1

Apparel, Footwear and Textile

Center of Excellence and Expertise

2 2

Respond to the dynamic trade environment

Bring all of CBP expertise together on a single industry at the

national level

Deliver greater consistency and harmonization

Align CBP processes with modern business practices

Enhance industry-based knowledge

Implement manage-by-account practices

Why Centers?

Intellectual

Property Rights

Anti-Dumping

Countervailing

Duties (ADCVD)Import Safety

Textiles

Revenue

Agriculture

Trade

Agreements/

Preference

Programs

Trade Complexity

3 3

What are Centers?

Virtual organizations that leverage

technology to bring work to the Center

Coordinated from a strategic location

Aligned by key industry sectors

Bring existing expertise together to

authoritatively facilitate trade

Provide a single point of processing for

participating importers

Serve as resource to the broader trade

community and to CBP’s U.S.

government partners

CEE

4 4

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

5

How Centers Operate

• ACME Apparel was importing into

60 Ports of Entry (POE), with 60

ports conducting reviews.

• Instead of 60 ports making decisions

on ACME Apparel entries, they would

now be reviewed by the Apparel,

Footwear & Textiles Center of

Excellence which is coordinated from

San Francisco, CA.

Previously Center Operations

San Francisco

Apparel,

Footwear &

Textiles

Los Angeles

Electronics

Laredo

Machinery

Centers of Excellence and Expertise

Houston

Petroleum,

Natural Gas &

Minerals Miami

Agriculture &

Prepared

Products

Atlanta

Consumer

Products &

Mass

Merchandising

Chicago

Base Metals Detroit

Automotive &

Aerospace

Buffalo

Industrial &

Manufacturing

Materials

New York

Pharmaceuticals,

Health &

Chemicals

7

Year Center

FY 2012

Pharmaceuticals, Health & Chemicals

Electronics

Automotive & Aerospace

Petroleum, Natural Gas & Minerals

Spring

2013

Base Metals

Industrial & Manufacturing Materials

Machinery

Summer

2013

Agriculture & Prepared Products

Apparel, Footwear & Textiles

Consumer Products & Mass Merchandising

Center Schedule

7

8

Benefits of Centers

Action Benefits

Eliminates unnecessary duplicative work from compliant imports

Fewer cargo delays

Reduced costs

Greater predictability

Ports of Entry focus shifts to high-risk shipments

More complex enforcement work

Improved enforcement results: o Increased import safety o Increased revenue protection o Reduced economic loss to IPR theft

Centralized office for trade inquiries

Improved relationship with CBP as small/medium-sized importers have a streamlined inquiry process for resolving concerns

Increased uniformity and transparency for the trade

Cross-functional expertise Environment for in-depth learning to increase CBP expertise and therefore enforcement

9

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 ($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)

Apparel, Footwear and Textile

Center of Excellence and Expertise

Organization Chart

10

DIRECTOR

DORA MURPHY

Enforcement

Branch

Validation &

Compliance

Branch

Partnership

Branch

Apparel, Footwear & Textile

Center of Excellence & Expertise CEE Director

Dora Murphy

Deputy Director

Vacant

Assistant Director

Enforcement

Branch Chief

Core Members:

Import Specialist

Senior Import Specialists

Program Manager

Matrix Members:

Asst. Port Director

International Trade Specialists

Operation Specialists

Senior Import Specialists

Import Specialist

Supervisory Import Specialists

Supervisory International Trade Specialist

Auditor

Field Analysis Specialist

Supply Chain Security Specialists

Assistant Director

Validation & Compliance

Vacant Assistant Director

Partnership

Branch Chief

Vacant

Core Members:

Import Specialists

Senior Import Specialists

Entry Specialists

Supervisory Entry Specialist

National Account Managers

Matrix Members:

Import Specialists

Senior Import Specialists

Supervisory Import Specialists

National Import Specialist Asst.

