Customs News 2003
12.9.03
The landmark Medicare drug legislation that President George W. Bush signs into law today contains a provision authorizing the U.S. Department of Homeland Security's Bureau of Customs & Border Protection's (Customs) Merchandise Processing Fee (MPF) and other Customs user fees until 2013. Without this legislation, the authorization for Customs user fees would have expired March 31, 2004.
11.25.03
CUSTOMS ISSUES FINAL ADVANCED MANIFEST REGULATIONS- On November 20, U.S. Department of Homeland Security's Bureau of Customs and Border Protection (Customs) transmitted its final advanced manifest regulations to Congress. The final regulations, effective January 5, 2004, will require that manifests be submitted to Customs under the following timelines: Inbound: Air & Courier - 4 hours prior to arrival in the U.S., or "wheels up" from certain nearby areas; Rail - 2 hours prior to arrival at a U.S. port of entry; Vessel - 24 hours prior to lading at foreign port; and Truck - Free And Secure Trade (FAST): 30 minutes prior to arrival in the U.S.; non-FAST: 1 hour prior to arrival in the U.S. Outbound: Air & Courier - 2 hours prior to scheduled departure from the U.S.; Rail - 2 hours prior to the arrival of the train at the border; Vessel - 24 hours prior to departure from the U.S. port where cargo is laden; Truck - 1 hour prior to the arrival of the truck at the border.
Due to a recent ruling issued by the U.S. Department of Homeland Security's Bureau of Customs and Border Protection (Customs), Customs in New York has begun to reclassify all leather handbags, briefcases, luggage and other leather goods as having "an outer surface of plastic coating." Almost all leather, except newbuc and suede, contain some sort of finish that protects against staining or bleeding. However, Customs in New York has determined that any leather good with any sort of finish, even as thin as .01mm thick (the former standard was .15mm thick), will now be classified as having a plastic coating. The net result is that the tariffs paid on these leather goods are double to triple what was paid previously. So far, only the ports and airports in the New York area are currently enforcing this ruling, but it is likely that more ports will soon follow suit. AAFA has joined with the Travel Goods Association (TGA) and the Fashion Accessories Shippers Association (FASA) to work with Customs and certain members of Congress to rectify this situation. If you have been affected by this ruling, please contact AAFA’s Nate Herman as soon as possible at 703-797-9062.
11.18.03
The U.S. Department of Homeland Security's Bureau of Customs & Border Protection (Customs) has announced that, as of January 18, 2004, Customs will require that all U.S. manufacturers use a new Shippers Export Declaration (SED) form for all future export shipments. The new form is available on the U.S. Census Bureau's website.
10.7.03
AAFA marked the three-year anniversaries of the Caribbean Basin Trade Partnership Act (CBTPA) and the African Growth and Opportunity Act (AGOA) and the eleven-month anniversary of the Andean Trade Promotion & Drug Eradication Act (ATPDEA) by highlighting the fact all three trade preference programs still lack final Customs regulations. In an October 1 letter to Secretary of Homeland Security Tom Ridge, AAFA applauded passage of the three trade preference programs, noting that "These programs have not only benefited AAFA's members, but have greatly assisted in the economic development of the beneficiary countries." The letter states that the interim regulations issued by the U.S. Department of Homeland Security's Bureau of Customs and Border Protection (Customs) did not clearly address or left vague many specific issues that will hopefully be clarified in the final Customs regulations. Furthermore, without final regulations, U.S. apparel and footwear firms lack the regulatory certainty they need to fully take advantage of the benefits of each program. With three years already passed since implementation of two of these programs, AAFA asked that Customs issue final regulations for each program as soon as possible.
President George W. Bush on the morning of October 1 signed into law legislation that extends until March 31, 2004 the U.S. Department of Homeland Security's Bureau of Customs and Border Protection's (Customs) authority to collect fees for processing imports (Merchandise Processing Fee - MPF). Customs collects the fee on all U.S. imports. Without the legislation, the Customs user fee was set to expire on October 1. The legislation passed both houses of Congress late in the evening of September 30. The Customs user fees have been in dispute the last few years as much of the revenues have funded non-Customs related purposes.
