR THE WORK AND THE MOVEMENT OF THE SUBASSEMBLIES
OR COMPONENTS CAN BE SHOWN.

ACTION:

PORT DIRECTORS SHOULD CONTINUE TO ENSURE THAT IMPORT
SPECIALISTS ADHERE TO THE GUIDELINES IN EVALUATING
PRODUCTION RECORDS FOR DETAINED SHIPMENTS.

INFORMATION:

IF YOU HAVE ANY QUESTIONS CONCERNING THIS MATTER, PLEASE DO
NOT HESITATE TO CONTACT JUNE PERGOLA AT TELEPHONE NUMBER
(202) 927-0705 OR BOB DORSETT AT (202) 927-7002, TRADE
COMPLIANCE.

PHILIP METZGER