Carolinas Textile Club
Week of January 13, 2003
Textile fraud being curtailed: Customs official
By Devin Steele
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Betty Small speaks with John Stickley Jr. (C) and Chuck Davis, both of Stickley Textiles, Charlotte, NC, after her address to the Carolinas Textile Club during its December meeting. |
CHARLOTTE, NC — In recent years, U.S. Customs agents’ visits to textile manufacturing facilities around the world have stopped millions of dollars worth of transshipped goods from reaching the U.S. market, according to a Customs official.
Betty Small, a field national import specialist based here, gave this report to members of the Carolinas Textile Club during its December meeting.
She is a charter member of Customs’ Textile Production and Verification Team (TPVT) initiative, which began in 1994. This team of import specialists and agents examines information about foreign producers at its “textile clearinghouse,” a.k.a. its strategic trade center in New York, and targets certain manufacturers that export to the U.S. They then visit countries and, working with their governments, verify production numbers as they relate to import figures.
“We look at their machinery, their workers, their skill, their production capacity, their import records for fabric — we look at everything,” Small said. “We verify everything and we’ve had some tremendous results.”
From 1998 to 2001, U.S. Customs conducted more than 50 TPVT visits in 32 countries and performed on-site verifications at 1,783 foreign factory locations, she said. Results of these visits: Customs has detained $171.6 million of textile goods, excluded $52.3 million worth of products and issued $52.3 million in penalties to transshippers, she reported. Also during this time, Customs published the names of more than 425 Hong Kong, 97 Macao, 11 Taiwanese, five Bangladesh and one Indonesian firms engaged in origin fraud.
During the period of May 2001 through May 2002, the department also published the names of 182 factories representing $300 million in imports the previous year that were found closed during the verification team visit. Meanwhile, in calendar year 2001, 243 seizures worth $16.5 million were made.
“During our visits, we try to go into targeted factories,” she said. “But they will close. They will go out of business. They will cancel registrations. They will do anything (to keep us out). As these factories cancel their registrations or close while we are in the country, we immediately send word back to Washington and they will put in the computer to stop all shipments from coming in from those factories because we know they’re transshipping.”
Since that information was logged in the U.S., no additional imports have come in from these factories, she added.
As a member of the TPVT, Small has visited a number of countries in the last few years, including El Salvador, Bulgaria, Romania, Hungary, Macedonia, South Africa, Lesotha, Maritius, the Philippines and Macao. She has taken 10 trips to Hong Kong, most of them a month-long each.
“When we first started going in there, Hong Kong Customs and the Hong Kong trade department were very hostile to us,” Small said. “But we have developed a tremendous relationship with them and work very well with them.”
Hong Kong regularly checks goods at the China border crossing and now reports its enforcement actions monthly to U.S. Customs, she added. In 2001, Hong Kong checked 102,948 shipments, seizing 445 shipments — illegal goods from China — valued at $21 million.
“They were going to export it to the U.S., with the country of origin Hong Kong,” she said.
In addition, more than 400 factories have been convicted, she said.
Besides textile transshipment, two of Customs’ textile priorities are free trade agreement enforcement and uniformity of the enforcement response, Small pointed out.
On the latter point, Customs’ goal is to handle enforcement matters equally at every U.S. port, she said. As such, the department is working with the NC Center for Applied Textile Technology in Belmont, NC, to train and educate import specialists in such areas as trade documentation and production verification, she noted.
Another current initiative relates to Saudi Arabia, which had been the originating country of a number of transshipped goods, according to Small. Since August, all textile and apparel goods — 35 shipments to date — from Saudi Arabia have been detained at U.S. ports.
“When we detain it, we send information to the importer requesting documentation to substantiate the country of origin,” she said. “So far, we have excluded 22 shipments worth $1 million because they could not produce the documentation.”
Meanwhile, with more sub-Sahara African countries beginning to ship to the U.S. under the Africa Growth and Opportunity Act (AGOA) of 2000, Customs has been involved in helping those exporters play by the rules. So far, the department has provided technical training to 16 nations in Africa, assisted 18 countries with their submissions to the U.S. and completed TPVT visits to South Africa, Lesotho, Kenya and Mauritius.
“We are mandated by legislation over the next six years to go into poor African countries every year and verify that they’re doing everything they need to do to qualify for the AGOA,” Small said. “While we are there we also verify that transshipping is not going on. And we anticipate seeing a lot of that going on there. We’ve worked enough with the Chinese and the Indians to know what they’re capable of, so we’re very carefully watching them.”
