Frances P. Hadfield
Summary adapted from Chapter 11 of "Fashion Law: A Guide for Designers, Fashion Executives and Attorneys" edited by Guillermo C. Jimenez and Barbara Kolsun (Fairchild Books, 2010).
American fashion brands frequently have their products manufactured abroad. When apparel arrives at the US border, the fashion companies must provide formalized documentation to Customs about the imported merchandise. Since under American law the importation of goods into American territory is considered a privilege and not a right, the government places a high level of responsibility on importers. There are a number of regulations and formalities that fashion companies should carefully observe when they intend to receive shipments of apparel manufactured in foreign countries.
Chapter 11 provides a general overview of these formalities and gathers practical information on how to prevent fashion companies from having any difficulties in getting their merchandise into retail stores.
The reliability of the source of the merchandise is a core issue when dealing with imported merchandise. Fashion companies may be held responsible for custom-related problems which were caused by their suppliers. Therefore, they must be careful when evaluating exporters. Upon "entry," which is the customs term for the process of providing information to the government about imported goods, companies must provide documentation regarding related duties, taxes and the classification of imported goods. Presenting a valid certificate of the country of origin of the merchandise is one of the most important issues in the entry process. The country of origin of the merchandise can determine the admissibility of certain merchandise and the eligibility of the merchandise for special tariff benefits or the application of the proper duty rate.
According to Customs and Federal Trade Commission (FTC) regulations, the country of origin must also be stated in a label attached to the imported wearing apparel. For example, FTC requires that in a shirt, the country of origin must be disclosed in the front of the label and be attached to the inside center of the neck. The fiber content, manufacturer or seller may also appear on the same label or any other readily accessible labels sewn on the garment. Fashion companies must be very careful with such regulations, as failure to comply with these norms is considered an unfair methid of competition and an unfair and deceptive act or practice.
Customs and Intellectual Property rights are intimately related. If an apparel importer enters goods or packaging bearing a trademark registration in the US the importer must be able to establish that it is genuine and not restricted from importation. If Customs detects imported apparel articles bearing counterfeit trademarks, the merchandize will be subject to seizure and forfeiture by Customs. Chapter 11 explains how a very important part of anti-counterfeiting strategies takes place in the borders of US territory when Customs enforces IP rights through the seizure of counterfeit products.
Frances P. Hadfield
Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP
New York, New York
Summary by: Margarita Serrano