|2010 GAC Position Papers
The Foreign Manufacturers Legal Accountability Act Harmful to U.S. Companies
The Foreign Manufacturers Legal Accountability Act (H.R. 4678, S. 1606) would have a direct, profound and negative impact on trade – both imports and exports. This legislation would prohibit imports of designated products unless the foreign manufacturer of the product designates a registered agent for service of process in U.S. courts.
- The legislation cannot realize the stated goal of holding foreign manufacturers accountable. Although serving court papers on a cardboard "registered agent" will satisfy the legal requirements for a court to exercise personal jurisdiction over the foreign manufacturer, this is a false promise since most foreign courts will not enforce a U.S. court judgment against the foreign manufacturer.
- The legislation overlooks the fact that Customs and Border Protection (CBP), the Consumer Product Safety Commission (CPSC), the Food and Drug Administration (FDA), among other agencies, already have broad powers to seize, detain or refuse entry to defective or tainted products. U.S. importers are responsible to these and other agencies for the products they bring into the U.S. and are subject to potentially severe penalties for failure to comply with U.S. laws.
- The bills fail to consider the inadvertent, but highly detrimental, impact on U.S. exporters, who very likely will face similar requirements from US trading partners. We fail to see the value in exposing U.S. companies to liability in foreign courts when boosting exports remains the highest priority.
- A revised version of the Senate bill would, instead of an outright ban on imports, require a declaration by the importer stating his belief, after inquiry, that the foreign manufacturer has a registered agent in the U.S. to accept service of process. This requirement reveals a failure to understand a typical supply chain, which is a complex, multi-layered network of trading companies and suppliers where products are sourced and consolidated from multiple countries and multiple suppliers. The U.S. importer knows the identity of the overseas supplier, but not necessarily the various foreign manufacturers – who are often many layers removed from the U.S. importer. Compliance with a declaration requirement would be greatly complicated by the fact that the identity of the actual foreign manufacturer is not currently collected nor is the information readily available in many of today’s supply chain models.
On behalf of U.S. importers and exporters, the National Customs Brokers and Forwarders Association of America (NCBFAA) urges opposition to this legislation. NCBFAA represents U.S. licensed customs brokers and ocean freight forwarders, who serve as an integral link in the import and export supply chain.
Ports Bill Would Undermine U.S. Port Transportation
Legislation (H.R. 5967) introduced by Rep. Jerrold Nadler (D-NY) would amend the Federal Motor Carrier Act to allow local regulation of the trucking industry in and around port areas for environmental purposes. Current federal law preempts state and local regulation of the trucking industry, except as it relates to safety. The bill is portrayed as a necessary step to achieve environmental improvements in the port areas, yet it would have the effect of allowing ports to ban the use of owner-operators and requiring all drivers to be direct employees. The Port of Los Angeles is already seeking to exclude independent owner-operators from providing drayage services in the port area. Although litigation has delayed implementation until now, the Port is preparing to implement a phase-out of owner-operators beginning next year, with a complete ban by the end of 2013. H.R. 5967 would confirm the authority of local jurisdictions throughout the country to take such measures. NCBFAA opposes H.R. 5967. The legislation is:
- Unnecessary: Meaningful environmental improvements are already being achieved at the nation’s ports under current law. For example, the clean truck programs at the Ports of Los Angeles and Long Beach have already reduced truck pollution by 80 percent -- three years ahead of schedule. These impressive results even prompted the American Association of Port Authorities to say there is no need to amend federal law.
- Ineffectual: In reality, the bill will re-impose a patchwork of local government policies to regulate global and interstate commerce without any measurable improvement in air quality or operational efficiencies.
- Anti-Small Business: The greatest impact of the legislation will be a dramatic reshaping of the port drayage industry under the guise of environmentalism. The overwhelming number of port drivers are independent owner-operators – small, family-run businesses that have proven they are capable of being environmental leaders, as the success of clean truck programs at the ports show. In effect, the independent drivers who now make up 95 percent of the port drivers would be banned from the port area.
- Costly and Anti-Competitive: This legislation unnecessarily injects local regulation into the international supply chain – stifling open and healthy competition among drayage providers and increasing costs for importers and exporters. Once again, this is no way to revive a sagging economy.
The National Customs Brokers and Forwarders Association of America (NCBFAA) represent licensed customs brokers and ocean freight forwarders. As key participants in the international movement of goods, we urge you to oppose H.R. 5967.