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Doing Business In Insert Country Name Here

By Debbie Peterson,2014-03-26 16:19
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Doing Business In Insert Country Name Here

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    Chapter 5: Trade Regulations and Standards

    ; Import Tariffs

    ; Trade Barriers

    ; Import Requirements and Documentation

    ; U.S. Export Controls

    ; Temporary Entry

    ; Labeling and Marking Requirements

    ; Prohibited and Restricted Imports

    ; Customs Regulations and Contact Information

    ; Standards

    ; Trade Agreements

    ; Web Resources

    Import Tariffs Return to top

    Non-Agricultural Products and Products Generally

    In November 2003, Taiwan’s Legislative Yuan approved a comprehensive tariff schedule revision to comply with the 2002 version of the Harmonized Commodity Description and Coding System of the World Customs Organization, Taiwan’s Free Trade Agreement

    with Panama, and Taiwan’s accession commitments to the World Trade Organization (WTO). The revised tariff schedule became effective in early 2004. As a result of this revision, Taiwan’s average nominal tariff rate on imported goods, which sood at 6.3

    percent rate in 2003, will fall to 5.5 percent by 2007. However, U.S. industry continues to request that Taiwan lower tariffs on imports of large motorcycles, paper and paper products, plywood, wine, canned soup, biscuits, cookies, snack foods, and certain other commodity classes.

    Upon Taiwan’s accession to the WTO in January 2002, Taiwan implemented a tariff rate quotas (TRQs) system on small passenger cars. Taiwan also lowered tariffs on small passenger cars, resulting in lower prices. Taiwan is a participant in the WTO Information Technology Agreement (ITA). Under the ITA, Taiwan has phased out or reduced tariffs on information technology products.

    A commodity tax must be paid if an imported product falls into one of seven commodity categories. The tax is assessed on the C.I.F. and duty-paid value of affected imports. The seven commodity categories include rubber tires, cement, machine-made cool drinks, oil and gas, certain electric appliances, flat glass, and motor vehicles.

Agricultural Products

    WTO accession brought down tariffs for agricultural products from a pre-accession average of 19.33 percent to 13.30 percent in 2004, with further cuts reducing the tariff to a 13-percent average by 2006. Moreover, it has opened the Taiwan market to commodities formerly banned or subject to strict import controls, including rice, chicken meat, pork offal, and pork belly. Upon WTO accession, Taiwan established TRQ’s for 10/12/2014

    formerly banned products such as rice and rice products, pork bellies, chicken meat, pork offal, poultry offal, liquid milk, peanuts, small red beans, garlic bulbs and some fruit and vegetables. The markets for chicken and red meat products will be fully liberalized in 2005, with tariffs bound at rates ranging from 12.5 to 20 percent. Negotiations for increased market access for rice will continue through 2004.

Special Safeguards:

    Taiwan’s implementation of the WTO Agreement on Agriculture Special Safeguard (SSG) Regime threatens to undermine post-WTO tariff concessions by allowing duty surcharges above tariff binding levels. SSG are triggered when either imports increase too quickly or prices fall below a specified level. Although the SSG regime does not impede imports under the TRQs, it is very likely that Taiwan will increase duties on imports of pork belly and offals, chicken meat, and poultry offals after liberalization in 2005. The price-based SSG triggers, with their 1990-1992 base period will likely boost duties for the foreseeable future on certain products. For example, chicken legs, an important and growing export, will face a 26.67 percent duty instead of facing a 20 percent duty after 2005 if SSG’s are used.

    In addition to tariff, all imports must pay a Commercial Harbor Service Charge, which is assessed based on cargo weight and ship net tonnage.

    Trade Barriers Return to top

    Although authorities have taken steps to improve the business and investment climate, U.S. firms report that impediments remain in some sectors, especially services. Rules on local licensing of professionals are cited as a barrier to foreign providers of some services. Some foreign investors complain of lengthy and non-transparent approval processes. Taiwan’s science-based industrial parks and export processing zones by

    contrast offer streamlined procedures. While Taiwan has made significant improvement in protecting intellectual property, some foreign firms still cite inadequate protection as a deterrent to investing.

    Import Requirements and Documentation Return to top

    Taiwan categorizes imports into controlled and permissible items. In order to comply with its WTO commitments, Taiwan eliminated import controls on 99.19 percent of 11,001 official import product categories. Currently, 24 product categories require import permits from the Board of Foreign Trade. Imports of 65 categories are “restricted”, including ammunition and some agricultural products. These items can only be imported under special circumstances, and their importation is effectively banned. Prohibited imports include: narcotics, toxic chemicals, hazardous waste, and fireworks. Arms, munitions, and explosives are banned outright.