National Import Specialist

Branch Chief

Laboratories and Scientific Services

Primary Center Technical Advisor

Alternate Center Technical Advisors

HQ Science Officer

Branch Chief

PARTNERSHIP

12

AFT Center Partnership Branch

13

The AFT CEE Partnership Branch is comprised of:

Import Specialists

Senior Import Specialists

Supervisory Import Specialists

Entry Specialists

Supervisory Entry Specialists

National Account Managers

National Import Specialist Assistants

National Import Specialists

The AFT CEE

Partnership Branch

currently contains:

Core and Matrix

Members

AFT Center Partnership Branch

The Assistant Director, Partnership, and Branch Chiefs

oversee day-to-day operations.

The Partnership Branch is organized by Account.

Currently there are 26 participating accounts in the AFT

Center; 20 are ISA and 6 are C-TPAT.

14

Industry Percentages

15

Total Lines Total Value Total Estimated

Duty

14,467,299 $124,076,332,889 $13,404,476,056

Total FY 2013 AFT Industry:

Total FY13 Activity for AFT Center Partners:

Total Lines Total Value Total Estimated

Duty

2,214,931 $23,679,526,901 $3,242,337,785

% FY13 Industry Activity for AFT Center Partners:

Lines Value Estimated Duty 15.3% 22.3% 24.2%

Role of the AFT Center NAM

- Annually analyzes account import trade data, identifies

potential risks and trends, and provides to account.

- Schedules conference calls with account and AFT Center

- Main point of contact for account trade issues

- Maintains ISA oversight responsibility

- Reviews ANL and supporting documents and provides

HQ with ANL summary report

16

Role of the AFT Center NAM, Cont.

The AFT Center Partnership Branch runs cargo hold

reports twice a week.

- AFT Center NAM:

- 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

17

Responsibilities for Filers and Brokers

18

• CEE Trade Process Document updated March 2014 and

posted on CBP.gov. Document is updated periodically.

• Filers and brokers are integral partners for the Center process.

• For certain entry and post entry activities filers and brokers will

interact with the appropriate Center on behalf of the

participating account instead of the port.

• As the CEEs operate in a virtual environment, we receive and

process our work electronically.

Apparel, Footwear, & Textile Center

Contact with AFT Center personnel may be by phone

or email:

E-mail: CEE-Apparel@cbp.dhs.gov

Phone: (415) 744-7706, Monday through Friday (8:00 a.m.

to 5:00 p.m.) Pacific Standard Time

Callers/E-mailers should describe their concerns or

experience and provide contact information

19

Revenue Collection

20

• Revenue collection is handled by the ports of entry.

• When there is $ due: submit docs required to the Center;

however, a cashier/record copy of the entry summary (or

equivalent) must be submitted with the check and/or statement

to the port of entry for collection.

• When No $ is due- submit docs required to the Center.

• If all summaries are paperless and there is no money due, the

statement does not need to be submitted at all.

Entry and Post Entry Summary Processing

21

• The Partnership Branch performs certain entry and post entry

summary functions for participating accounts.

• Currently post entry summary work processed by Centers

generally includes protests and petitions, PEAs, PSCs,

rejections, and cancellation requests.

• For participating accounts, certain entries filed prior to and after

the implementation date of the AFT Center can be submitted to

the Center.

Entry and Post Entry Summary Processing

22

Entry Summaries Currently Processed by

Centers

Entry Type

Free and Dutiable Type 01

AD/CVD * Type 03

Appraisement Type 04

Foreign Trade Zone Type 06

Duty Deferral Type 08

Informal Type 11

Temporary Importation Under Bond Type 23

Trade Fair Type 24

Entry Summary Submission

23

Entry summaries for participating accounts will continue to be

submitted through ACS or ACE. Entry summaries with a “docs

required message” on the summary side can be sent to the

Center using e-mail, ACE, or DIS.

