CBP Reports Textile IPR Seizures, Value of Penalty Actions Down Slightly in FY 2012
CBP posted its fiscal year 2012 textile and apparel enforcement statistics showing that textiles and apparel seized for intellectual property rights (IPR) violations fell slightly from a year earlier. The number of non-IPR smuggling seizures nearly doubled while the domestic value of the seizures grew more than seven-fold, to $7.48 million, compared to the previous year, said CBP.
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For FY 2012 (October 1, 2011-September 30, 2012), textiles and apparel continued to be politically and economically sensitive commodities, said CBP. Complex regulations and the increasing number of free trade agreements (FTAs) and trade preference programs, each with unique requirements, create opportunities for fraud, said CBP. The risk to the industry was seen as significant enough to warrant designation as a Priority Trade Issue (PTI) and therefore focused attention of CBP resources. (See ITT’s Online Archives 12010414 and 12011314 for summaries of textiles and apparel and IPR enforcement as PTIs.)
FY 2012 Statistics
CBP states the below statistics reflect the results of its assertive approach to textile enforcement and efforts combat the threat of transshipment, quota and evasion, and improper/misleading country of origin marking.
Quota and IPR Seizures
CBP provides the following seizure statistics of quota/visa and intellectual property rights (IPR) violations:
| Activity | Q1 | Q2 | Q3 | Q4 | 2012 Total |
| Quota/Visa | 0 | 0 | 0 | 0 | 0 |
| IPR Number | 1,905 | 1,837 | 1,628 | 1,804 | 7,7174 |
| IPR Value | $3.36 M | $1.83 M | $5.99 M | $3.26 M | $14.44 M |
(The total IPR seizures fell slightly from 7,711 in FY 2011, with the value of the seizures also falling from $14.47 million.)
Commercial Fraud Penalties
CBP provides the following statistics for commercial fraud penalties:
| Q1 | Q2 | Q3 | Q4 | 2012 Total | |
| Number | 9 | 2 | 6 | 4 | 21 |
| Value | $21.31 M | $.058 M | $1.61 M | $.396 M | $23.37 M |
(This represents a decrease from FY 2011, in which there were 48 penalties valued at $27.32 million.)
Liquidated Damages
CBP provides the following liquidated damages statistics:
| Q1 | Q2 | Q4 | 2012 Total | |
| Textiles | 371 | 140 | 177 | 835 |
| FVE (Entry) | 357 | 125 | 169 | 798 |
| FVE (TIB) | 0 | 3 | 0 | 1 |
| FVO (Other) | 0 | 0 | 0 | 0 |
| FVR (Redelivery) | 13 | 15 | 8 | 36 |
(This is an increase compared to FY 2011, during which there were 746 liquidated damages for textiles, 712 for Entry, 3 for TIB, 0 for Other, and 28 for Redelivery.)
Textile Production Verification Teams (TPVTs)
CBP utilizes TPVTs to conduct on-site verification of foreign textile and wearing apparel manufacturers. These teams review and verify production capability and compliance with the terms of FTAs and trade preference programs. CBP states the TPVT visits help deter circumvention of the preference program requirements, as well as educate foreign governments and manufacturers.
CBP provides the following TPVT illegal transshipment and preference claim statistics:
Illegal Transshipment
| Q1 | Q2 | Q3 | Q4 | 2012 Total | |
| Countries Visited | 0 | 3 | 3 | 3 | 9 |
| Factories Visited | 0 | 57 | 65 | 52 | 174 |
| % Discrepant | N/A | 19% | 29% | 31% | 26% |
Trade Preference Claims
| Q1 | Q2 | Q3 | Q4 | 2012 Total | |
| Countries Visited | 0 | 3 | 3 | 3 | 9 |
| Factories Visited | 0 | 57 | 65 | 52 | 174 |
| % Discrepant | N/A | 32% | 51% | 33% | 39% |
Examinations
CBP provides the following examination statistics:
| Q1 | Q2 | Q3 | Q4 | 2012 Total | |
| Total Number | 2,158 | 1,510 | 3,190 | 3,197 | 10,055 |
| Discrepant | 273 | 175 | 248 | 412 | 1,108 |
| % Discrepant | 13% | 12% | 7% | 13% | 11% |
Audits
CBP provides the following statistics for audits:
| Q1 | Q2 | Q3 | Q4 | 2012 Total | |
| Number of Audits/Initiated | 12 | 8 | 9 | 10 | 39 |
| Number of Audits/Completed | 8 | 9 | 11 | 8 | 40 |
| Recommended Recoveries | $458 K | $504 K | $114 K | $286 K | $1.36 M |
(This represents an increase compared to FY 2011, during which there were 36 audits initiated, 40 of which were completed. The recommended recoveries in FY 2011 were much higher -- $6.499 million.)
Laboratory Analyses
CBP provides the following laboratory analyses statistics:
| Q1 | Q2 | Q3 | Q4 | 2012 Total | |
| Number of Samples Tested | 241 | 302 | 257 | 214 | 1,014 |
| Discrepant | 125 | 170 | 159 | 118 | 572 |
| % Discrepant | 51.9% | 56.3% | 61.9% | 55.1% | 56.4% |
Special Enforcement Operations (SEO)
CBP provides the following statistics for SEO:
| Q1 | Q4 | 2012 Total | |
| Number of SEO Initiated | 2 | 0 | 4 |
| Number of SEO Completed | 2 | 4 | 6 |
(See ITT's Online Archives 12011913 for summary of CBP's FY 2011 textile and apparel enforcement statistics.)