Effective September 30, the U.S. Department of Homeland Security's Bureau of Customs and Border Protection (Customs) issued revised interim regulations modifying the brassieres provision of the Caribbean Basin Trade Partnership Act (CBTPA). According to Customs, the revised interim regulations contain the changes made to the brassieres provision in the Trade Act of 2002. The specific changes to the regulations include removing the reference to requiring brassieres to be produced and entered in the same year, changing the valuation description to refer to "fabrics" instead of "fabric components," changing the valuation requirement to 75 percent, as well as other changes required by the Trade Act of 2002. Comments on the revised interim regulations for the brassieres provision are due December 1.
The U.S. Department of Homeland Security's Bureau of Customs & Border Protection (Customs) issued a September 23 Customs Directive outlining the tariff preference levels (TPLs) for Fiscal Year 2004 (October 1, 2003 - September 30, 2004) for duty-free entry of knit-to-shape apparel (other than socks) and t-shirts made with regional fabric under the Caribbean Basin Trade Partnership Act (CBTPA). According to the Directive, 850 million Square Meter Equivalents (SMEs) of knit-to-shape apparel and 10 million dozen t-shirts made in the Caribbean or Central America from regional fabric can enter the United States duty-free under CBTPA. Posted
9.17.03
The U.S. Department of Homeland Security's Bureau of Customs and Border Protection (Customs) issued a directive reminding U.S. importers that it can request additional documentation in regards to specific shipments.
The Committee for the Implementation of Textile Agreements (CITA) announced September 2 that products of Uni-Oriental Ltd. Of Botswana are denied entry to the United States for a period of two years. The announcement is the result of an investigation that found that the company had been illegally transshipping, was closed or was unable to produce records to verify production.
9.2.03
The U.S. Department of Homeland Security's Bureau of Customs and Border Protection announced that, effective August 18, foreign manufacturers can now participate in the Customs - Trade Partnership Against Terrorism (C-TPAT) program. C-TPAT is a joint initiative between the U.S. Customs Service and firms to protect the security of cargo entering the United States. C-TPAT requires U.S. importers and foreign manufacturers to implement practices that ensure tighter security of cargo along the entire supply chain in return for expedited processing of imports. For more information on C-TPAT, please go to Customs' Web site.
8.18.03
The U.S. Department of Homeland Security's Bureau of Customs and Border Protection announced August 13 that it has withdrawn a proposed January 9, 2003 rule regarding the confidential treatment of certain vessel manifest information. The proposed rule would have provided that, in addition to the importer or consignee, parties that electronically transmit vessel cargo manifest information directly to Customs 24 or more hours before cargo is loaded aboard the vessel at the foreign port may request confidentiality with respect to importer or consignee identification information. Current regulations allow only the importer or consignee, or an authorized employee, attorney, or official of the importer or consignee, to make such requests. After careful consideration, Customs has decided to withdraw the proposal because of the clear lack of consensus on the part of the trade community regarding the value of the proposed amendment and the administrative burden the proposal, if adopted, would have created for Customs and U.S. importers.
The U.S. Department of Homeland Security's Bureau of Customs and Border Protection announced August 11 that it issued a final rule to Customs Regulations to provide that corporate compliance activity engaged in by related business entities for the purpose of exercising ''reasonable care'' is not customs business and, therefore, is not subject to the customs broker licensing requirements. The amendments make clear that this corporate compliance activity concept does not extend to document preparation and filing, which is customs business subject to licensing requirements. According to Customs, the amendments will improve the operational efficiency of the affected business entities and, thereby, enhance their ability to ensure compliance with applicable customs laws and regulations.
8.12.03
The Committee for the Implementation of Textile Agreements (CITA) announced that export visas for shipments of textiles and apparel from Vietnam that are subject to quota will require an export visa effective August 11. The Department of Homeland Security's Bureau of Customs & Border Protection will not clear any U.S. imports of Vietnamese textile and apparel subject to quota after August 11 without a valid export visa issued by the government of Vietnam.
