Apparel, Footwear and Textile Center of Excellence and Expertise

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1 Apparel, Footwear and Textile Center of Excellence and Expertise 1

2 Goals of Centers 1. Facilitate legitimate trade through effective risk segmentation - Utilize account based methods to process trade - Expand partnerships - move more importers to trusted trader status - Develop and implement comprehensive strategies to manage risk 2. Increase industry-based knowledge within CBP - Advance bi-directional education to raise industry knowledge - Engage industry groups and key stakeholders - Bring all of CBP s expertise to bear on a single industry in a virtual environment 3. Enhance enforcement and address industry risks - Leverage industry to identify issues of mutual interest to provide CBP with targeting, enforcement, and/or intelligence information Trade Intelligence - Coordinate enforcement efforts by industry to address unique risks 2

3 Projected End State Procedures Port of Entry Cargo release/admissibility Inbond Warehouse entries Bonded warehouses Submit necessary documentation for release Adhere to current regulations ALL processes will remain at the ports Drawback Center Centers of Excellence and Expertise Entry Summaries (ACS/ACE) EIP/RLF Rejections/Cancellation Census Warnings CBP 28 and 29 AD/CV Revenue Collection Reconciliation FTZ NO CHANGE TO EXSITING SHIPPING PATTERNS Quota Entries Post-Summary Corrections Post-Entry Amendments Internal Advice Protests/Petitions Prior Disclosures Temporary Importations under Bond (TIB) Liquidation 3

4 Benefits of Centers Action Eliminates unnecessary duplicative work from compliant imports Ports of Entry focus shifts to high-risk shipments Centralized office for trade inquiries Cross-functional expertise Benefits Fewer cargo delays Reduced costs Greater predictability More complex enforcement work Improved enforcement results: o Increased import safety o Increased revenue protection o Reduced economic loss to IPR theft Improved relationship with CBP as small/medium-sized importers have a streamlined inquiry process for resolving concerns Increased uniformity and transparency for the trade Environment for in-depth learning to increase CBP expertise and therefore enforcement 4

5 Current Centers of Excellence and Expertise Buffalo Industrial & Manufacturing Materials San Francisco Apparel, Footwear & Textiles Chicago Base Metals Detroit Automotive & Aerospace New York Pharmaceuticals, Health & Chemicals Los Angeles Electronics Atlanta Consumer Products & Mass Merchandising Laredo Machinery Houston Petroleum, Natural Gas & Minerals Miami Agriculture & Prepared Products

6 Center Schedule Opening Dates Year FY 2012 April 2013 June 2013 Center Pharmaceuticals, Health & Chemicals Electronics Automotive & Aerospace Petroleum, Natural Gas & Minerals Base Metals Industrial & Manufacturing Materials Machinery Agriculture & Prepared Products Apparel, Footwear & Textiles Consumer Products & Mass Merchandising 6

7 Apparel, Footwear and Textile Center of Excellence and Expertise Organizational Chart DIRECTOR DORA MURPHY Partnership Branch Enforcement Branch Validation & Compliance Branch 7

8 LSS integration into the CEE Many trade issues addressed by the Centers are scientific or engineer related. Laboratories and Scientific Services (LSS) will integrate into the Centers to provide a uniformed approach to facilitation and enforcement. Each CEE will be assigned a primary and alternate LSS Center Technical Advisors (CTA). CTAs will remain under the LSS organization structure, but directly assist the CEEs on a variety of issues: C/O determinations, Classification opinions, IPR determinations, Exclusion Orders, etc. Primary CTA for the AFT CEE will be the Lab Director from San Francisco. 8