(1) The AFT Center’s email address: CEE-Apparel@cbp.dhs.gov

(2) Automated Commercial Environment (ACE)

(3) The Document Image System (DIS):

CEE-Document –Submission@cbp.dhs.gov

Entry and Post Entry Summary Submissions

Subject Abbreviation

Docs Required DR Census CE Protest PR Cancellation CA Form 28 F28 Form 29 F29 DCMA Cert C TSCA Cert C ADCVD A General Inquiry I PEA PE Reject R Prior Disclosure PD 520(d) 5D

24

• E-mail Subject Line for Center’s E-Mail Address:

Subject line: Subject abbreviation, account name, entry number, port

Subject Abbreviation

Docs Required DR

Census CE

Protest PR

Cancellation CA

Form 28 F28

Form 29 F29

DCMA Cert C

TSCA Cert C

ADCVD A

General Inquiry I

PEA PE

Reject R

Prior Disclosure PD

520(d) 5D

Post Entry Summary

•

• PSCs will continue to be filed as usual. The Center will

process the PSC. If there is a docs required message, the

docs should be transmitted electronically to ACE.

• Reconciliation entries should continue to be filed at the recon

port of entry.

• Drawback claims should be continue to be filed at one of the

four existing Drawback centers; NY, Chicago, SF, or Houston.

25

Post Entry Summary Processing- PEA

• Must be submitted to the Center via the Center’s e-mail or DIS.

• If a participating account submits payment for a PEA, it must

be submitted to the port of entry.

• We recommend that the billing option be checked on the PEA,

so there is only one submission.

• We mark up the PEA document electronically using designated

software.

26

AGREE

Post Entry Summary Processing- Protests

• Can be submitted through ABI or on a scanned CBP Form 19

to the Center’s email address or DIS.

• Recommend use of ABI. A note must be added in the

electronic filing that designates the Center team.

• Mark up the CBP Form 19 using designated software and sign

the form electronically.

1. PROTEST NO. (Supplied by CBP)

2. DATE RECEIVED (CBP Use Only)

27

Partnership Stats – First Year

From July 2013 to July 2014, the Partnership

Branch processed over:

220 Protests

183 Post Summary Corrections

595 Post Entry Amendments

301 Cancellations

28

Partnership Outreach

Industry Associations in person & webinars

Advanced HTS Workshops for Brokers

Associations

Joint webinars with National Import Specialists

Footwear Webinar for ISA Accounts

Critical Communication during 2013 Government

Shutdown

29

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

30

ENFORCEMENT

31

AFT CEE Enforcement Branch

32

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

• Field Analysis Specialists.

The Enforcement Branch currently contains

•Core and Matrix members.

AFT CEE Enforcement

Enforcement activity can take place at time of entry or at post-release

• Intellectual Property

• Free Trade Agreements

• Revenue evasion

• Transshipment

Some main areas of focus include, but are not limited to the following:

Enforcement actions involving participating accounts are coordinated with the Center prior to issuance.

33

Prior Disclosures

CEE participating accounts may continue to submit prior disclosures

at the CBP port of entry of the disclosed violation, or file the PD with

the AFT CEE.

AFT CEE Enforcement Branch will review all Prior Disclosures

submitted through the AFT CEE.

If filed with the AFT CEE, the PD should be submitted with all

supporting documents electronically to the AFT CEE email address.

If payment is tendered, a check along with a hard copy of the PD

should be submitted to the AFT CEE through the Port of San

Francisco: AFT CEE

Port of San Francisco

Attn: Angela Guadamuz

555 Battery Street, Room 423

San Francisco, CA 94111

34

35

AFT Enforcement

Focus on areas of risk

Intellectual Property Rights

50% of all FY 13 IPR seizures (related to value and volume) were

handbag/wearing apparel/footwear related.

AFT CEE IPR Enforcement

36

Conducted Multiple IPR Operations with Hundreds of

Seizures with total MSRP value near $5 million.

Participated in several National/Local IPR

Operations

IPR Recordation

The AFT CEE recommends all registered Intellectual Property is recorded 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.

37

38

AFT Enforcement

Focus on areas of risk

Revenue

Duty collected by CBP on textile and apparel goods still accounts for

approximately 50% of all duties

The average duty rate for textile, apparel and footwear is 17% and

more than $17 billion of entered textiles and wearing apparel claim

preferential tariff treatment, placing textiles and apparel at a high risk

for non-compliance.