On August 1, the Court of Appeals for the Federal Court reversed a February 2002 ruling by the Court of International Trade regarding the classification of costumes. The ruling is the most recent development involving a U.S. company that is seeking a classification of costumes as a garment subject to duty and quota requirements. As a result, if the new ruling stands, costumes will now be classified under a "fancy dress" harmonized tariff system number HTS 9505.90.6000 that permits duty and quota free entry of the subject merchandise. The previous CIT ruling had classified costumes under the HTS number 6114.30.30, which would made the goods liable for a 15 percent duty and subject to quota.
The General Accounting Office (GAO), a Congressional agency that acts as an independent watchdog for Congress, recently issued a report that complimented Customs on the progress it has made on implementing the Customs Trade Partnership Against Terrorism (C-TPAT) and Container Security Initiative (CSI) programs, but criticized the agency for failure to plan for the programs in the long term. According to the report, although Customs has successfully dealt with critical issues as they occur, they have ignored long-term issues that could be detrimental to the success of C-TPAT and CSI.
7.30.03
The Department of Homeland Security's Bureau of Customs & Border Protection has issued draft advanced manifest requirements for U.S. imports entering by sea, air, truck and rail. With a tentative effective date of October 1, the proposed rules, will require that Customs receive manifest information on a shipment: by air - four hours prior to arrival in the United States or from "wheels up" from certain nearby areas; by rail - two hours prior to arrival in the United States; by truck - 30 minutes prior to arrival in the United States from Canada under the FAST program and one hour for non-FAST arrivals; and by ship - 24 hours prior to lading at a foreign port. Comments are due by August 22.
The U.S. Department of Commerce's Office of Textiles & Apparel (OTEXA) has placed the text of the U.S.-Vietnam Bilateral Textile Agreement and the U.S.-Vietnam Visa Arrangement on its Web site.
6.20.03
On June 5, the U.S. Senate passed the Relief for Working Families Tax Act of 2003 (HR 1308) after approving a late amendment that would extend the Customs user fees set forth in 19 USC 58c(a). These fees include the Merchandise Processing Fee (MPF); fees related to the arrival of vessels, trucks, and railroad cars; customs broker permit fees; etc. These fees are currently set to expire on September 30, 2003, but HR 1308 would extend them through March 31, 2010. Senate Finance Committee Chairman Charles Grassley (R-IA), who introduced the amendment, indicated that the extended fees would be used to offset the extension of the child tax credit that is the principle provision in the bill. This action is the latest Congressional attempt to reauthorize these fees and use the associated revenues to fund non-Customs related programs. These efforts have generally been made very quietly and have been met with strong opposition from members of the trade community, some of whom want those revenues dedicated solely to Customs.
6.2.03
AAFA submitted comments on Customs' interim regulations on the Andean Trade Promotion & Drug Eradication Act (ATPDEA) on May 27. Among other things, the comments call for a number of improvements to make the trade preference program more flexible and user friendly. ATPDEA provides duty-free benefits for U.S. imports of all apparel (under certain restrictions) and virtually all footwear from the Andean countries of Bolivia, Columbia, Equador and Peru.
5.27.03
The AAFA submitted comments on Customs' interim regulations on the Caribbean Basin Trade Partnership Act (CBTPA) and the Africa Growth and Opportunity Act (AGOA) on May 20. Among other things, the comments call for a number of improvements to make the trade preference programs more flexible and user friendly. Posted May 27, 2003.
On May 23, the Bureau of Customs and Border Protection (formerly the U.S. Customs Service) published an updated "592A" semi-annual list of the names of foreign entities violating textile transshipment and country of origin rules. For the six-month period ending March 20, 2003, Customs identified three Hong Kong entities that were assessed penalty claims under Section 592 of the Tariff Act of 1930, and, thus, merit publication. No entities were added or removed since the list was previously published in October 2002.