Non-Agricultural Products and Products Generally

    A foreign supplier's pro forma invoice (quotation) is required for application of an import permit and the establishment of a letter of credit. Documents required for shipments to or from Taiwan include the commercial invoice, bill of lading or airway bill, and packing list. A certificate of origin is also required for designated commodities such as sedans, 10/12/2014 2

    other small passenger cars and their chassis, tobacco and alcohol products and some agricultural products. Shipments of agricultural products, plants, and animals to Taiwan may require certificates of inspection or quarantine issued in the country of origin and are subject to inspection and quarantine upon importation into Taiwan.

    The commercial invoice must show the import license number; FOB, C&F, or CIF value; insurance; freight; and discounts or commissions, if any. The commodity description and value shown on the commercial invoice must agree with those on the import license, if any. No requirements exist as to the form of a commercial invoice or a bill of lading. In addition to the information generally included in a standard bill of lading, all marks and case numbers appearing on packages must be shown. Customs does not permit the grouping of marks or numbers on a shipment of mixed commodities.

Agricultural Products

    Fresh produce is inspected for pesticide residues and accompanying phytosanitary certificates are checked closely for completeness and accuracy. Rice shipments imported by the public sector continued to be subject to lot-by-lot inspection. However, private sector importers are allowed to move rice from the port to their own warehouses immediately after inspectors have taken samples for inspections as long as they sign a guarantee letter assuming full responsibility for the rice shipment passing inspection. Border inspections of meat products consist of a visual inspection, a random test for animal drugs and pesticide residues, and a thorough check of the accompanying health certificates for accuracy and completeness. If discrepancies or insufficiencies are found on these certificates, this can lead to delays in customs clearance and a possible rejection of the entire shipment. The food safety inspection of processed foods focuses on labeling, food hygiene, and food additives.

    U.S. Export Controls Return to top

    Although the U.S. system of export controls has treated Taiwan as a friendly partner, Taiwan remains a focus of dual-use export control activities by virtue of its position in the global trading network and its proximity to the Chinese mainland. The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) is responsible for implementing and enforcing the Export Administration Regulations (EAR), which regulate the export and re-export of most commercial items. We often refer to the items that BIS regulates as "dual-use" - items that have both commercial and military or proliferation applications - but purely commercial items without an obvious military use are also subject to the EAR.

    A relatively small percentage of total U.S. exports and re-exports require a license from BIS. License requirements are dependent upon an item's technical

    characteristics, the destination, the end-user, and the end-use. It is the responsibility of the U.S. exporter to determine whether a given export requires a license. If an item requires an export license, the exporter must file an application with the BIS. If the application is approved, a license number and expiration date will be provided for use on the export documentation. Further information is available from BIS at http://www.bis.doc.gov. A good starting point for U.S. exporters to obtain hands-on information about licensing requirements and regulations is to attend a U.S. Department 10/12/2014 3

    of Commerce export control seminar. For counseling assistance, please contact the Department of Commerce at 202-482-4811 (Washington, DC) or 949-660-0144 (California).

    Temporary Entry Return to top

    Taiwan is not a member of the ATA Carnet system. However, Taiwan has signed bilateral agreements with 26 nations, including the United States, Canada, Switzerland, South Africa, Singapore, South Korea, Japan, Israel, New Zealand, Australia, Norway, Italy, Luxembourg, Portugal, Spain, Sweden, Swaziland, United Kingdom, France, Germany, Belgium, Denmark, Finland, Greece and Ireland to implement the ATA Carnet. These agreements grant temporary customs exemptions for commercial samples, professional equipment and exhibition goods, which are brought into Taiwan for sales promotion and exhibition purposes on a temporary basis. They facilitate international business by avoiding extensive customs procedures, eliminating payment of import duties and value-added taxes, and replacing the purchase of temporary import bonds. Upon conclusion of the event, items must be shipped out of Taiwan within one year to avoid imposition of tariffs and other import taxes.

    The agreement with the United States to implement the TECRO/AIT Carnets was signed in December 1999. Like the ATA Carnet, TECRO/AIT Carnets are valid for up to one year and allow U.S. exporters to avoid duties and taxes when entering Taiwan. The TECRO/AIT Carnets issued exclusively for Taiwan are very similar to the traditional ATA Carnets, but must be applied for separately (due to the U.S.’s lack of diplomatic recognition of Taiwan). For example, if traveling to both Taiwan and an ATA Carnet country, one would have to apply for a TECRO/AIT Carnet and an ATA Carnet. Questions regarding the process of the TECRO/AIT Carnets should be directed to the ATA Caret Department, U.S. Council for International Business at 1212 Avenue of the Americas, New York, N.Y. 10036, Tel: 212-703-5078, Fax: 212-944-0012, Website:

    http://www.uscib.org/, Email:atacarnet@uscib.org.

    In the case of imported goods on which only a rental is incurred, without a transfer of ownership, the duty paying value shall be determined on the basis of the rental amount plus the transportation fee and insurance fee. With regard to the imported goods entering Taiwan for repair or assembly, the duty paying value shall be based on the costs of repair or assembly (excluding freight and insurance).

