Customs Chief Has No Immediate Plans to Change Import Duties
By KRISTI ELLIS
June 25, 2008
WASHINGTON — U.S. Customs and Border Protection Commissioner W. Ralph Basham gave his assurances to a Senate committee on Tuesday that his agency would delay until 2011 a decision on its controversial proposed rule change that would raise duties on imports.
“We are not going forward with any further action to implement this interpretative rule or otherwise change the interpretation of the ‘First Sale’ rule before 2011,” Basham told members of the Senate Finance Committee at a trade oversight hearing.
Customs proposed a rule change last year on how it values imports for the purpose of collecting duties, which drew the ire of both the business community and Congress.
The agency said it was considering changing its long-standing practice of determining the value of an imported finished product on the cost of the item at the point of first sale in the supply chain -- factory to wholesaler -- to the higher value of a product at final import, basically the wholesale price.
The proposed rule would have forced U.S. importers to pay millions of dollars in additional duties on the products they make abroad and ship back to the U.S.
Several apparel brands and retailers that shipped $96.1 billion worth of apparel and textiles to the U.S. in 2007 wrote a letter to Homeland Security Secretary Michael Chertoff in February urging him to withdraw the proposal. Customs is an agency within the Homeland Security Department.
But before Customs made a final determination, Congress stepped in and passed a provision in the farm bill that directed the agency to conduct impact studies in conjunction with the U.S. International Trade Commission and forego any action until January 2011 at the earliest.
Basham said he would follow the instructions of Congress as laid out in the farm bill.
“We’re very pleased with his comments today,” said Julia Hughes, senior vice-president of the U.S. Association of Importers of Textiles and Apparel. “I wish he would have gone further [pledging that the proposed change would never be resurrected] but I still think he gave the right answer.”
It is unclear how a new administration, which takes office next January, will approach the current Customs policy on valuing imports for duties. |