U.S. Customs says transshipment not a problem in NMI

The United States Customs Office of Investigations has disclosed that diversions or transshipments of goods is not a problem in the Northern Marianas, according to the most recent report on the CNMI prepared by the investigative arm of the U.S. Congress.

The General Accounting Office cited investigations by the U.S. Customs Service which yielded zero evidence on alleged transshipments of apparel products as claimed by the Department of the Interior’s Office of Insular Affairs.

Of the 16 joint investigations conducted by the CNMI and U.S. Customs Service since 1996, three cases involved narcotics smuggling while one was on a fugitive who fled the Northern Marianas with $10,000 in stolen money.

“U.S. Customs cited no cases involving transshipments or diversions of U.S.-protected goods,” GAO said in its report on the flow of aliens and goods into and out of the CNMI released last week.

The report also quoted an executive director within the U.S. Customs Office of Investigations who said that transshipments were unlikely to happen in the CNMI due to the inexpensive labor available on the islands.

GAO added the U.S. Customs official mentioned that diversions of goods involving the CNMI is not likely to happen citing the authorization to put “Made in USA” labels on garments manufactured here, and the fact that no quotas or duties are placed on CNMI-manufactured to the U.S.

Also, federal customs officials said a series of investigation jointly held by CNMI and U.S. Customs in September 1998 did not uncover any evidence of garment transshipments.

The investigation involved a thorough review of shipments of raw textile materials being imported into the CNMI by apparel factories to determine whether transshipment of finished products through the islands occur.

U.S. Customs investigations of CNMI garment manufacturing plants’ production capabilities have not uncovered any problems, according to the GAO report.

“The officials noted, however, that the investigation identified gaps in CNMI customs’ procedures that could allow possible transshipments to occur. For example, containers are only randomly reviewed on export, meaning that CNMI customs agents do not routinely physically verify quantities of garments exported,” the GAO said.

Still, the report said U.S. Customs officials have stressed that the possibility of finished garments arriving on, or being concealed within, inbound garment factory containers appeared low.

On the basis of garment factory investigation, the GAO report said CNMI Customs received a positive review from its federal counterpart, adding that local customs personnel “appeared to be well-respected by both management and labor at the garment factories.”

While a report from the CNMI Customs Division revealed a modest increase in the number of letters of reprimand issued to businesses in the Northern Marianas, it noted that very few sanctions have been levied against garment factories during the period covering 1998 and 1999.

GAO inquiries yielded results which disclosed most of the sanctions levied in 1998 and 1999 were for unreported goods and were issued against small stores or businesses.

Monetary fines slapped against those who violated CNMI customs regulations soared to $47,350 in 1999 from the previous year’s $20,025, with the number of fines correspondingly posting increase from 37 to 45.