4.14.03
The U.S. Customs released an updated textile transshipment list on April 4, 2003 containing the names of companies from Bangladesh, Cambodia, Hong Kong, Indonesia, Macau and Taiwan convicted, penalized and-or excluded from entry because of transshipment. The updated list adds 22 Hong Kong factories and removes 23 other Hong Kong factories. The revised list also removes one Indonesian factory.
3.31.03
The Committee for the Implementation of Textile Agreements (CITA) announced March 26 that the United States and Pakistan have reached an agreement to test the Electronic Visa Information System (ELVIS). Under the agreement, all U.S. imports of apparel and textiles from Pakistan must be accompanied by both a paper visa and an ELVIS transmission to enter the United States. The six-month trial will begin April 11.
3.21.03
The U.S. Customs Service issued new interim regulations on March 21 governing the import of apparel and textile products under the Caribbean Basin Trade Partnership Act (CBTPA) and the African Growth and Opportunity Act (AGOA). The interim regulations incorporate the changes made to the apparel/textile sections of the CBTPA and AGOA programs under the Trade Act of 2002 passed last August by Congress. Those changes include requiring that the dyeing, printing and finishing of certain fabrics must be done in the United States in order for garments assembled in CBTPA countries to qualify for duty-free entry to the United States. The interim regulations also clarify that garments assembled in CBTPA countries that also undergo post-assembly finishing operations in CBTPA countries will still qualify for duty-free entry to the United States. The interim regulations are effective as of March 21. Written comments on the interim regulations are due May 20.
3.12.03
The U.S. General Accounting Office (GAO), Congress' watchdog agency, issued a new report February 28 on the development of the U.S. Customs Service's Automated Commercial Environment (ACE) system. When completed in 2007, ACE, through a web-based system, will allow any Customs official at any U.S. or foreign port or border crossing to call up information in current time on imports and exports from any other port or crossing. The GAO found that Customs, in its latest plan, provides for certain project management tasks which meet the legislative conditions imposed by the Congress. Customs, however, has been slow to correct weaknesses in two fundamental areas -- people and processes. These weaknesses increase the risk that ACE will be late, cost more than necessary and not perform as intended.
3.5.05
In a February 18 letter, AAFA provided comments on the U.S. Customs Service's strawman proposals concerning proposed regulations for the mandatory collection by Customs of electronic cargo information prior to importation into or exportation from the United States. While AAFA strongly supports the continued efforts of Customs to ensure a safe and secure national cargo system, AAFA believes the lead times for electronic submission of manifest information proposed by Customs will lead to delays and could render the use of air transport worthless. Furthermore, the delays caused by the longer lead times will require cargo to sit for long periods in possibly unsecured areas, leading to the tampering that Customs is trying to prevent. Customs has posted the outline of the 8 proposals (one each for inbound and outbound for sea, air, truck and rail cargo) on its Web site.
The U.S. Customs Service issued a Federal Register notice February 25 that contained the final regulations on country of origin for apparel made of silk and other materials. The final regulations state that the country of origin is the country "in which the fabric comprising the good was formed by a fabric-making process."
2.3.03
The U.S. Customs Service on February 2 began enforcing its new regulations requiring all U.S. importers to submit manifests to Customs 24 hours before cargo leaves its port of origin. In a concession to U.S. footwear and apparel companies, however, Customs announced in a revised Frequently Asked Questions document released January 23 that it will not necessarily require detailed cargo descriptions for footwear and clothing products. Although such descriptions as "Apparel," "Wearing Apparel" or "Ladies' Apparel" will still not meet the requirements of the new regulation, generic descriptions that will qualify are "Shoes" and "Clothing."
1.17.03
In reaction to growing pressure from U.S. firms and shipping companies, the U.S. Customs Service on January 9 issued a proposed rule which would allow the importer or consignee to request confidentiality for the names, identification marks and numbers and contact information of the consignee, importer and/or shipper when submitting manifest information. A means to keep important information confidential was request by complying with Customs’ new rule requiring manifest information be submitted 24-hours before a shipment is laden at a foreign port. Comments on the proposed confidentiality rule are due February 10.
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