[Federal Register Volume 59, Number 61 (Wednesday, March 30, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-7518]


[[Page Unknown]]

[Federal Register: March 30, 1994]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Customs Service

19 CFR PART 12

RIN 1515-AB43

 

Importer Certification Regarding Country of Origin of Textiles 
and Textile Products

AGENCY: Customs Service, Treasury.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: This document proposes to amend the Customs Regulations to 
require that an importer of textiles or textile products submit to 
Customs a certification stating that he has used reasonable care to 
ascertain the true country of origin of the imported merchandise and to 
verify the accuracy of the declaration prepared by the manufacturer, 
producer or exporter and filed by the importer with the entry. This 
proposed change is intended to enhance the enforcement of quota limits 
and visa and other requirements under the U.S. textile import program.

DATES: Comments must be received on or before May 31, 1994.

ADDRESSES: Written comments (preferably in triplicate) may be addressed 
to the Regulations Branch, U.S. Customs Service, Franklin Court, 1301 
Constitution Avenue, NW., Washington, DC 20229. Comments submitted may 
be inspected at the Regulations Branch, Office of Regulations and 
Rulings, Franklin Court, 1099 14th Street, NW., suite 4000, Washington, 
DC.

FOR FURTHER INFORMATION CONTACT: Dick Crichton, Office of Trade 
Operations (202-927-0162).

SUPPLEMENTARY INFORMATION:

Background

    Customs continues to encounter significant compliance and 
enforcement problems with regard to the importation and entry of 
textiles and textile products that are subject to the provisions of 
section 204 of the Agricultural Act of 1956, as amended (7 U.S.C. 
1854). Identification of the true country of origin of imported 
textiles and textile products is necessary to ensure compliance with 
quota restrictions and visa requirements or other requirements (for 
example, country of origin marking) under the U.S. textile import 
program and other laws or programs administered by Customs.
    Merchandise that is the product of a country to which restraint 
levels (quotas) or textile visa requirements apply may be entered, or 
attempted to be entered, with a false declaration of country of origin. 
The false claim that the merchandise is the product of a country other 
than the actual country of production may result in the entered 
merchandise not being subjected to any quota level or being subjected 
to a more lenient quota or visa requirement. The entry of textiles and 
textile products into the commerce of the United States under such 
circumstances violates the bilateral and multilateral textile 
agreements to which the United States is a party and causes significant 
injury to domestic producers of textiles and textile products, thereby 
compromising orderly international trade in textiles and textile 
products which is the purpose behind the U.S. textile import program.
    Section 12.130 of the Customs Regulations (19 CFR 12.130) was 
promulgated to set forth rules for determining, and providing 
documentary evidence of, the country of origin of imported textiles and 
textile products. Paragraph (f) of that section concerns documentary 
evidence of origin and provides (1) that all importations of textiles 
and textile products subject to section 204 of the Agricultural Act of 
1956 shall be accompanied by the declaration(s) set forth in paragraph 
(f)(1) (single country declaration, for merchandise whose origin is 
attributable to only one country) or (f)(2) (multiple country 
declaration, for merchandise whose origin is attributable to more than 
one country) and (2) that all importations of textiles and textile 
products not subject to section 204 shall be accompanied by the 
declaration set forth in paragraph (f)(3) (negative declaration, with 
reference to the applicability of section 204). Paragraph (f) further 
provides that the required declaration(s) shall be filed with the entry 
and may be prepared by the manufacturer, producer, exporter or importer 
of the merchandise.
    It is recognized that, under the terms of Sec. 12.130(f), there may 
be instances in which the importer is not the party who prepares a 
declaration required to be submitted under that section. However, 
Customs does not believe that in such instances the importer should be 
totally absolved from responsibility regarding the accuracy of the 
declaration, particularly in view of the fact that under Sec. 12.130(f) 
it is the responsibility of the importer to file the declaration with 
Customs as a condition of entry of the textiles or textile products. In 
other words, because it is the importer and not the manufacturer, 
producer or exporter who has both the greatest commercial interest in 
the import transaction and the ultimate legal responsibility as regards 
the propriety of the import transaction as a whole, including the 
correctness of the documentation submitted to Customs in connection 
therewith, the importer should not be allowed to submit a declaration 
to Customs on blind faith as to its accuracy, and without running the 
risk of incurring a penalty for doing so, merely for the reason that 
the declaration was prepared by another party. To conclude otherwise 
would result in an impermissible loophole in the administration and 
enforcement of the U.S. textile import program. On the other hand, 
Customs also recognizes that where a Sec. 12.130(f) declaration is 
prepared by a manufacturer, producer or exporter, the importer may not 
always be privy to the facts necessary to verify with absolute 
certainty either the true country of origin of the imported merchandise 
or the specific information set forth on the declaration. In such 
circumstances it would be unreasonable to hold the importer to an 
absolute verification standard.
    Customs believes that the Customs Regulations should clearly 
reflect the principles outlined in the preceding paragraph, striking an 
appropriate balance between the basic legal responsibility and 
liability of the importer and what the importer can reasonably be 
expected to accomplish in carrying out that responsibility. Customs 
further believes that the ``informed compliance'' principle underlying 
certain Customs Modernization provisions of the North American Free 
Trade Agreement Implementation Act (Title VI of Pub. L. 103-182, 107 
Stat. 2057, 2170), coupled with the ``reasonable care'' standard in 
discharging an importer's responsibilities under 19 U.S.C. 1484 as 
amended by section 637 of that Act, provide appropriate guidance for 
striking such a balance. In House Report No. 103-361, the Committee on 
Ways and Means discussed the principles of ``informed compliance'' and 
``reasonable care'' in part as follows (at pages 120-121):

