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Section 19, amendment of entries: This association is fully in favor of the amendment of section 489 of the Tariff Act to eliminate penalty duties for undervaluation. This inequitable and needless provision in the law has been a club over the heads of importers for many years and we are pleased to observe that the elimination of section 489 duties, which our association recommended several years ago, will be achieved by means of the present bill.

Section 19 of the bill also amends section 503 of the Tariff Act by eliminating that feature of the present law which establishes a headsyou-win, tails-I-lose condition under which importers have had to operate. The proposed amendment in H. R. 5106 would eliminate the use by the appraiser of the higher of the entered value or final appraised value, and would require, as is only reasonable, that imported merchandise be assessed duty on the basis of its final appraised value.

Two sections in this bill, in our opinion, might well be modified without extensive debate or delay.

Section 17, certified invoices: Under section 484 of the Tariff Act, no merchandise may be imported without the production of a certified invoice, commonly called a consular invoice, except as provided in that section. The Secretary of the Treasury, however, is authorized to make such additional exemptions from that requirement as he deems advisable, and he has taken such action on a number of occasions in the past.

Under this bill, section 484 is amended to provide that the Secretary of the Treasury shall designate the merchandise with respect to which a consular invoice must be produced and the conditions under which such merchandise may be permitted entry without the production of a consular invoice.

In a letter to the Secretary of the Treasury, dated March 12, 1953, a copy of which we would like to have included in the record of these hearings, this association proposed that the customs simplification bill contain a provision eliminating the consular invoice entirely. It is our contention that the consular invoice does not serve any worthwhile purpose to justify its continued use, and that its elimination would result in a saving of time and money to both the Government and the importer.

Mr. JENKINS. Without objection, that may be inserted in the record at this point.

(The letter is as follows:)


Secretary of the Treasury,

United States Treasury Department,

New York 7, N. Y., March 12, 1953.

Washington 25, D. C.

MY DEAR MR. SECRETARY: This association is the recognized service chamber of commerce for the New York metropolitan area and numbers within its membership some 1,000 firms engaged in the importation of foreign goods for distribution and sale throughout the United States.

Over a period of years many import firms have brought to our attention the serious, and we believe unnecessary, hardships caused by the requirement that consular invoices covering their importations from abroad be certified by the American consular officer in the foreign country, pursuant to section 482 of the Tariff Act of 1930. We would like to describe in some detail the conditions behind such complaints, and urge, in the light of these facts, appropriate action to eliminate in its entirety the consular invoice, Foreign Service Form 138, as

well as its certification by the American consul. We believe that this desirable change should be incorporated as part of the customs simplification bill soon to be placed before Congress.

The essence of the consular invoice

The consular invoice contains the same details of the particular transaction which are, or can readily be, shown in the customary commercial invoice of the seller to the buyer, and incorporating, in addition, the signature and seal of the American consul abroad. This consular certification evidences that the $2.50 fee has been paid and that the shipper or seller signing the document is the person he represents himself to be.

Consular invoice only duplicate of commercial invoice

The seller's commercial invoice is the essential document containing details of the particular transaction. In most cases the consular invoice is merely a duplication of the commercial invoice, or an attachment to the commercial invoice. The importance attached to the consular invoice by customs officials is shown by the existence of the "no consul" list, including scores of foreign ports of exportation at which no American consular officer is located and from which merchandise may be imported into the United States without a consular invoice.

Even more illustrative in section 484 (b) of the Tariff Act which grants discretion to the Secretary of the Treasury to allow entry of goods where a consular invoice cannot be presented by the importer at time of entry. Customs regulations in such circumstances allow the importer to make entry upon the execution of a bond to produce the missing document within 6 months' time. Then, recognizing the possibility of conditions precluding compliance with this obligation, the regulations further permit the cancellation of that bond by the payment of $10 if the importer is unable to produce the consular invoice within the prescribed time. The fact that the Treasury Department accepts that small amount as liquidated damages demonstrates the value which the Government itself places on the consular invoice.

As for the necessity of a consular invoice in appraising the value of imported goods, the usual procedure, whenever a question of dutiable value remains unresolved in the mind of the customs examiner, is to request an investigation in the foreign market to permit an independent determination of the true facts, without regard for information disclosed by the consular invoice.

