Legislation to Require Non-Resident Agents Gains Steam in House
Thirty-five House lawmakers are on board with a bill introduced recently that would force non-resident foreign manufacturers to register agents in the U.S. to cover import liability. Those lawmakers, which are mostly Democrats, now co-sponsor the Foreign Manufacturers Legal Accountability Act of 2015, HR-3304 (here). Rep. Matt Cartwright, D-Pa., introduced the legislation on July 29 (see 1507290049). The bill now sits with the House Commerce, Ways and Means and Agriculture committees for consideration.
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The bill directs the Food and Drug Administration, the Consumer Product Safety Commission and the Environmental Protection Agency to require foreign manufacturers register an agent within 180 days of enactment. The legislation doesn’t set guidelines for who or what is permitted to serve as agent, but firms and corporations are allowed. Thorough documentation is required from both the manufacturer and agent. The bill only requires the designation of any agent for foreign manufacturers that surpass certain thresholds on the quantity and value of goods imported into the U.S.
If the legislation becomes law, Commerce Department officials would be obligated to create a public registry of all designated agents. By registering an agent, the bill says manufacturers would consent to U.S. judicial jurisdiction. Those that fail to register an agent in the six-month time period will face an “appropriate penalty” under current U.S. trade law. The legislation also directs the Obama administration to conduct studies on how the new law would be best applied to agriculture and manufacturing industries.
The bill cites the large quantity of defective goods imported into the U.S. that have caused harm to U.S. consumers as the motivation for the legal changes. Victims of those defective goods often face severe challenges in seeking compensation from foreign manufactures, the legislation says. "In choosing to export products to the United States, a foreign manufacturer or producer subjects itself to the laws of the United States,” it says. “Such a foreign manufacturer or producer thereby acknowledges that it is subject to the personal jurisdiction of the State and Federal courts in at least one State.”
The legislation resembles language in the House version of Customs Reauthorization (here). That bill requires all non-resident importers to register agents, aside from those importers on Tier 2 and Tier 3 of the Customs-Trade Partnership Against Terrorism. The National Customs Brokers & Forwarders Association of America recently said that language will encourage importers to pressure brokers to serve as an agent (see 1506220022). Lawmakers plan to complete a legislative conference on Customs Reauthorization after returning to Capitol Hill in September (see 1507290041).