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Section 19, amendment of entries: We believe every importer should have the right to amend his customs entry when he has obtained additional factual information not available to him at the time he made his original entry, relating to the correct value of the imported goods. Inasmuch as a customs entry amounts to a formal declaration by the importer as to the facts characterizing the particular importation, an importer has a substantive right to amend his entry with a formality equivalent to that surrounding his original entry. Section 19 of this bill would eliminate the importer's right to amend.
The Treasury Department properly emphasizes that there would be little occasion for the amendment of an entry by an importer when other provisions of the bill are taken into consideration, namely, the elimination of undervaluation duties and the utilization of the final appraised value rather than the entered value. While there is merit to this argument, it admits tacitly that an importer might, on rare occasions, have good reason to make a formal amendment of his entry, and, therefore, we believe that his right to do so should be retained.
In closing, we would like to reiterate that there is great need at this time for legislation effecting the simplification of customs procedures, and we urge this committee to report H. R. 5106 favorably, even if it is impossible to make the two changes in the bill which we have just recommended, so that appropriate action can be taken by the House and Senate as soon as possible.
Mr. JENKINS. You made a very fine statement and we appreciate your coming. If you should want to expand on your statement on some of the features you discussed, you have permission to do that. Mr. BRUNO. Mr. Chairman, I do not know whether I would want to expand.
Mr. JENKINS. Mr. Curtis of Nebraska will inquire.
Mr. CURTIS of Nebraska. Just what is a consular invoice? Mr. BRUNO. The Tariff Act requires that an invoice cover every importation into the United States, and it refers to that invoice actually as a certified invoice. The act specifies what information should be on that document. We call it, and it is commonly called, a consular invoice. It is required, according to present law and regulations, on all ad valorem merchandise.
Mr. CURTIS of Nebraska. It has nothing to do with consulates?
Mr. BRUNO. It does in the sense that it is the invoice which must be presented by the foreign exporter to the American consul abroad in the country of exportation. So if the shipment is coming from England, the British shipper has to present this document, Form 138, to the American consular officer in that particular area in England, and have it certified, and one copy is sent to the collector at the port of entry, the original is returned to the foreign shipper, and the consul keeps one for his own records.
Basically it is the delay and the inconvenience involved in having that document brought to the American consul's office, and having it certified that we object to.
Mr. CURTIS of Nebraska. You would do away with all of that? Mr. BRUNO. Yes, sir.
Mr. CURTIS of Nebraska. They would not take the invoice to the consul's office?
Mr. BRUNO. That is correct. As a matter of fact we would recommend the complete elimination of the invoice. We would say that any information that is now on the invoice could very easily be put on the commercial invoice.
Mr. CURTIS of Nebraska. How many clerks does it take in the American consul's office who handle that work?
Mr. BRUNO. It is difficult to say how many, but of course someone over there must handle the paperwork. At the same time the customs personnel in the United States must handle those documents.
Mr. CURTIS of Nebraska. Would that volume amount to anything in the way of a payroll?
Mr. BRUNO. În New York, and this ties in with an analogous problem, if I may just for a moment explain this, the requirement is that a consular invoice be produced at the time of making entry for the ad valorem merchandise. If the invoice is not available, the importer must put up a bond promising to produce that invoice within 6 months' time. That is additional expense for the importer. By the same token, the Government must keep a record of that bond, must follow up for timely compliance with it. As I started to say, in New York there is what is called a missing-documents desk where one clerk is required on full time, as a matter of fact, to handle just such bonds and additional documents which were not available at the time of importation. Mr. CURTIS of Nebraska. Just on the bonds?
Mr. BRUNO. Not exclusively on the bonds, but it is all part of that problem.
Mr. CURTIS of Nebraska. It is your contention that the whole. procedure does not contribute anything to protect the public or the Government?
Mr. BRUNO. We can see no value whatever to that document. Mr. JENKINS. Any other questions? If not, we thank you for your appearance.
Mr. BRUNO. Thank you.
Mr. JENKINS. The next gentleman is Mr. Benjamin M. Altschuler. Is Mr. Altschuler here? He is the counsel for the Customs Brokers and Forwarders Association of America, New York City.
STATEMENT OF P. IRVING GRINBERG, EXECUTIVE VICE CHAIRMAN, JEWELERS VIGILANCE COMMITTEE, INC., NEW YORK, N. Y.
