NEWSLETTER
Changes That Might Affect You!!!	March 1st, 2003

In this issue TPL links added C-TPAT and you BRASS FAST Smuggled Clothing hurts Apparel Industry New Measures to Help U.S. Firms to Export Mexican envoy rips immigration bills TPL UPDATE ON OUR WEBSITE TPL Status: We now have 2 new links on our web site (at the bottom of the "Related Links" page). One is to Absolute Quotas for all countries; the other is to TPL Status for Mexico. Our web address is http://www.iab-sd.com/ C-TPAT & You On February 27th the Otay Mesa Chamber of Commerce hosted a breakfast in Mission Valley discussing C-TPAT (Customs Trade Partnership Against Terrorism) and Reconciliation. The speakers included James Snyder, Lina Leyte, Eric Lizano and Cathy Maggi of U.S. Customs. Steve Zisser of The Zisser Group also shared some useful information. James Snyder went over the process of applying for C-TPAT as well as benefits of being C-TPAT certified. This information is available on the Customs web site and will not be covered here. Snyder conceded that C-TPAT really should not be portrayed as a volunteer program for high volume importers. Mr. Snyder stated that the FAST (Free and Secure Trade) Program might take the place of the BRASS (Border Release Advanced Screening and Selectivity) program here in Otay Mesa. The FAST program is currently being used on our Northern Border. The key point is that you must be in C- TPAT to participate in FAST. In-action may not be an option for much longer according to Steven Zisser of the Zisser Group, stating that Customs is currently overwhelmed with applications for C-TPAT and that the closing of C-TPAT is a very real possibility. They made it clear that C-TPAT should not be stated as being voluntary and that importers that are not C-TPAT certified will not be able to be granted into importation Programs such as FAST (Free and Secure Trade) which will may soon replace the Brass Program. If you are a supplier… The large companies may need to be on C-TPAT but does that apply to suppliers? The C-TPAT program main concept is supply chain security. Every aspect of the supply chain must have security procedures in place from raw materials to the final distribution. If you are a large company trying to fill out the C-TPAT " questionnaire" you have to describe the security of your suppliers. Hence, a large company may have to send out a questionnaire to each supplier regarding their security. Steven Zisser sited an example where the large buyer sent out an 18-page questionnaire to the suppliers about their security. The supplier has three choices, fill out the 18-page questionnaire, send back a letter declaring C-TPAT certification or loose the account to his competitor who is C-TPAT certified. As suppliers we always try to make it easy on our customers. Suppliers who are C-TPAT certified are in essence making it easier for their customers to comply with C-TPAT. Suppliers may seriously want to consider trying to join C-TPAT as a way to be one step ahead of the competition. Customs has stated that the C-TPAT program is here to stay; unlike some of the preceding programs it has created. Securing the entire nations border is an enormous task. Our ports are our front lines, and the entire shipping industry in combination with Customs is our defense. We all are united in the common goal, to do every thing to prevent an attack. In addition, U.S. Customs will reserve its best programs for those C-TPAT certified. BRASS By Bruce Nunziata, Director, BRASS Processing Center (Northern Border) Each year, millions of cargo shipments arrive at our northern and southern border ports. Thanks to an improved cargo processing system called BRASS (short for Border Release Advanced Screening and Selectivity), Customs officials are able to expedite the release of high-volume, highly compliant cargo shipments. As a result, importers are able to receive their wares more rapidly, and Customs officials are able to focus more attention on those cargo shipments that require closer inspection. BRASS features both procedural and technological enhancements over its predecessor, the Line Release cargo processing system. By relying on pre-screening of highly compliant and high-volume cargo and the use of barcode technology, BRASS saves time and reduces congestion at the ports. The import community is hailing the introduction of the BRASS system as a significant improvement. To develop the improved procedures, Customs officials asked agency employees and customs brokers for input. One of the keys to better and faster service, they learned, was ensuring data accuracy. To address this issue, the developers of the new system put heavy emphasis on process improvement in the BRASS Processing Centers. Through input and suggestions, the employees designed and refined the procedures used to process applications. To further improve the efficiency of application processing, Customs established northern and southern border BRASS processing centers. In May 1999, the port of St. Albans, Vt., began operating as the Northern Border BRASS Processing where Customs employees process an average of 600 applications every month. The port of Otay Mesa, Calif. became the Southern Border BRASS Processing Center in March 2000. Free And Secure Trade (FAST) (01/06/2003) In the Shared Border Accord with a 30-point action plan, the