    In the view of the Committee, for ``informed compliance'' to 
work, it is essential that the importing community and the Customs 
Service share responsibility in seeing that, at a minimum, 
``reasonable care'' is used in discharging those activities for 
which the importer has responsibility. These include, but are not 
limited to: furnishing of information sufficient to permit Customs 
to fix the final classification and appraisal of merchandise; taking 
measures that will lead to and assure the preparation of accurate 
documentation and providing sufficient pricing and financial 
information to permit proper valuation of merchandise.
* * * * *
    To the extent that an importer fails to use reasonable care in 
classifying and valuing the merchandise and presenting other entry 
data, the Customs Service may impose a penalty under the appropriate 
culpability level of 19 U.S.C. 1592. * * *

    Accordingly, based on the above, Customs in this document is 
proposing to amend Sec. 12.130(f) by the addition of a new paragraph 
(f)(4) to provide for the submission by the importer of a statement 
certifying that the importer has used reasonable care to ascertain the 
true country of origin of the imported textiles or textile products and 
to verify the accuracy of each declaration required to be submitted 
under paragraphs (f)(1)-(3). The certification would only be required 
when a declaration was prepared by a party other than the importer and 
could be either included on, or attached to, the declaration to which 
it relates.

Comments

    Before adopting the proposed amendment as a final rule, 
consideration will be given to any written comments (preferably in 
triplicate) timely submitted to Customs. Comments submitted will be 
available for public inspection in accordance with the Freedom of 
Information Act (5 U.S.C. 552), Sec. 1.4, Treasury Department 
Regulations (31 CFR 1.4), and Sec. 103.11(b), Customs Regulations (19 
CFR 103.11(b)), on regular business days between the hours of 9 a.m. 
and 4:30 p.m. at the Regulations Branch, Office of Regulations and 
Rulings, Franklin Court, 1099 14th Street, NW., Suite 4000, Washington, 
DC.

Executive Order 12866

    This document does not meet the criteria for a ``significant 
regulatory action'' as specified in Executive Order 12866.

Regulatory Flexibility Act

    Pursuant to the provisions of the Regulatory Flexibility Act (5 
U.S.C. 601 et seq.), it is certified that, if adopted, the proposed 
amendment will not have a significant economic impact on a substantial 
number of small entities. The amendment involves only a short 
certification as a necessary adjunct to the existing legal 
responsibility of importers regarding the submission of correct 
documentation to Customs. Accordingly, the proposed amendments are not 
subject to the regulatory analysis or other requirements of 5 U.S.C. 
603 and 604.

List of Subjects in 19 CFR Part 12

    Customs duties and inspection, Entry procedures, Imports, Textiles 
and textile products.

Proposed Amendment to the Regulations

    For the reasons set forth above, it is proposed to amend part 12, 
Customs Regulations (19 CFR part 12), as set forth below.

PART 12--SPECIAL CLASSES OF MERCHANDISE

    1. The authority citation for part 12 continues to read in part as 
follows:

    Authority: 5 U.S.C. 301, 19 U.S.C. 66, 1202 (General Note 17,) 
Harmonized Tariff Schedule of the United States (HTSUS)), 1624;
* * * * *
    2. Section 12.130 is amended by adding paragraph (f)(4) to read as 
follows:


Sec. 12.130  Textiles and textile products country of origin.

* * * * *
    (f) * * *
    (4) Importer certification. If any declaration required under 
paragraph (f) of this section was prepared by the manufacturer, 
producer or exporter of the textiles or textile products and not by the 
importer thereof, the importer shall include on, or as an attachment 
to, each such declaration the following statement:

    I certify that I have used reasonable care to ascertain the true 
country of origin of the articles covered by the (above) (attached) 
declaration and that I have used reasonable care in verifying the 
accuracy of the other information set forth on that declaration.

Date -----------------------------------------------------------------
Name -----------------------------------------------------------------
Signature ------------------------------------------------------------
Title ----------------------------------------------------------------
Company --------------------------------------------------------------
Address --------------------------------------------------------------

    Approved: March 21, 1994.
Samuel H. Banks,
Acting Commissioner of Customs.
John P. Simpson,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 94-7518 Filed 3-29-94; 8:45 am]
BILLING CODE 4820-02-P