February 23, 2001
The Honorable Phil Gramm
United States Senate
370 Senate Russell Office Building
Washington, DC 20510-4302
Dear Senator Gramm:
On behalf of the Joint Industry Group (JIG) I am writing to you regarding your
efforts to include civil penalties for defacing or removing markings contained
in Section 301 of the Drug Free Borders Act of 2001 (S. 92).
The Joint Industry Group is a coalition of 150 Fortune 500 companies, shippers,
ocean carriers, brokers, freight forwarders, and attorneys working to improve
the flow of trade between the US and its trade partners. We regularly work with
the U.S. Congress and the U.S. Customs Service on a variety of import and export
facilitation and promotion efforts.
The proposed language in Section 301 indicates that ANY removal, alteration,
or destruction of origin markings is subject to a civil penalty not exceeding
$10,000 per violation. This provision will adversely affect many U.S. industries,
including retailers and manufacturers.
JIG and its membership strongly opposes this provision on the following grounds:
1. Current law sufficiently penalizes anyone who destroys origin markings with
the express intent to do so. The Tariff Act of 1930 provides a penalty of one-year
imprisonment or a fine of $100,000 for the first violation and one year imprisonment
and a fine of $250,000 for repeated violations. To the extent that merchandise
is mismarked at the time of importation, Customs has sufficient jurisdiction
to penalize these infringements under Section 1592. Customs does indeed enforce
this law and has imposed stiff fines on importers for mismarking occurrences.
The existence of such penalties demonstrates that additional statutes are unnecessary.
2. The proposed language treats all violations, whether an honest mistake or
an intended action, as equal. The type of low-level violation that this legislation
would effect happens frequently with no intent to violate the law or conceal
relevant information. Accordingly, passing a law against this type of action
makes innocent mistakes illicit in nature.
3. The proposal has no provision exempting those manufacturers, such as automobile
manufacturers, who remove or deface markings of imported components due to substantial
transformation. The proposal might have unintended consequences for the repackaging
industry. Many legitimate businesses repackage several products into one package,
a process that covers the markings on the original package. There is no federal
agency that has the personnel to implement or police such a law. Customs Service
inspectors already are overburdened with enforcement and trade processing responsibilities.
Adding this requirement further impinges on the Customs Service's ability to
perform its enforcement and trade facilitation duties.
4. This legislative proposal has not been subject to a public comment hearing
or discussions with the private sector or the government to assess its potential
impact.
JIG believes that the language modifying civil penalties for marking violations
is unnecessary. The U.S. Customs Service and the Federal Trade Commission already
have more than adequate means for handling marking issues. Any such marking
violations should be reported to the appropriate agency to handle. This provision
would have far reaching consequences that might not have been intended.
JIG strongly encourages you to abandon your efforts to move this provision forward.
If you have any questions, please feel free to contact Alan Atkinson or myself.
Thank you for your consideration.
Sincerely,
Jonathan Gold
Legislative Committee Chair
Joint Industry Group
Cc: Senate Finance Committee Members
Material Copyright © 2001 Joint Industry Group