U.S. and Canadian governments have agreed to align, to the maximum extent possible, their customs commercial programs along their shared border. This agreement marked the creation of the Free and Secure Trade (FAST) program, which is the result of a shared objective to enhance the security and safety of Canadians and Americans, while enhancing the economic prosperity of both countries. The FAST program will allow importers on the U.S./Canada border to obtain expedited release for qualifying commercial shipments. In the spirit of partnership against terrorism, we encourage all U.S./Canadian Importers, Highway Carriers, and Commercial Drivers to apply. FAST/C-TPAT membership will help your company satisfy the security requirements of their customers and service providers and prepare your company for upcoming modifications to FAST that will expand eligible the electronic cargo release methods. FAST U.S. bound commercial cargo release requirements The initial phase of FAST for U.S. Bound commercial shipments, commencing in December 2002, will be available for qualifying commercial shipments at the following U.S./Canadian ports: Blaine-Douglas Detroit-Windsor Port Huron-Sarnia Buffalo-Fort Erie Lewiston-Queenston Champlain-Lacolle To qualify for FAST expedited clearance the commercial shipment must meet the following requirements:     1. Entered by a C-TPAT approved importer: C-TPAT for Importers     Importers are required to participate in C-TPAT.     2. Carried by FAST/C-TPAT approved U.S./Canada Border Highway Carriers     3. Driven by FAST approved commercial drivers:U.S./Canada FAST Commercial Driver Program     4. Cargo Release Method(s) - The FAST cargo release methods will be expanded as the program proceeds.     5. NCAP/FAST processing for FAST will begin in December of 2002. NCAP/FAST is the first completely paperless cargo release mechanism put into place by U.S. Customs. This paperless processing is achieved through electronic data transmissions and transponder technology. NCAP/FAST is highly automated and allows for the expedited release of highly compliant cargo from major importers, reducing congestion at our land borders. NCAP/FAST is the first step toward account based processing as each participant is pre-approved and assigned an ACE I.D. Further NCAP programming development needs to take place under ACE so that account based (periodic billing) entry summary can be achieved.     Pre Arrival Processing System (PAPS) The FAST processing of PAPS shipments is expected to commence within the next year. The Pre-Arrival Processing System (PAPS) is a U.S. Customs ACS (Automated Commercial System) border cargo release mechanism that utilizes barcode technology to expedite the release of commercial shipments while still processing each shipment through Border Cargo Selectivity (BCS) and the Automated Targeting System (ATS). Each PAPS shipment requires a unique barcode label, which the carrier attaches to the invoice and the truck manifest while the merchandise is still in Canada. The barcode consists of the Standard Carrier Alpha Code (SCAC) and Pro-Bill number. This information is then faxed ahead to the Customs broker in the U.S., who prepares a BCS entry in ACS. Upon the truck's arrival at the border, the Customs Inspector scans the barcode, which automatically retrieves the entry information from ACS. If no examination is required, the Inspector then releases the truck from the primary booth, reducing the carrier's wait time and easing congestion at the U.S. border.Any questions regarding C-TPAT or FAST may be directed to: industry.partnership@customs.treas.gov Smuggled clothing robs U.S. of millions By Jeffrey Sparshott THE WASHINGTON TIMES Illegal shipments of clothes and fabric from China are cheating the U.S. government out of millions of dollars and costing American workers their jobs, say industry and government sources. U.S. Customs Service agents seized about $45 million in "wearing apparel" that was shipped illegally or smuggled to the United States last year, a nearly six-fold increase from 2001, the agency said. The clothing, originating mostly in China, is one of the biggest chunks of property that the Customs Service seizes every year as overseas manufacturers try to slip goods into the country, avoiding quotas and millions of dollars in duties. The impact of the illegal goods on North American industry is devastating, the industry says. "It's costing tens of thousand of textile jobs," said Cass Johnson, associate vice president for international trade at the American Textile Manufacturers Institute, a D.C. industry group. "It's a huge problem." The seizures are a fraction of the illegal products that make it into the country. "We're not catching most of what's going on," said Janet Labuda, director of the textile enforcement division at the U.S. Customs Office of Field Operations. Mr. Johnson estimated that billions of dollars in illegal clothes and fabrics make it into the U.S. market. He is worried that the problem will worsen as the United States negotiates and signs more free-trade agreements. The Bush administration this month proposed that fabric and apparel imports become duty-free in five years as part of a Free Trade Area of the Americas. Trade agreements with Morocco, five countries in southern Africa, five in Central America and Australia also are in the works. "That is the big concern right now about expanding trade preferences," Mr. Johnson said. "If we can't even enforce our own borders, how are we going to enforce borders of the entire Western Hemisphere?" One of the major difficulties is tracing the origin of fabric. U.S. trade agreements usually require foreign manufacturers to use U.S.