9 Apparel, Footwear & Tex0le Center of Excellence & Exper0se Laboratories and Scientific Services Primary Center Technical Advisor Alternate Center Technical Advisors HQ Science Officer CEE Director Dora Murphy Deputy Director Vacant Assistant Director Enforcement Assistant Director Validation & Compliance Vacant Assistant Director Partnership Branch Chief Vacant Branch Chief Branch Chief Branch Chief Matrix Members: Core Members: Import Specialist Senior Import Specialists Program Manager Asst. Port Director Interna0onal Trade Specialists Opera0on Specialists Senior Import Specialists Import Specialist Supervisory Import Specialists Supervisory Interna0onal Trade Specialist Auditor Field Analysis Specialist Supply Chain Security Specialists Core Members: Import Specialists Senior Import Specialists Entry Specialists Supervisory Entry Specialist Na0onal Account Managers Matrix Members: Import Specialists Senior Import Specialists Supervisory Import Specialists Na0onal Import Specialist Asst. Na0onal Import Specialist

10 PARTNERSHIP 10

11 AFT Center Partnership Branch Goals Ensure Uniformity Create Efficiencies Reduce Redundancies Enhance Industry Expertise Facilitate Trade 11

12 AFT Center Partnership Branch The AFT CEE Partnership Branch is comprised of: Entry Specialists Supervisory Entry Specialists Import Specialists Senior Import Specialists Supervisory Import Specialists National Account Managers National Import Specialists National Import Specialist Assistants 12

13 AFT Center Partnership Branch, Cont. The Partnership Branch currently contains Core and Matrix members located nationwide. The AFT Center Director has direct oversight of the Partnership Branch. The Assistant Director, Partnership, and Branch Chiefs oversee day-to-day operations. The Partnership Branch is organized by Account. Currently there are eight Participating Accounts. To better ensure uniformity, processing of the participating account s entry summaries and post entry summary activity is performed by Partnership employees assigned to the account. 13

14 Cargo Release The AFT Center Partnership Branch runs cargo hold reports works with ports of entry to resolve holds and expedite release monitors cargo exams and exam time frames works with ports of entry to expedite exams 14

15 Entry and Post Entry Summary Processing The Partnership Branch performs certain entry and post entry summary functions for participating accounts and works to ensure uniformity and create efficiencies. 38,509 entry summaries with a total value of $3,121,444,805 have been filed for participating accounts as of the AFT Center s operational date of 07/10/13. Centers of Excellence and Expertise Test Guidelines: Responsibilities and Procedures for Participating Accounts and Their Brokers, Agents, or Filers is posted on CBP.gov. These guidelines are updated periodically. 15

16 Post Entry Summary Processing For participating accounts, certain entries filed prior to and after the implementation date of the AFT Center can be submitted to the Center for Post Summary processing. Post entry summary processing includes protests and petitions, post entry amendments, post summary corrections and cancellation requests. Reconciliation entries should currently be filed at the assigned port of entry and drawback claims should be filed at one of the four existing Drawback centers. 16

17 Achievements Resolved holds Expedited cargo release Reduced number of CBP Form 28s issued Reduced number of samples requested Reduced number of documents provided to CBP Expanded training within CBP for Apparel, Footwear and Textile importations 17

18 Way Forward Expand number of Participating Accounts Establish Pre-Classification Program Continue focus on: Streamlining entry summary and post entry summary processing Expediting cargo release Reducing paperwork Initiate bi-directional training CBP training for the AFT industry on key issues AFT industry training for CBP 18

19 Pre-Classification Program The Partnership Branch is working on creating a Pre- Classification program for Apparel, Footwear, and Textiles. Pre-classification will be a program to provide importers with classification advice prior to importation and entry. The Pre-Classification option is intended for participating accounts and will be conducted in the AFT Center s virtual environment. The Partnership Branch welcomes feedback and input from the AFT industry on its implementation. 19

20 ENFORCEMENT 20

21 Apparel, Footwear and Textiles Import Highlights $131.6 billion in footwear, textile, wearing apparel products come into the U.S. (5.5% of all imported value) Top 5 countries of origin account for 66% of these imports China ($58.5 billion) Vietnam ($9.6 billion) India ($6.5 billion) Indonesia 4 ($6.2 billion) Mexico ($5.8 billion) Over 64,800 entities import footwear, textiles and wearing apparel 378 entities are ISA (23.9% of imported value) 3,144 entities are C-TPAT partners (62.1% of imported value) 21

