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Antiterrorism measure socks local importer

He stands to lose $30,000 after U.S. Customs seized his goods under sanctions imposed retroactively. Other victims will likely emerge.

By Thomas Ginsberg
Inquirer Staff Writer

BARBARA L. JOHNSTON / Inquirer Suburban Staff

Jerry Sorkin, owner of J.M. Sorkin, an antiques and Rug Store in Wayne, with a 19th-century Indian statue. The U.S. seized his shipment under antiterrorism sanctions - retroactively imposed.

A little-known antiterrorism measure may be inflicting collateral damage on several U.S. businesses that import goods from China, including a merchant in the suburbs of Philadelphia.

J.M. Sorkin, an antiques and rug store in Wayne, stands to lose about $30,000 in inventory, owner Jerry Sorkin said Friday. A SouthCarolina wholesaler, 828 International Trading Inc., may lose rugs worth more than $100,000 that were seized upon arrival in the United States, said CEO John Shepherd.

"We wouldn't do anything that we thought was hurting the United States," Shepherd said. "But this has backfired. It's the same old story: The government does something, and the ripple effect hits the small guys the worst."

On May 23, the State Department imposed economic sanctions against the China North Industries Corp., also known as Norinco, for allegedly assisting in Iran's weapons programs. Norinco was one of several companies - others are Chinese and North Korean - ultimately barred from trading with the United States.

Norinco, a major shipping and supply company, has denied the allegations.

The sanctions required agents from U.S. Customs to seize and bar importation of any goods "associated with Norinco" or the other companies, according to Chris Bentley, a spokesman for the Bureau of Customs and Border Protection, part of the Department of Homeland Security.

The sanctions were retroactive to May 9. However, unlike other trade sanctions, the retroactive date was imposed with no grace period for shipments already in transit, according to several U.S. officials.

That meant that Norinco shipments sent after May 9 could be seized at their final destination, often weeks later, even though importers had no way of knowing that they would be breaking a law, and had no way of switching carriers after they found out.

BARBARA L. JOHNSTON / Inquirer Suburban Staff

Owner Jerry Sorkin at J.M. Sorkin in Wayne. He and other importers had no way of knowing that they would be breaking an antiterrorism law - no way of switching shipping firms after they found out.

A State Department official, speaking on condition of anonymity, said: "A grace period was not deemed appropriate in this case... . That's all I can say."

Now, an unknown number of U.S. importers may be socked by this lack of a grace period, said an official from the U.S. Treasury Department's Office of Foreign Assets Control, which oversees the sanctions.

Sorkin, the Wayne importer, said Norinco shipped his 40-foot container - packed with three Asian rugs and about 300 crates of restored antiques, which in total cost him about $30,000 - on May 12 from China. That was more than a week before the sanctions were imposed, but three days after the retroactive effective date.

Sorkin said his container arrived June 12 in New York, then was shipped by rail to Philadelphia, where Customs inspectors seized it. On Thursday, Sorkin was formally told either to reexport his container or destroy its contents - at his own expense.

"I want my own container, but I'm also trying to [expose] the hypocrisy of retroactive sanctions," Sorkin said. "If somebody says there's a date and a [national security] concern about something, every American would say, 'Yeah, I understand.' But that's not who's being punished right now."

A Homeland Security official, speaking on condition of anonymity, confirmed Sorkin's account and said there was no concern about his container's contents, only about the shipper.

Shepherd, the South Carolina distributor, based in Greenville, said his container with 1,300 Asian rugs departed May 15, landed in Seattle, and was shipped by rail to Charleston, where Customs agents seized it June 15. He said he financed the shipment with a letter of credit "in excess of $100,000."

"I'm going to have to pay it whether I get my goods or not," Shepherd said. "The [shipping fee] is going to Norinco anyway, which is ironic. And I'm not going to get the goods."

Shepherd said he was scrambling to import, by air, replacement rugs at a huge loss to keep his retail customers happy.

"This is sort of unprecedented for the State Department to do this, to cause this kind of problem," Shepherd said, adding that the debacle could be a "major blow" to his small company.

Both companies said they were pursuing the matter through their congressional delegations.

State Department officials able to speak about the matter on the record could not be reached Friday.

The State Department official who declined to be named said: "It's not that we don't have any regard for these companies... . It's that stopping this proliferation of weapons to Iran is paramount. That's all I can say. I don't make the rules."

© Copyright 2003 J. M. Sorkin - ALL RIGHTS RESERVED.