Cost to Government and importers

Considerable expense is caused the Government by the consular invoice requirement. Obviously, thousands of consular invoices must be processed annually by American consuls abroad; copies must be mailed to the various collectors of customs at the ports of entry in this country; filing, comparison checking, and then consolidation with the original consular invoice, submitted by the importer at time of entry, must be accomplished. In addition, in view of the provisions made for presentation of the consular invoice within 6 months of entry under the missing document bond procedure, such bonds must be handled, filed, and followed up for timely compliance by the importer. At New York, this situation has reached such proportions as to require the establishment of a missing documents desk, with a customs clerk assigned full time to handling such bonds and subsequently filed consular invoices.

Delays caused by the consular invoice


The consular invoice was initiated many years ago when import volume was much smaller, transportation slower, and the time element of less importance. Nowadays, when freight is shipped by fast steamer, merchandise frequently reaches port before the consular invoice has been received by the importer. situation is even more acute for airfreight shipments, where the foreign exporter dispatches the shipment 1 or 2 days before he can obtain the consular invoice certification. Thus, the importer must forego the advantages of prompt shipment by air and withhold making entry until the consular invoice is received or accept the added expense and inconvenience of the alternative bond procedure. Other studies recommending elimination

Numerous organizations and individuals, in both Government and private trade, have urged the elimination of the consular invoice. One persuasive argument was presented several years ago when McKinsey & Co. was commissioned by Congress to study the Bureau of Customs and the operations of customs personnel to eliminate duplication of work, improve the efficiency of administration, and reduce expenditures. During the course of that study, representatives of this

association participated in discussions on various phases of the problems and it is our understanding, although the report never was made public, that one of the final recommendations made in that study was for the complete élimination of the consular invoice. The workload created for the Government by the consular invoice is entirely disproportionate to its dubious value in the administration of customs laws, and it is clearly burdensome and unnecessary. The reasoning behind such recommended elimination of that document is even more cogent and convincing nowadays, in the light of the new administration's pledge to minimize governmental expenses and direct every effort toward the simplification of administrative procedures.

Effects on export trade

The consular-invoice requirement is merely another irritating burden on international trade. As often occurs in such circumstances, this requirement has ramifications in other fields which often are not fully appreciated. In fact, our country's export trade is adversely affected by this documentary requirement.

Over a period of years this association has urged various foreign governments to eliminate consular-invoice requirements. Our exporters have constantly complained of the added cost and workload created by the required preparation and legalization of foreign consular invoices covering shipments abroad, and this association has been instrumental in inducing at least two countries to abolish this document and, to that extent, simplify their documentary requirements.

A number of Latin-American countries, including Chile, Costa Rica, Mexico, and El Salvador, have modified their regulations to eliminate consular invoices which the other countries in that area still require. This program, however, has had only limited success, inasmuch as the all-too-frequent reaction expressed by foreign governments called upon to effect such relaxation of their requirements has been to point directly to the United States customs regulations and the burdens caused their exporters by our consular-invoice requirement.

The fact is that the ultimate success of such efforts in behalf of American exporters is basically dependent upon what action this country takes in respect of its own consular invoice. The State Department, in commenting on our proposals for the elimination of foreign consular invoices, stated that, "The probability of obtaining favorable consideration of this proposal by foreign governments would be considerably increased *** if the United States were prepared to take parallel action."


The United States has endorsed a policy of reducing customs formalities and hampering barriers to the free flow of international commerce. This is evident in our support of a proposal to that effect approved during the Seventh Session of the General Agreement on Tariffs and Trade signatories in October 1952. As a practical matter, however, our government's participation towards this objective has stalled, thus blocking the hope of reciprocal action by foreign governments. We believe that the United States consular invoice is a greater handicap than is apparent on the surface. This document, which is not essential to the Government or the importer, is just another annoying barrier to the sound development of trade in line with current enlightened thinking. Elimination of the United States consular invoice requirement will be interpreted by all, and with just cause, as indicative of the sincerity of our pledges to cooperate towards increased world trade.

We recognize that the Treasury Department has done much by regulation to reduce the number of situations where a consular invoice is required, but this is not enough. The only solution to the problem rests in a change in the customs laws, and the time has never been more appropriate for such change, which should be incorporated in the customs simplification bill now being drafted by your Department.

Assuring you of our desire to cooperate with your office, if we can be of assistance in this connection, we wish to remain

Very truly yours,


Mr. BRUNO. The amendment proposed in the present bill is constructive insofar as it tends to liberalize the consular invoice requirements. However, we believe that the complete elimination of this document would be much more effective in producing a simplification of customs procedures and, at the same time, would be an effective example for other countries to follow.

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. In 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.

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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.

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