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The Department of Homeland Security has announced an enhanced enforcement strategy for the importation of textile products. Two agencies, Customs and Border Protection (CBP) and Homeland Security Investigations (HSI), will work together to identify and investigate possible trade violations. The enhanced enforcement will have a focus on the following remedies:

  • Cracking down on small package shipments. This action will target goods entered duty-free under the $800 de minimis exemption, which has been the subject of much debate and has resulted in the initiation of Congressional action. Congress is expected to pass legislation to address the damage done to US manufacturers due to the disparity in de minimis allowances between the US and our trading partners. An area of heightened concern for de minimis violations is low-cost garments imported from China-based suppliers.
  • Joint operations between CBP and HSI for country of origin and product composition inspections and documentation reviews.
  • CBP will conduct audits and verification visits to high-risk foreign facilities exporting goods under the US-Mexico-Canada Agreement (USMCA), which replaced NAFTA and the Central America-Dominican Republic Free Trade Agreement (CAFTA-DR). CBP is on track to double the number of verification visits from last year. Verification visits are made to ensure that the goods actually qualify under the applicable preferential trade agreement. CBP will look to issue civil penalties for violations, and HSI will conduct criminal investigations if they find them to be warranted.
  • Educating US importers and their suppliers in the USMCA and CAFTA-DR regions to ensure they understand the compliance requirements of the trade agreements.
  • Leveraging US and Central American industry partnerships to facilitate legitimate trade.
  • Expanding the published Entity List established under the Uyghur Forced Labor Prevention Act (UFLPA). UFLPA establishes a rebuttable presumption that any goods produced wholly or in part in the Xinjiang Uyghur Autonomous Region are produced with the benefit of forced labor and, therefore, prohibited from importation.

DHS has been meeting with members of the National Council of Textile Organizations (NCTO) to discuss the challenges facing the US textile industry. The NCTO believes that their industry is a victim of unfair market conditions at the hands of entities violating established preferential trade agreements, skirting UFLPA regulations, and unfairly exploiting the de minimis exceptions.

Enhanced enforcement measures are expected to have a major impact on garment importers. It will also affect importers of textile fabrics and the products that include them. Importers are advised to review documentation for errors and to ensure that suppliers are following the regulations and accurately claiming the applicable preferential trade agreement.

The White House has been pursuing policies to foster economic growth in Northern Central America, and a public-private partnership secured major commitments for Guatemala, El Salvador, and Honduras. This is part of a near-shoring strategy, which they hope will address the root causes of migration to the US. Enhanced enforcement activities seek to ensure that these efforts do not result in unintended benefits for other parties. Some industry groups are concerned that the enhanced enforcement activities will add undue difficulties for importers of compliant products.

 

Best Regards,

Sam McClure, LCB

Director of Compliance & Customs Services

 

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Meet one of CVI’s Customs Brokerage & Compliance experts, Sam McClure:

Sam serves as Director, Compliance and Customs Services for CVI. He serves as CVI’s corporate compliance officer and is responsible for overseeing all aspects of our Customs related services, including growth.

Sam started his career in 1977 with Waters Shipping Company in Charlotte, NC. He began as a document runner, soon becoming a leader in operations and customer service for the branch. Sam, along with Linda Masten, founded Central Carolina Shipping Inc. in 1983 as an independent Customs Brokerage firm where he served as Vice President for 26 years. Sam and Linda grew Central Carolina into a successful and highly respected member of the Carolinas trade community. When Charlotte opened their local chapter of the IFFCBA Sam was part of the organizing group and he headed the Customs committee for several years. Sam obtained his Customs Brokers License in 1984 and remained with Central Carolina until the company was acquired by CVI in 2009.

At CVI, Sam has held several positions in both the operations and sales departments. As an expert in U.S. Customs regulations, Sam is often called upon on to provide guidance to importers on Customs compliance issues. He makes regular presentations on matters related to importation and broader regulatory compliance.

– Sam McClure, LCB, Director of Compliance & Customs Services, CVI
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