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e-mail address : enquiry@tid.gov.hk

Ref. : S/F(7) to CR EIC 9800/5/4/2

19 February 2008

Dear Sirs,

Notice to Exporters : Series 1 (USA) No. 2/2008

Certificate of Origin Circular No. 3/2008

Hong Kong/US Joint Factory Observation Visit Programme

This Notice to Exporters cum Certificate of Origin Circular informs the trade of a coming round of Hong Kong/US joint factory observation visits to be conducted for a two-week period commencing 6 March 2008 and in connection with the visits, the special requirements related to lodgement of Production Notifications (PNs) before and during the period.

Background

2. As part of the ongoing co-operation between Hong Kong and the US in textiles trade matters, the two sides have agreed to a round of joint factory observation visits during the period from 6 to 20 March 2008. The purpose of the visits is to enhance the understanding of the US authorities of the textiles and clothing manufacturing operations in Hong Kong, and the effectiveness of Hong Kong's origin control system in ensuring that textiles and clothing exports claiming Hong Kong origin are genuinely manufactured in Hong Kong. This will be conducive to greater facilitation for legitimate textiles trade especially at a time when restrictive trade measures are still in place against certain textiles exports of the region.

Joint Factory Observation Visits

3. The mode of operation of the visits will be generally similar to that adopted for the Hong Kong/US joint factory observation visits in 2007. Basically, officers of the US Customs and Border Protection (US CBP) and the Customs and Excise Department (C&ED) will team up and visit factories that have arranged textiles and clothing products manufactured in and exported from Hong Kong to the US on the basis of the information indicated in the declarations in the textiles applications/notifications lodged with the Trade and Industry Department (TID), Certificates of Hong Kong Origin (CHKO) applied with TID or the Government Approved Certification Organisations¹ , or information maintained by the US CBP in relation to entry of the textiles shipments into the US.

4. In line with the past practice, officers of C&ED will, on behalf of the joint visit teams, seek the consent of the factories that they intend to visit before making their first visit. Only factories that have indicated consent will be visited (see also paragraph 6 below for indication of consent through lodgement of PNs). The factories giving consent to the joint visit are reminded to render all necessary co-operation to the joint visit teams, including having the responsible person (including the proprietor/one of the partners/one of the directors) or any other person authorized by the factories present at the factory premises for the conduct of the joint visit. In this connection, separate visits may also be made to the same factory during the period of joint visit mentioned above on the basis of the consent indicated in respect of a particular shipment of the subject factory or its individual textiles application/notification, including CHKO applications.

5. During these visits, the US visitors will be shown the machinery and workforce engaged in the production of the consignment(s) covered by the subject textiles related document(s). The visitors may want to raise questions and engage in discussions with factory management and workers on the manufacturing and export operations of the factory or on a particular shipment effected by the factory to the US which they wish to confirm. As the US visitors cannot undertake any enforcement work in Hong Kong, they will not engage in any investigation. Any enforcement work including the inspection of books and records will be performed by officers of C&ED separately after the joint visits.

Special Requirements for Lodgement of Production Notifications

6. In connection with the joint factory observation visits, with effect from 4 March 2008 and until 20 March 2008, manufacturers lodging PNs covering cut-and-sewn garments destined for the US market should indicate in the PNs whether they consent to the Hong Kong/US joint visit. Such a requirement is applicable to PNs lodged electronically or by using the services provided by the Tradelink Service Centres. In the absence of an indication, the PN will be deemed to be incomplete and will be deferred by the Department. Once the manufacturers have indicated consent in PNs, they are reminded that the joint visits may be made on any working day(s) during the two-week joint visit period based on the consent indicated on the PNs. Manufacturers should note that these special requirements do not apply to PNs covering shipments to the European Union market, piece-knitted garments and other products not covered by the PN arrangement.

7. The PN arrangement and the production check requirements are set out in Certificate of Origin Circulars No. 22/2003 dated 14 November 2003 and No. 14/2004 dated 30 November 2004. Traders may refer to these circulars for information. These circulars are available at the Department's web portal 
   (http://www.tid.gov.hk/english/aboutus/tradecircular/coc/coc_maincontent.html).

Important Notes

8. Selected companies are invited to provide the visitors with all necessary co operation. Companies not giving consent to the joint visits may be subject to separate checks by officers of C&ED.

9. In case a factory is selected for a joint visit, the processing of its textiles applications including export licences, PNs and CHKOs may take a longer time than those stipulated in the Performance Pledge. Traders are advised to bear this in mind in arranging shipment schedules for their consignments.

Enquiries

10. If you have any enquiries on the above, please contact the Customer Service Centre of the Origin Certification and Textiles Licensing Branch at 2398 5288.

Yours faithfully,

(Leonard LAM)
for Director-General of Trade and Industry

¹These Government Approved Certification Organisations are namely: The Hong Kong General Chamber of Commerce, Federation of Hong Kong Industries, The Indian Chamber of Commerce, Hong Kong, The Chinese Manufacturers' Association of Hong Kong and The Chinese General Chamber of Commerce.