Statement of Airport Duty Free Stores 

The International Association of Airport Duty Free Stores is pleased to submit these comments for the record of your October 4, 2007 joint subcommittee hearing on Import Safety.

IAADFS represents operators of airport duty free stores.  Our members import a narrow range of products for sale duty-free to travelers exiting the United States. Strict government regulations apply to our operations to ensure that only ticketed passengers traveling to a foreign destination may purchase products in a duty free store. As a further precaution, items purchased in a duty free store cannot be carried out of the store by the traveler, but instead must be delivered directly to the departing aircraft at a point of no return.  As such, the products never enter the stream of US commerce.

As the Committee exercises its jurisdiction over the serious issue of import product safety, we encourage you to remain aware of its impact on the import process, including the very unique environment of airport duty free stores.  Legislation should reflect the fact that:

• Products sold in a duty-free store never enter US commerce.  The products are imported, held in a highly regulated customs bonded warehouse that is subject to stringent security standards, and sold only to passengers leaving the US, as described above.
• The duty-free industry was subject to rigorous security and accounting procedures long before the nation became concerned about terrorist threats or unsafe products.  These procedures were established initially to protect the revenue of the US Treasury, but now serve to assure protection against security or safety concerns, as well.  The government recognized the need to facilitate personal purchases by individual travelers crossing international boundaries.  Therefore, the law creates the framework for US duty-free stores to sell imported products duty- and tax-free to these individual travelers leaving US soil.  However, in return, virtually every aspect of a duty free store’s operation – from import to export – is subject to the highest regulatory requirements to make certain these products do not enter US commerce but are sold for export only.
• Products sold in duty fee stores are low-risk products.  They tend to be high-end luxury items. The range of food products is very narrow and includes items such as expensive chocolates or gourmet packaged food.  The supply chain is also very secure, with CBP regulating and overseeing each movement within the US.

 With the volume of imports at an all-time high, it does not make sense to devote scarce FDA or other agency resources to this highly regulated niche of low-risk, imported products that never enter the stream of US commerce.  We therefore urge the committee to apply any new import safety rules to products “imported for consumption in the US”. 

 Similarly, any product safety legislation should also provide a narrow exclusion for products brought back to the US by returning citizens and US residents under the personal use allowances (Chapter 98 of the Harmonized Tariff System).  There would be no purpose served by subjecting individual Americans bringing back small personal use quantities, purchased during their travels overseas, to the fees, rules, restrictions and penalties that may apply to commercial importers.

Thank you for the opportunity to submit these comments and please let me know if you require additional information and/or have any questions.