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Foreign Textile and Apparel Factory Visits Find Increase in Violations

Thursday, January 25, 2018
Sandler, Travis & Rosenberg Trade Report

U.S. Customs and Border Protection recently provided to the American Apparel and Footwear Association the following information on the results of CBP textile production verification team visits conducted in fiscal year 2017 (Oct. 1, 2016, through Sept. 30, 2017). TPVTs visit textile and apparel exporting countries to review company records and operations to determine if illegal transshipment or improper shipping under trade preference programs or free trade agreements is occurring.

According to the AAFA, the FY 2017 figures show that CBP found some sort of problem in about 20 percent of targeted factories, a slight increase from FY 2016. CBP found violations in 12 percent of factories, AAFA states, up from 7 percent in FY 2016 and the highest rate since FY 2003. CBP also found that 28 percent of factories had insufficient documentation, a slight increase over FY 2016. In addition, the FY 2017 figures for trade preference violations were the highest since FY 2006. On the other hand, AAFA adds, CBP reported only two instances of transshipment in FY 2017, just the second time since 2009 that transshipment has been discovered in TPVT visits.

CBP states that shipments from factories that are closed and high-risk (unable to provide production records to satisfy CBP of the origin of the goods) and have evidence of possible illegal transshipment will be scrutinized and validated by CBP. In addition, shipments from noncompliant factories claiming preferential treatment under the African Growth and Opportunity Act, CAFTA-DR, and the free trade agreements with Peru, Colombia, Morocco, and Korea will be verified for eligibility.

Illegal Transshipment Verifications

 

 

Country/Date

Factories Visited

Closed

Refused Admission/Docs

High Risk

Evidence of Transshipment

Honduras 03/17

15

0

0

1

0

Peru 05/17

24

0

0

7

0

Colombia 06/17

19

0

0

1

0

Guatemala 06/17

18

0

0

1

0

Morocco 07/17

19

0

0

14

2

Dominican Rep. 07/17

21

2

0

0

0

Madagascar 07/17

7

0

0

0

0

Mauritius 08/17

6

0

0

0

0

Lesotho 09/17

9

0

0

0

0

Korea 09/17

7

1

0

0

0

 

Verifications under FTAs or Preference Programs

 

 

Country/Date

Compliant Factories

Violating Preference Programs

Closed Factories

Insufficient Docs to Support Program Claims

Madagascar 07/17

7

0

0

0

Mauritius 08/17

6

0

0

0

Lesotho 09/17

5

0

0

4

Honduras 03/17

13

1

0

1

Guatemala 06/17

14

3

0

1

Dominican Rep. 07/17

13

0

2

8

Peru 05/17

7

0

0

15

Colombia 06/17

11

0

0

8

Morocco

2

13

0

4

Korea

6

1

1

0

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