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Customs Issues Latest Guidance For Verifications Of Trade Preference Claims (Textiles & Wearing Apparel)

Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP Update

As importers of textiles and apparel have observed in recent years, verifications of duty-free / preferential duty claims can oftentimes involve dizzying requests for a myriad of extremely detailed documents — with claims being subject to rejection for seemingly inconsequential omissions or minor inconsistencies. The exercise has been further complicated by differing interpretations among the ports as to the nature of the required documents.

In its latest effort to provide uniformity and clarity on the issue, U.S. Customs and Border Protection (“Customs”) has recently issued additional guidance to the field and the trade. Highlights of the latest guidelines (which were developed based on inquiries into port practices, importer comments, and recent protest decisions) include the following:

• With the exception of the NAFTA Certificate of Origin, no specific format for origin certifications or affidavits of origin is required (provided they include all relevant required information).

• When the satisfaction of a claim is not immediately apparent from the documents, they should be organized (and possibly numbered) and accompanied by a clear written explanation.

• If a document covers more materials than were used in production of the goods under review, an accompanying note should identify the relevant materials.

• Where Customs officials identify omissions caused by oversight or inaccurate translations, they should seek clarifications and additional information that could be supportive of the claim.

• A duty preference claim should not be denied based on the absence of a document Customs did not request. However, if Customs issued a broad request for supporting documentation and the information was not provided in any format, denial would be appropriate.

• Customs will consider an affidavit stating that a material “was or will be sold” (as opposed to simply “was sold”) to be ambiguous. If an affidavit is deemed ambiguous or incomplete, CBP may require records clarifying the ambiguity (e.g., purchase orders, invoices, bills of lading, etc. demonstrating when the materials were actually sold).

• Affidavits should be signed. If unsigned (or where other affidavit questions are raised), Customs may contact the affidavit issuers to confirm validity.

• An affidavit may, but need not, appear on letterhead. A letterhead that implies that the company produces a material other than that in question should not be used to deny a claim.

Finally, the Customs memorandum encourages ports to reach out to importers for explanations that may help to prevent the filing of unnecessary protests as well as to educate importers where potential deficiencies in preference program record retention and submissions are identified. At the same time, importers are reminded not to submit carelessly prepared submissions with the expectation that Customs will repeatedly request clarification and corrections.

Should you have any questions concerning the recent Customs guidance or documenting preference program claims in general, please contact Arthur W. Bodek.