California Apparel News

Last month, U.S. Customs inspectors at the Port of Long Beach pulled aside a container of merchandise labeled as brooms. When they pried opened the metal box, not one single broom was inside. Instead, they discovered hundreds of knock-off premiumlabel blue jeans that allegedly were “Made in the U.S.A.”

“More and more, we are seeing the misdescription of goods,” said Janet Labuda, director of the textile enforcement and operations division at U.S. Customs and Border Protection. In the past, apparel imports have often been misidentified as furniture or toys. These days, they are likely to be labeled as kitchen sinks or light bulbs. “It is a rather interesting moving target,” Labuda said.

The customs official was in Los Angeles on May 9 to warn members of the California Fashion Association about the shenanigans that happen when buying goods from overseas companies trying to avoid tariffs or fall below the quota radar. Her talk, held at a CFA-sponsored event at the California Club in downtown Los Angeles, was called “And the Plot Thickens.”

Last year, Americans imported $104 billion in apparel and textiles, up 4 percent from the previous year. For the U.S. government, textiles are a big revenue maker. Of the $25 billion collected in tariffs last year, 42 percent of that came from the textile and apparel industry.

With that in mind, enforcement continues to be a top priority for customs inspectors. In 2006, apparel detentions were way up. Seizures of clothing trying to circumvent quota totaled $103 million compared with $17.7 million in 2005 and $73.5 million in 2004.

In addition, 40 percent of apparel and textiles brought in from countries with a freetrade agreement or trade preference with the United States were non-compliant, meaning they didn’t match all the rules and regulations stipulated under the agreements or were transshipped from outside the free-trade region. “The worst compliance is with NAFTA [the North American Free Trade Agreement, which went into effect in 1994],” Labuda said.

Customs officials continue to visit factories around the world to verify that they really produce clothing. Last year, customs visited 428 factories in 13 countries. Of those, 97 factories had been permanently closed for a long period of time, 95 had high potential for transshipments with no records to show production, and 20 factories refused to open their doors to inspectors. “In Indonesia we attempted to go to 10 factories that didn’t exist except for one that made bottle caps,” Labuda said in a deadpan manner. “I guess you could make dresses out of bottle caps.”

Several customs brokers and customs attorneys in the audience complained that detentions at the local customs offices were taking seven weeks or more to resolve after inspections and document verifications.

Labuda said that later in May, customs officials will be looking at ways to make the inspection program more effective.

“People say we are only hitting the tip of the iceberg,” Labuda said. “We are really trying to play catch-up.” —Deborah Belgum