Mr. GRINBERG. My name is P. Irving Grinberg. For upwards of 25 years prior to 1942 I was engaged in my own business as an importer of pearls and precious stones. At that time I closed my business and came to Washington to do my bit during the war, when I served with the War Production Board. But I did have considerable experience in connection with the importation of goods during my business career. I am presently executive vice chairman of the Jewelers Vigilance Committee with offices at 45 West 45th Street, New York, N. Y. The Jewelers Vigilance Committee is representative of the entire jewelry industry, including manufacturers, importers, wholesalers and retailers throughout the country, who produce and deal in all types of jewelry and their component parts, watches, silverware, and so forth.
At the outset, it should be stated that our industry is wholeheartedly in favor of any measures which will simplify customs procedures and also of any steps affecting all Government departments which would result in true economy. The memorandum before you, however, indicates that it is questionable whether or not any appreciable net savings would result by raising the value of duty-free mail packages from the present $1 level.
It should also be stated that no request is being made to place barriers on importations, but rather that the present competitive position of American importers, manufacturers, merchants, and labor on items under $3, be retained. It is respectfully suggested that all of the results which would accrue were the level of duty-free mail shipments to be increased to $3 should be considered--not only the savings in the administration of the Customs department.
Quoting from a letter received from Mr. D. B. Strubinger, Acting Commissioner of Customs, dated March 18, 1952:
The last estimate of the cost of processing of a mail importation was $1.59 per mail transaction.
Does this mean all mail imports, regardless of value since none is stated? Mr. Strubinger indicated that this estimate was made approximately 4 years ago and that the cost today is undoubtedly higher. Mr. JENKINS. Will you yield for a moment? What position do you take with reference to the $3.
Mr. GRINBERG. We are opposed to any change in the present level of $1.
Mr. JENKINS. You want it to stay at $1.
Mr. GRINBERG. We want to see it retained as it is at $1.
Mr. JENKINS. Your argument is that if it was $3 the cost of bringing it in was not more than $1.59, and the importer would have the advantage of between $1.59 and $3?
Mr. GRINBERG. That is right.
While it may well be expected that on mail shipments up to $3 the amount of duty would be less than the approximately $1.59 cost of clearance. It might well be that in many cases the loss of duty and other losses in revenue would exceed this cost. From the report on hearings before your committee on H. R. 5505 before the 82d Congress, customs duties were the only revenues considered by the Treasury Department in presenting the case for raising the level of duty free mail shipments. It might also be appropriate at this time to call your attention to the possible effect on employment in our industry. Among them, soft goods and costume jewelry would undoubtedly be lowered if the value of duty-free mail shipments were to be raised. May we respectfully request that all of these results be considered, in addition to statements by the Treasury Department.
I also understood from Mr. Rose's statement yesterday the change from $1 to $3 in section 321 was to take care of "sporadic and spot transactions."
It is interesting to note that after the passage of H. R. 5505 by the House of the 82d Congress, a number of advertisements appeared in American publications offering foreign merchandise under $10 and in addition catalogs of foreign mail-order houses were also received in this country offering foreign merchandise under $10.
Among them was a full page advertisement of Richard Shops, 180 Regent Street, London, England, in the February 24, 1952,
issue of the magazine section of the Sunday New York Times. The cost of one insertion was $3,370. This ad of an English firm offered straight skirts for $7.95, indicated approximate duty $2.50; flared skirts, for $8.95, indicated duty about $2.75; and matching stole capes for $4.95, indicated approximate duty $2.50. In connection with this advertisement, your attention is called to a question asked by Congressman John W. Byrnes at the House Ways and Means Committee hearing, page 122 of the report:
Mr. BYRNES. Is that going to lead to mail-order business on items that run under $10?
Mr. Phillip Nichols, Jr., Assistant General Counsel of the Treasury Department, replied:
Mr. NICHOLS. That is a question I am glad you asked. It is one that I have given a good deal of thought to and mind searching to. If the maximum ceiling of $10 is permitted, we believe that there might be a mail-order business that will spring up in some items. There are items that are dutiable at a fairly high rate that are produced in Europe that are in demand by our citizens here, such as woolens, and it might be profitable to set up a business along those lines.