Misclassification and undervaluation are schemes to evade high duty

rates on textiles and footwear

39

AFT Enforcement

Focus on areas of risk

Trade Agreements

14% of imported value claims preferential treatment

False preferential claims undermine trade agreements

40

Textile Enforcement

Focus on areas of risk

Trade Agreements

There are 14 Free Trade Agreements. Australia (AFTA); Bahrain

(BFTA); Chile (CFTA); Central America – Dominican Republic Free

Trade Agreement (CAFTA); Israel (ILFTA); Jordan (JFTA); Morocco

(MFTA); North American Free Trade Agreement (NAFTA); Oman

(OFTA); Peru (PTPA); Singapore (SFTA); Korea (UKFTA): Colombia

(CTPA); Panama (PATPA)

There are also several Special Trade Programs with various

countries, they are as follows: African Growth and Opportunity Act

(AGOA); Caribbean Basin Trade Partnership Act (CBTPA); Caribbean

Basin Economic Recovery Act (CBERA) and Generalized System of

Preferences (GSP). Currently, GSP is expired.

CBP utilizes Textile Production Verification teams (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.

The TPVT visits help deter circumvention of the preference program

requirements, as well as educate foreign governments and

manufacturers.

41

On-Site Verification

42

Center and Industry Partners work collectively to define low-risk suppliers and

sharing trade intelligence to better define and segment high-risk suppliers.

The Center’s national approach is assisted through leveraging the Commercial Targeting and Analysis Center (CTAC) in Washington, DC.

• Established in 2009, CTAC serves as CBP’s multi-agency fusion center for targeting commercial shipments which pose a threat to health and safety.

• Nine (9) Federal agencies co-located : CPSC, EPA, DOT, DHS, USDA, FDA.

Effective Enforcement Targeting

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 forwarded to the CEE.

43

COMPLIANCE

&

VALIDATION

(coming soon)

44

Way Forward

Expand number of Participating Accounts

Continue focus on:

Streamlining entry summary and post entry summary processing

Expediting cargo release

Reducing paperwork

Expand bi-directional training

CBP training for the AFT industry on key issues

AFT industry training for CBP

* Electronics, Pharmaceuticals & Petroleum *

* Nationwide Import Specialist Realignment *

45

46

Center Myths- Participation

I’m not C-TPAT or ISA, the Centers aren’t for me.

Under the Center test notice issued in the Federal Register,

preference will be given to C-TPAT/ISA accounts, but it is not

required to be managed by a Center.

I’m not filing in ACE, I can’t be part of the Centers.

Participants and filers can transmit the necessary

documentation electronically via the ACE portal, the

Document Image System (DIS), but also via email to the

Center.

47

Center Myths- FRN I’m automatically going to be part of the Center’s

managed accounts.

You must volunteer! There is a test notice in the Federal

Register seeking importers to volunteer for the Centers. The

FRN details the processes and procedures for volunteering to

participate in the Centers. To receive centralized processing

benefits from the Center, you must volunteer.

Even for importers that don’t volunteer the Centers will be

available to assist them, and all members of the trade

community. The Centers will address an entire industry, and

be a source of definitive information for questions or concerns

related to that industry. In this way, the Centers are available

to all importers.

48

Center Myths- Operations

I’m going to have to change where I import because of

the Centers.

No. The Centers are virtual. CBP will leverage technology to

bring the work to the Centers, regardless of where the entry of

merchandise occurs.

I import products in multiple industries, I’m going to have

to apply to every Center.

No. The Centers are "industry-focused, and account-based."

Importers will have the opportunity to volunteer for the Center

that best fits their business. The assigned Center will be the

primary point of processing for all entry summaries,

regardless of the commodity that is entered.

49

Center Myths- Sequestration

Budget issues/Government shutdowns will impact CBP’s

Centers

The Centers are revenue neutral. This means that the

implementation of the Centers is based on the realignment of

existing resources into a new Center-based organizational

structure.

CBP is committed to the Centers as the future of trade

processing.

50

What Now?

Apply to be part of the Centers of Excellence & Expertise under the current Federal Register Notice

Contact:

Dora Murphy, Apparel, Footwear and Textiles Center Director

San Francisco Field Office

U.S. Customs and Border Protection

Dora.Murphy@cbp.dhs.gov

(415) 744-1530 x 233