California Apparel News

With the new year fast approaching, there are some new rules and regulations on board for importing apparel.

First off are quotas. Quotas on Chinese-made apparel end on Dec. 31, 2008. That sounds simple and easy. But here’s the tricky part about bringing in goods around the beginning of the year.

If you ship quota goods without quota prior to Jan. 1, 2009, and they arrive after Jan. 1, your goods may be embargoed when they reach the United States.

Even for goods shipped in January, be prepared to prove when they were shipped from Asia. Goods sent on or after Jan. 1, 2009, could face delays in being released if the right documents aren’t available to prove they left China (and not Hong Kong) after the beginning of the new year.

One of the major questions looming right now is whether apparel and textile quotas could return in 2009. The simple answer is yes.

While the Chinese textiles-specific safeguards are expiring, global safeguards are still in place (and have actually been used on some items).

Global safeguards can be requested by the United States International Trade Commission if it sees local market disruption. If trade experts feel China’s apparel imports are flooding the market, the ITC could make recommendations to the president to invoke safeguards.

Thus, quotas could be re-instated or additional duties could be levied on Chinese-made apparel.

In addition, other restrictions on Chinese-made apparel could pop up in the form of “non-tariff” barriers.

Those barriers could be anti dumping duties if the United States believes China is selling goods for less than they cost to make or sell in China.

There are also countervailing-duty investigations to see whether countries are subsidizing their exports. They result in countervailing duties that add to the cost of a garment or fabric.

Either one of these would have a devastating effect on trade on any product subjected to an investigation. In a book called “Fair Trade Fraud,” James Bovard details how various types of trade restrictions work. It’s worth a look to brush up on possible restrictions that could affect apparel importers. More rules and regulations

In recent months, we have also seen a flurry of laws and regulations being imposed. The Consumer Product Safety Improvement Act (CPSIA) and the Lacey Act are among a host of new rules and regulations that importers are responsible for following.

On Aug. 14, President Bush signed CPSIA into law. Part of this law encompasses rules and regulations primarily for childrenswear that must be tested for flammability and harmful chemicals. If these products are not deemed safe, they may not be able to get through customs.

The Lacey Act requires importers bringing in goods made from plants or trees to declare the genus and species of all plant inputs and their country of origin to make sure they are not harvested illegally or are in violation of foreign laws. Customs hasn’t defined the extent yet of this act, but it could be applied to apparel that has wooden buttons or is made of rayon or cotton.

Additionally, there are new import security regulations, known as “10 Plus 2,” going into effect in January. The regulations require importers to file additional information on their electronic shipping manifests. Those additional items include names of the manufacturer, seller, consolidator, buyer, country of origin and delivery location.

Also, there are new air-freight security measures being imposed by the Transportation Security Administration. These regulations are complex, and there are onerous penalties for violating most of these new rules.

In the past, Customs and Border Protection has been very much aware of the level of smuggled goods that have made it to market, despite the agency’s best efforts to stop the smugglers.

CBP can detain goods and deny imports if they feel there is something fishy with the goods, whether that is justified or not.

I have seen importers wrongly penalized when importing goods from countries that have free-trade agreements with the United States. Importers have seen customs unfairly detain shipments for trademark violations. In many cases, CBP is very slow to respond to importers who have goods detained.

Next year, customs will have additional resources currently being used to check quota issues and has promised to use these resources in other areas of enforcement. They are expected to focus on “corporate identity theft,” valuation (undervaluation), fraudulent use of free-trade agreements and more enforcement of intellectual-property rights. CBP is also expected to focus on the new CPSIA rules.

To avoid lengthy delays in receiving cargo, and to avoid costly customs penalties, you should take time to review your import program as soon as you can.

Robert Krieger is president of Krieger Worldwide in Los Angeles, an international freight forwarder and customs brokerage founded in 1965. He can be reached at rkrieger@nkinc.com.