-made fabrics and yarns when cutting and sewing garments for export back to the United States. Use of U.S. components is the trade-off for market access. But it is difficult to determine a yarn or fabric's origin, compromising enforcement efforts. The government and the industry are turning to technology to combat the smuggling and trans-shipment problem. The Commerce Department is funding a project at the Oak Ridge National Laboratory in Oak Ridge, Tenn., to assess technologies that could be used in a textile "marker system" that would allow U.S.-origin products to be scanned and identified. "I think it has the potential for being helpful to the industry," said James C. Leonard, deputy assistant secretary for textiles and apparel at Commerce. "It's not going to solve the problem, but it can help." The U.S. Agriculture Department is working on a separate but similar program at a research facility in Clemson; S.C. Facility officials were not willing to discuss the project. The industry is interested in both projects, which would allow the Customs Service to determine whether fabric has been produced at a U.S. facility. A preliminary report from Oak Ridge is due soon, and a technology prototype could be ready in about a year. "I've always believed there is a technology that can support this industry's need. The key is, is it cost-effective and does it have minimum impact on the conduct of business," said Glenn Allgood, an Oak Ridge researcher. The industry is hopeful. "We're pretty excited about it," said Mike Hubbard, executive vice president of the American Yarn Spinners Association. "If a product claims to be U.S. and it's not, that doesn't benefit our companies." In the meantime, the Customs Service has stepped up its efforts to seize illegal clothes. But official's there worry that new trade deals in the Americas and Africa will complicate enforcement efforts. "It makes our job more complex, it makes it harder," Miss Labuda said. The increase in seizures - to about $45 million in 2002 from $7.8 million in 2001 - reflects stepped-up enforcement and more illegal products being sent from China, she said. "Ninety percent of the problem is China," Miss Labuda said. Some of goods are smuggled outright into the United States, and some are trans-shipped illegally - made in China, sent to another country and labeled as if they were made there with U.S. fabric, and then moved on to the United States. To combat the problem, the Customs Service looks for sources of the trans-shipments. "We have a program in place that is pretty aggressive. We do a lot of data analysis. We go to the countries through which China is moving products. When we realize they don't have the capability to produce the type or amount, we go in," Miss Labuda said. Last year, agents visited more than 530 textile and apparel factories in about a dozen foreign countries; 87 of the factories, named on documents as manufacturers of cloth or apparel, were not even open for business, she said. Despite enforcement, neither the industry nor the government knows the exact magnitude of the problem. "We know there's a lot of fraud, but we don't know how much," Mr. Leonard said. The bottom line is important to the U.S. Treasury, manufacturers and retailers. Textiles and apparel represent about 45 percent of all the duties the Customs Service collects annually. Roughly 55,000 textiles and apparel importers bring goods to the country, accounting for about $80 billion worth of U.S. imports each year, customs officials says. Congress recognized the seriousness of the problem and last year instructed the General Accounting Office to audit the Customs Service's trans-shipment monitoring system. The report will not be complete until late this year, GAO said. BUSH ADMINISTRATION STREAMLINES SERVICES TO HELP US BUSINESSES GROW Agencies Link Trade Information, Counseling, and Financing Services To Expand US Exports and Strengthen Competitiveness The U.S. Department of Commerce and the Export-Import Bank of the United States (Ex-Im Bank) announced new measures today to coordinate export-counseling services and simplify access to financing for U.S. firms that compete for international export sales. Linda Conlin, Assistant Secretary of Commerce for Trade Development, and Eduardo Aguirre, Ex-Im Bank Vice Chairman, signed two memorandums of understanding (MOUs) that strengthen inter-agency cooperation to support U.S. exporters. "This Administration is committed to expanding trade opportunities in global markets," Conlin said. "We are streamlining our services so we can help U.S. businesses be more competitive as they seek to grow and create more jobs for American workers." "These agreements exemplify how the Trade Promotion Coordinating Committee (TPCC) is successfully bringing together government resources on behalf of U.S. exporters," Aguirre said. "The goal is to leverage what each agency does best so that both large and small U.S. businesses can increase overseas sales and support jobs