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Foreign Textile and Apparel Factory Visits Find Increase in Documentation Issues

Thursday, April 04, 2019
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 2018 (Oct. 1, 2017, through Sept. 30, 2018). 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 2018 figures show that CBP found some sort of problem (see chart below for specifics) in 19.6 percent of targeted factories, a slight decrease from FY 2017. These problems include factories that are closed (4.3 percent), that have evidence of transshipment (zero), that refused to admit CBP teams or turn over documentation (2.2 percent), or that are considered high-risk (unable to provide production records to satisfy CBP of the origin of the goods; 13.0 percent).

CBP also found that 6.5 percent of factories visited had trade preference program violations, down from 12 percent in FY 2017, and that 31.9 percent had insufficient documentation to support trade preference claims, up from 28 percent.

CBP states that shipments from factories that are closed or high-risk or have evidence of possible illegal transshipment will be scrutinized and validated. 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 and Colombia will be verified for eligibility.

Illegal Transshipment Verifications

 

Country/Date

Factories Visited

Closed

Refused Admission/Docs

High Risk

Evidence of Transshipment

Nicaragua 4/18

9

0

0

5

0

El Salvador 6/18

20

1

0

0

0

Guatemala 5/18

20

0

0

0

0

Peru 7/18

23

1

3

3

0

Colombia 7/18

19

0

0

2

0

Madagascar 8/18

8

0

0

1

0

Mauritius 8/18

6

0

0

2

0

Kenya 9/18

16

1

0

0

0

Dominican Rep. 9/18

17

3

0

5

0

Verifications under FTAs or Preference Programs

 

 

Country/Date

Compliant Factories

Violating Preference Programs

Closed Factories

Insufficient Docs to Support Program Claims

Kenya 9/18

10

0

1

6

Dominican Rep. 9/18

5

5

3

7

Nicaragua 4/18

1

4

0

4

Guatemala 5/18

20

0

0

0

El Salvador 6/18

14

0

1

6

Peru 7/18

13

0

1

10

                       

For more information on compliance with textile and apparel import laws and regulations, please contact Elise Shibles at (415) 490-1403.

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