More Than $2 Million In Fake Goods Seized In CNMI

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Customs director says bust a warning to smugglers

By Haidee V. Eugenio

SAIPAN, CNMI (Saipan Tribune, June 11, 2013) – Over 12,000 fake Burberry and Polo Ralph Lauren shirts that would have sold for some $2.178 million had they been genuine, along with rolls of clothing labels, raw garment, cutters, illegal cigarettes and liquors, were discovered and seized by Northern Marianas customs and quarantine inspectors in May inside a 40-foot container from mainland China. Authorities, however, are faced with bigger questions.

Customs director Joe Mafnas, in a news briefing yesterday morning, said there may be small-scale underground garment manufacturing on Saipan, with the presence of global brand clothing with "Made in Northern Mariana Islands" labels sold on the island-including at flea markets-when the last of the garment factories closed in 2009.

This is coupled with the recent discovery of clothing labels, raw garment, and cutters smuggled from mainland China to Saipan.

The discovery of these undeclared, illegal, and fake items, he said, should serve as a lesson to other smugglers.

Mafnas said an individual who is supposed to be the owner of the shipped items was arrested on Friday and was scheduled to appear in court yesterday.

The man was later identified as Qing Liang Ming, owner of Ming Li Corp.

Finance Secretary Larrisa Larson said the investigation on the matter is ongoing, adding that smuggling of items into the CNMI is not something that will be taken lightly.

"Any time someone smuggles something into the Commonwealth, it's lost revenue for everyone in the Commonwealth and it's something we take very seriously," Larson said.

Also in the news briefing were Customs seaport branch manager Greg Sablan, Department of Lands and Natural Resources Secretary Arnold Palacios, and DLNR quarantine supervisor Tina Camacho.

Mafnas said a 40-ft container arrived on Saipan on May 19. Three days later, Customs put the container on hold for 100 percent inspection. Customs and quarantine inspected the container on May 28.

Large items such as eight freezers were placed near the opening of the container, making it hard to get to the inner part where the undeclared, counterfeit and illegal items were discovered. Little spaces in the container, Mafnas said, were filled with small items such as toys.

Mafnas said there were 2,012 cartons of Marlboro cigarettes found. They were not only undeclared but were also not supposed to be sold in the CNMI as its packaging states.

The retail value of the cigarettes is $55 per carton, for total retail value of $110,660.

Customs and quarantine also discovered 666 cartons of undeclared and illegal Chinese brand cigarettes with a street value of $20 per carton or a total of $13,320.

"The smuggler would have profited, tax free some $124,000 from the cigarettes alone. If the cigarettes are legit, the total excise and beautification tax would have amounted to $55,883," Mafnas said.

Government inspectors also found 84 cases of undeclared and illegal Chinese liquors. If they were legit, excise, and beautification taxes would have been $3,400.

Counterfeit luxury brands

Customs and quarantine inspectors also discovered 6,063 pieces of Polo Ralph Lauren polo shirts.

Mafnas said the "street value" is estimated at $30 a piece or $181,890 for 6,063.

Had they been genuine products, they would retail at legitimate shops such as DFS for $98 or a total of $594,174.

Also found were 5,978 pieces of Burberry shirts. Customs said the estimated "street value" is $30 a piece or $179,340 for everything.

However, if they were genuine Burberry shirts, the estimate retail price at legitimate shops is $265 per piece or a total of $1.584 million for 5,978 shirts.

Enforcement

Larson, during the news briefing, commended Customs staff and employees for "putting their heart into what they do."

"A lot of times it's reported there's no enforcement. But there is enforcement. We try to use what we can and make the best of what we have. We really try to keep the playing field equal for all. We have all these legitimate businesses [that] are doing their part, paying their taxes, following the laws and regulations. And any time someone comes in and does something like this they cheat and make it harder for people who do the right thing," she said.

The Finance secretary said there would be stronger enforcement.

"I hope that we don't see too many instances like this but people who do try to come in, it will be a lot more difficult to come in and try to commit fraud in the Commonwealth. We are going to make it as hard as possible for all of them," Larson added.

Mafnas, who was appointed back to Customs in March as acting director before becoming director once again in April, said, "Like any other smuggler, they would deny that they know what's in there," when asked about the owner's reaction when the undeclared items were discovered.

"On top of that, it's fraud because [they have] 'Made in the Northern Mariana Islands USA' label. and we know there are no garment factories here," he said.

There may be more to the issue than the confiscation of undeclared and illegal items.

"With this interception, I think there is, maybe not a big one but you know I'm not going to say there's none," when asked whether Customs thinks there is underground garment manufacturing on the island.

When asked whether the Polo Ralph Lauren, Burberry, and other luxury brands being sold at the flea market in Susupe every Saturday, for example, are real or fake, Mafnas said, "I have to say it's counterfeit. I mean the only place where you can find genuine right now is Duty Free."

He said he could not comment further on the fact that these items sold at flea markets in Susupe every Saturday have not been confiscated.

"There's no doubt those came in through somewhere, ports of entry. I'm not at liberty to talk about that. I wasn't here, but from here on, we are going to be more vigilant in ensuring that nothing like this passes through Customs," he said.

Depending on the court's decision, Mafnas said Customs is ready to incinerate or destroy the confiscated items.

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