Under U.S. customs law, the U.S importer of record (i.e., the owner or purchaser of the goods) is the entity which has the legal responsibility to ensure that the goods are entered with “reasonable care” and in compliance with all federal laws. See, 19 U.S.C. § 1484(a). Only entities who can demonstrate their right to make entry, that is show that they have a financial interest in the goods as an owner, purchaser (or in some cases, a license customs broker on behalf of an importer) have the right to make entry.

As the owner of the merchandise, the U.S. importer is the entity over whom the United States exercises legal jurisdiction since generally enforcement actions by federal agencies relating to the imported goods are by their nature in rem actions
(i.e., actions against the goods). Moreover, implementation of H.R. 4678 would require CBP to develop another complex layer of regulations to determine who the actual manufacturer is for purposes of appointing a registered agent. We believe that such determinations may be difficult to make depending on the particular manufacturing process (e.g., mixtures and compounds) or the variety of commercial relationships (e.g., third-party contract manufacturing).

Read the entire testimony from the American Association of Exporters and Importers at the June 16, 2010 hearing of the Energy and Commerce Subcommittee here.





An amendment to H.R. 4678 is being considered by lawmakers that would require importers to submit a declaration attesting to their belief that the foreign manufacturer has complied with the registered agent requirement.

According to National Customs Brokers and Forwarders Association of America (NCBFAA) President Jeffrey Coppersmith, the importer declaration idea “reveals a poor understanding of existing supply chains” and should be rejected. The proposal “assumes that an import transaction is a transparent, linear process,” Coppersmith notes, when in fact it is “a complex, multi-layered network of trading companies and suppliers where products are sourced and consolidated from multiple countries and multiple manufacturers.” Importers know who their suppliers are, but the actual manufacturers may be multiple parties removed from the importer, thus making identification extremely difficult if not impossible.

In this situation, Coppersmith said, the proposed amendment would require importers, especially “small and medium-sized companies who do not necessarily have sufficient leverage with the supplier to demand this information,” to choose “between filing what may be an erroneous declaration and filing no declaration at
all.” In either case the importer would be subject to penalties, which it would have to pay or face the prospect of returning the goods. In contrast, the letter noted, U.S. Customs and Border Protection’s importer security filing (10+2) rule acknowledges the complexity of modern supply chains by allowing either the foreign manufacturer or the supplier to be identified.





The National Association of Manufacturers, Association of International Automobile Manufacturers and Organization for International Investment have issued a joint letter to the House Energy and Commerce Committee sharply opposing the legislation which it describes as “unfair, unnecessary and counterproductive” for the following reasons:

• H.R. 4678 will not enhance product safety. AAEI suggested that a risk-based account management system would better protect U.S. consumers.

• U.S. importers are currently responsible for regulatory and legal actions relating to imported goods.

• Federal law already requires registration for foreign manufacturers in many of these industries.

• The United States is already working with foreign governments to improve product safety.

• H.R. 4678 will have a negative impact on U.S. exporters who may face similar requirements in all the foreign markets to which the ship goods.

• Most importantly, H.R. 4678 will not provide relief for U.S. consumers since the United States is a signatory to the Hague Convention on Foreign Judgments in Civil and Commercial Matters which would enable injured parties to collect on a U.S. judgment for money damages.

The National Customs Brokers and Forwarders Association of America has also outlined its objection to the bill on the following grounds:

• Foreign manufacturers would not be accountable. H.R. 4678 would not realize the stated goal of holding foreign manufacturers accountable. NCBFAA states that serving court papers on "registered agents" is a false promise as most foreign courts would not enforce a U.S. court judgment against the foreign manufacturer.

• CBP, CPSC, FDA already have seizure, detention powers. H.R. 4678 overlooks the fact that U.S. Customs and Border Protection (CBP), the Consumer Product Safety Commission (CPSC), the Food and Drug Administration (FDA), among other agencies, already have broad powers to seize, detain, or refuse entry to defective or tainted products.

• U.S. exporters could be target of similar provisions. H.R. 4678 fails to consider the inadvertent, but highly detrimental, impact on U.S. companies when U.S. foreign trade partners reciprocate with their own "registered agent" provisions (as they are likely to do). It will be difficult and expensive for small and medium-sized companies to maintain registered agents in all the foreign markets to which they export. In addition, an even greater disincentive will be the exposure to litigation in countries whose legal systems may not have the same safeguards and transparency as the United States.