NCBFAA Opposes Proposed Importer Declaration for U.S. Registered Agent Bill
On July 14, 2010, the National Customs Brokers and Forwarders Association sent a second letter to the Chairman and Ranking Member of the House Ways and Means Committee regarding its concerns with H.R. 4678, the Foreign Manufacturer Legal Accountability Act, which would require foreign manufacturers or producers of covered products1 to register an agent in the U.S. to accept service of process on their behalf, for state or federal regulatory proceedings and civil actions.
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Importer Declaration under Consideration Should be Opposed
NCBFAA states that it understands that there is revised language under discussion to amend H.R. 4678 to require an importer declaration. The declaration would attest to the importer’s belief, after appropriate inquiry, that the foreign manufacturer or producer of the covered product has a registered agent in the U.S. NCBFAA states that:
Reveals poor understanding of supply chain. The proposal to require that an importer declare that their foreign manufacturer has a registered agent in the U.S reveals a poor understanding of existing supply chains and should be rejected.
Identifying actual manufacturer can be difficult. NCBFAA has concerns about data access as well as penalties. The proposed requirement assumes that the importer knows the identity of the manufacturer. NCBFAA notes that while the supplier may be known to the importer, the actual manufacturers may be multiple parties (depending on shipment complexity) removed from the importer, thus making identification extremely difficult, if not impossible.
Major hardship for smaller importers. Because this data element -- the identity of the actual foreign manufacturer -- is seldom readily available, or even known in many instances, the requirement to provide it would work a major hardship on import process participants, especially small and medium-sized companies who do not necessarily have sufficient leverage with the supplier to demand this information.
Without being able to identify the manufacturer or know if there is an agent, the importer has to choose between filing what may be an erroneous declaration and filing no declaration at all. Either way, the importer is subject to penalties leaving him to incur the penalty or send the product back.
U.S. exporters likely to face similar requirements. The legislation also fails to consider the inadvertent, but highly detrimental, impact on U.S. exporters, who very likely will face similar requirements from US trading partners. The legislation has the very real potential to harm US businesses and consumers in ways that are not completely understood. It would hamper the trade process -- both imports and exports -- at a time when we need to do just the opposite.
1Covered products are listed as drugs, devices, and cosmetics; biological products; consumer products; chemical substances or new chemical substances; and pesticides.
(H.R. 4678 was approved by a subcommittee of the House Energy and Commerce Committee on June 30, 2010. NCBFAA’s first letter included a request that the House Ways and Means Committee, which typically handles trade issues, also be given an opportunity to review the measure. (See ITT’s Online Archives or 06/25/10 news, 10062541, for BP summary of NCBFAA’s first letter to Ways and Means leaders.
See ITT’s Online Archives or 07/01/10 news, 10070132, for BP summary stating that a House Energy and Commerce Subcommittee had amended and approved the measure. See ITT’s Online Archives or 03/25/10, 10032515, for BP summary of H.R. 4678 as introduced.)
Copy of bill as approved by the subcommittee available here.