22 Apparel, Footwear and Textiles vs. All Imports Textiles CEE FY2010 FY2011 FY2012 %CHG FY11-12 Importers 64.5K 64.2K 64.9K 1% Lines 12.4M 13.5M 15.2M 13% Value $117.7B $133.0B $132.8B 0% Duty $12.3B $14.1B $14.0B 0% FY12 Industry Total All Imports % Overall Importers 64.9K 307.8K 21% Lines 15.2M 123.7M 12% Value $132.8B $2.4T 6% Duty $14.0B $30.0B 47% 22

23 Enforcement Focus on areas of risk 1. Intellectual Property Rights 59% of all FY 12 IPR seizures Undermine domestic producers 2. Trade Agreements 14% of imported value claims preferential treatment False preferential claims undermine trade agreements 3. Revenue Duty collected by CBP on textile and apparel goods still accounts for more than 40% of all duties Misclassification and undervaluation are schemes to evade high duty rates on textiles and footwear 23

24 AFT CEE Enforcement Enforcement activity can take place at time of entry or at postrelease. Some main areas of focus include, but are not limited to the following: Intellectual Property Free Trade Agreements Revenue evasion Transshipment Enforcement actions involving participating accounts will be coordinated with the Center prior to issuance. 24

25 Allegations Allegations can be submitted by the trade directly through the e-allegation (cbp.gov), a Field Office, a Port of Entry or the designated CEE. Within e-allegations, the Report Trade Violations is to be used to report the following illegal trade activity: Misclassification of imports Country of Origin marking issues Textile/Trade violations IPR infringement Export issues Healthy and Safety Issues. All allegations affecting a participating account are to be forwarded to the CEE. 25

26 AFT CEE Operations The goal of our operations is to identify specific violators and take appropriate action without negatively impacting the entire textile/wearing apparel/footwear industry. In addition, our operations will focus on protecting our participating accounts from illegal importing/exporting of their products. The AFT CEE will work with the participating accounts to establish concepts/plans for future operations. 26

27 Special Operation Joint operation by: AFT-CEE PORT OF ENTRY 27

28 Operation Results Four Day Operation Total Intellectual Property Rights Seizures: 147 Total Manfr s Suggested Retail Price: $1,132,414 Total Domestic Value: $385,305 28

29 IPR Recordation The AFT CEE recommendations all Intellectual Property is recorded with CBP. CBP can provide a webinar on How to Record IPR with CBP. All product manuals with recorded trademarks can be submitted to CBP for inclusion in our internal Product ID Guide. The IPR Product ID Guide allows all CBP personnel (e.g., Officers, Import Specialists, Entry Specialists, etc.) immediate access to the recorded trademarks. The IPR Product ID Guide is only for CBP use and can not be viewed by outside stakeholders. 29

30 AFT CEE Enforcement Branch The AFT CEE Enforcement Branch is comprised of Import Specialists, Supervisory Import Specialists, International Trade Specialists, Supervisory International Trade Specialists, Trade Program Managers, Operations Specialists, Asst. Port Directors, Auditors, Supply Chain Security Specialists, and Field Analysis Specialists. The Enforcement Branch currently contains Core and Matrix members. The AFT Director has direct oversight of the Enforcement Branch as the Asst. Director and Enforcement Branch Chief conduct day to day operations. 30

31 COMPLIANCE & VALIDATION (coming soon) 31

32 What Now? Apply to be part of the Apparel, Footwear & Textile Center under the current Federal Register Notice Contact: Dora Murphy Assistant Director, Field Operations, Trade Apparel, Footwear and Textiles Center Director San Francisco Field Office U.S. Customs and Border Protection (415) x

33 33

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