The above-mentioned advertisement indicates that soon after the bill was passed by the House, we were faced with this very woolen situation. Note that the bill provided a raise to $10 in duty-free mail packages, and that the advertisement in question covered items from $4.95 to $8.95 with duties running from $2.50 to $2.75 per garment. From this example, it would seem reasonably certain were the duty-free level to be raised from $3 (foreign value) that such firms as the Richards Shops would immediately produce a line of merchandise which could be offered at $3 foreign value, such as scarves, blouses, skirts, etc.
The second illustration presented last year before the Senate Finance Committee was an advertisement which appeared in the magazine section of the New York Times, Sunday, March 16, 1952, and again on April 6. Cherub (Mail Order), Ltd., 35 Hillside, London, England, offered a doll called the Royal Princess for $7 plus, as stated, "you pay the postman around $3.15 duty." A single insertion cost $385. Here it would appear, were the value to be raised to $3, this concern and other firms would offer dolls, toys, etc. at a $3 figure (foreign value).
Another illustration which was presented was a copy of one-half of the cover page of the spring 1952 catalog of Joyce Wells, Ltd., 6a Mount Street, London, England, which had just been received by a consumer-purchaser in New York, and undoubtedly sent to many others in this country. This catalog contained 12 pages (8% by 11% inches) and all but 7 of the items (6 clothing) were priced under $10 each.
Below the cover page there was a copy of an order slip accompanying the catalog which depicted 2 pieces of plated silverware, 1 piece offered for $8.59, indicated duty $2.04, and the other for $5.28, indicated duty $1.21. There are many items of silver, both sterling and plated, flat and hollowware, which could be imported for $3 foreign value. Were these pieces to be sold in the United States, 20-percent excise tax would be collected on many of them, in addition to the duty. It may be presumed that considerable expense was involved in the printing and mailing of these catalogs. Were the value to be raised
to $3, it could be expected that new catalogs would be prepared offering items up to this foreign value.
The fourth exhibit presented last year illustrated how displays of merchandise priced at less than $10 could be made in the United States by foreign firms through traveling salesmen and by other means, and orders taken for shipment from abroad. The ad, a full page presentation, was inserted by Stanley Home Products, Inc., of Westfield, Mass., and Stanley Home Products of Canada, Ltd., of London, Ontario, and appeared in Life Magazine, American Edition, January 28, 1952, issue; cost $28,900 per single insertion. This ad stated that
Stanley leads with more than 150 quality plus products featured exclusively at Stanley hostess parties such as the one pictured on this page: Waxes, polishes, cleaning chemicals, brushes, dusters, mops, brooms, etc., toilette articles, cosmetics, bath accessories, many other aids to improve personal grooming.
All of the items illustrated were of a value of $3 or less. The advertisement was sponsored by both Stanley Home Products of Westfield, Mass., and Stanley Home Products of Canada, Ltd.
We do not know how many products were made here or how many in Canada. There was no designation.
Some American mail order and retail firms have offices abroad and presently import many items in bulk. The thought comes to mind that if the value of duty-free mail shipments were raised, these concerns could readily ship items to their customers direct from abroad duty and tax free.
Here is a copy of the back cover of the May 2, 1953, issue of the Saturday Review. The advertisement is entitled "Around the World Shoppers Club" and "sends gifts like these from foreign lands for only $2 each, post paid duty free." It illustrates three "gifts". 1. Six silver plated English pastry forks.
2. A "Delft's Blue" ceramics lamp and shade from Holland.
3. A dainty perfume flacon of etched metal and gleaming glass from Paris.
This certainly is an example of a mail order business with items under a $3 foreign value and is indicative of a potential in mail order shipments which could reach serious proportions. The advertisement in question cost $1,030 for a single insertion and the volume of business necessary in order to make the venture a profitable one is readily calculable.
You may remember that Mr. Jones yesterday showed you a full page ad taken from the Detroit Free Press of the same concern offering these same items. That ad cost $2,304.
Some of the effects of the tremendous potential growth in this type of business must have been recognized when section 321 of H. R. 5106 was being discussed, since under paragraph (c) of that section the Secretary of the Treasury was given the following power:
(c) The purpose of this section is to avoid expense and inconvenience to the Government disproportionate to the amount of revenue that would otherwise be collected. Therefore, the Secretary of the Treasury is authorized by regulations to diminish any dollar amount specified heretofore in this section and to prescribe exceptions to any exemptions provided for in this section whenever he finds that such diminutions or exceptions are consistent with the purpose above stated, or are for any reason necessary to protect the revenue or to prevent unlawful importations.