here at home." Commerce and Ex-Im Bank signed two MOUs. The first MOU simplifies access to financing for U.S. exporters. When companies contact Commerce's Trade Advocacy Center for help procuring foreign commercial contracts, they will also be referred to Ex-Im Bank for information on export financing. This change reflects input directly from U.S. businesses, which recommended that Commerce's Advocacy Center and Ex-Im Bank coordinate in promoting U.S. exports. The second MOU allows individuals who call Ex-Im Bank's toll-free 1-800-565-EXIM line seeking general export and trade-finance assistance or information on federal trade programs to be directly routed to Commerce's award-winning Trade Information Center (TIC). The TIC's highly trained staff provides counseling and information to nearly 70,000 customers annually on export start-up, documentation, country and customs requirements, and other federal trade resources. Ex-Im Bank staff is also at the TIC to answer inquiries on Ex-Im Bank programs. The TIC can be reached at 1-800-USA-TRADE, or online at http://www.export.gov/tic. The Office of Trade Development (TD) at the U.S. Department of Commerce offers U.S. businesses resources and services for all stages of the exporting process. With industry-focused experts to provide strategic research and analysis, TD helps small and large U.S. businesses access the global marketplace. TD also administers 1-800-USA-TRADE, a nationwide hotline available to companies seeking government export assistance and counseling. Ex-Im Bank is an independent U.S. government agency that helps finance the sale of U.S. exports, primarily to growth markets throughout the world, by providing guarantees, insurance, and loans. In fiscal year 2002, Ex-Im Bank supported nearly $13 billion of U.S. exports worldwide. Contact: Victoria Park, Commerce Dept. (202) 482-0310 Andrew Yarrow, Ex-Im Bank (202) 565-3200 Mexican envoy rips immigration bills By Daniel Gonzalez The Arizona Republic Feb. 12, 2003 Breaking away from the usual etiquette of international diplomacy, Mexico's highest-ranking official in Arizona on Tuesday condemned proposed state laws aimed at clamping down on undocumented immigrants. Expressing doubts that the bills targeting illegal immigration will pass, Ruben Beltran, the Mexican consul general in Phoenix, said the proposals are dividing a state where the Latino population is booming. "We are witnessing initiatives by legislators in a way that will create a divide in the community and disrupt the social cohesion of the state," Beltran said during a community breakfast in Phoenix that focused on recommendations from last fall's Arizona Town Hall on Hispanics in Arizona. Rep. Randy Graf, R-Green Valley, took exception to Beltran's comments, contending that something has to be done to control illegal immigration. He estimated that it costs the state a billion dollars a year in education, hospital care and law enforcement along the border. "I've received many e-mails in support of my bill from Hispanics who immigrated here legally," said Graf, the sponsor of a bill that would bar state agencies and local governments from accepting IDs issued by Mexican consulates as valid forms of identification. Undocumented immigrants use the IDs to cash checks and corroborate their identity to local authorities. Beltran emphasized that he respects the state's internal political process. But he said the anti-immigration bills are "fundamentally" at odds with the Town Hall report, which calls on Arizona to spearhead a national guest worker program with Mexico to more fully integrate Latinos and Latino immigrants into the state's economic and educational mainstream. The bills also ignore immigrants' contributions to the economy, Beltran said. But Graf countered, "To what extent can the state of Arizona afford to spend a billion dollars on illegal immigration?" As part of the 81st Arizona Town Hall, 131 Arizonans from private corporations, non-profit organizations and local governments spent four days in October discussing Arizona's booming Latino population, which during the 1990s grew by almost 90 percent. Latinos now make up more than one in four people in Arizona. The Town Hall concluded that Latinos in Arizona represent a huge resource that hasn't been fully tapped. It recommended more efforts to promote the contributions Latinos have made to the state's culture, language and history, said Shirley Agnos, Town Hall president. "We need to awaken to the positives, instead of just the negatives," she said. The report said the state's educational system is not meeting the needs of the increasingly Latino student population, said Fred Lockhart, executive director of Arizona Private School Association. The report recommends identifying programs that have demonstrated success in helping all students achieve, he said. "I'm frightened. I really am," said Lockhart, chairman of the Arizona Minority Education Policy Analysis Center. "Our burgeoning Hispanic population plus our lack of investment in education spells disaster." The Town Hall also concluded that English fluency is critical to the economic and educational success of immigrants, said Katharine Halpin, CEO of Katharine Halpin & Co., a consulting firm. "However, we believe the Spanish language should be encouraged and is a very valuable asset in Arizona."