    Labeling and Marking Requirements Return to top

    Taiwan labeling regulations require that the net contents of packaged goods shall be shown in metric units. Dual labeling in metric and non-metric units is permitted. Measuring instruments calibrated in non-metric units must show metric equivalents. All imported cargo must bear a mark of distinctive design, a set of three or more letters, or a combination of design and letters indelibly stenciled, stamped, or burned on the packing or on the cargo itself. For cargo packed in cases, boxes, crates, casks, drums, or cylinders, each container should bear a separate number, which cannot be repeated for two years. Bags or bales also must bear a nonrecurring number, date, or set of three or more letters. In addition, each package of a consignment must be numbered consecutively. Numbering is not essential for large lots of cargo except when packaged 10/12/2014 4

    in cases, boxes, or crates, provided that each package of the consignment contains cargo of identical weight.

    Food Product Labeling. As required by the March 1995 amendment to Taiwan’s “Law Governing Food Sanitation,” Taiwan strictly enforces the Chinese language-labeling

    requirement for food items sold at retail (with some exemptions for selected food-service items) and requires that the labels be affixed before customs clearance. Required information includes name and address of the manufacturer or importer, expiry date, list of food additives, and weight, volume or quantity of ingredients. If you have questions on labeling requirements for food products, please contact the AIT Agricultural Trade office at atotaipei@usda.gov.

    Prohibited and Restricted Imports Return to top

    For political, diplomatic or economic reasons, the Taiwan authorities have placed restrictions on the imports of certain permissible goods from designated procurement areas. Also restricted and/or controlled is the importation of certain products on the grounds of national security, maintaining the public order, or preserving human, animal or plant health. All require a prior import permit issued by the Board of Foreign Trade.

    Presently, vessels that carry goods imported from and exported to China can only sail indirectly; that is, they must call on a third port (in some cases it is reported that the requirement is met by vessels simply transiting the waters of a third territory). Taiwan is significantly liberalizing imports of products from China (PRC) as both have joined the WTO. Currently, 8,643 categories or 78.30 percent of all import categories in the Taiwan tariff schedule can be imported from the PRC; the rest remain banned. However, Taiwan will continue to review imports from the PRC and consider further relaxations once every six months or on a regular basis, as requested by the business sector.

    Starting May 19, 1998, Taiwan extended to all banned PRC imports the same rules and regulations it applies to all other imports with regard to country of origin and value added processing. In other words, banned goods from the PRC can be imported if it can be shown that they were primarily made elsewhere, and did not undergo substantial transformation in the PRC. The definition of "substantial transformation" is value added exceeding 35 percent of the final export value of the goods. In addition, bonded factory companies and enterprises located in export processing zones and science-based industrial parks which produce wholly for export markets are permitted to import banned manufacturing components and raw materials from the PRC.

    Customs Regulations and Contact Information Return to top

    Taiwan revised its Customs Law in July 1986 in order to implement procedures consistent with the "Agreement on Implementation of Article VII of the GATT." This article refers to the valuation of all imports for the assessment of duties. In accordance with its WTO accession agreement, Taiwan again amended its Customs Law in May 1997 and formally implemented the amendments to bring Customs Law into conformity with the Customs Valuation Agreement on January 1, 2002.

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    The dutiable value of an import into Taiwan is defined as its cost, insurance and freight (C.I.F.) value. Under the Revised Customs Law, duty-paying value (DPV) is based on the transaction value, which is the import cost.

    Directorate General of Customs, MOF

    13 Ta Cheng Street, Taipei 103, Taiwan

    Tel: 886-2-2550-5500

    Fax: 886-2550-8111

    http://www.dgoc.gov.tw

Standards Return to top

    ; Overview

    ; Standards Organizations

    ; Conformity Assessment

    ; Product Certification

    ; Accreditation

    ; Publication of Technical Regulations

    ; Labeling and Marking

    Overview Return to top

    The Bureau of Standards, Metrology and Inspection (BSMI), under the Ministry of Economic Affairs (MOEA) has responsibility for the development, compilation and publication of “Chinese National Standards” (CNS) as well as for conformity assessment. BSMI also implements commodity inspection measures as stipulated in Taiwan’s Commodity Inspection Law.

    Taiwan promulgated the Standards Act in 1946, establishing a National Bureau of Standards under the MOEA. The Standards Act was amended in 1997 to accommodate changes in global trade and in anticipation of future WTO obligations. The “Regulations for the Establishment of Chinese National Standards” were amended in 1996 and again

    in 1998 to promote standards quality and to facilitate harmonization of national with international standards. Responsibility for standardization was taken over by the Bureau of Standards, Metrology and Inspection (BSMI) on January 26, 1999, as a result of a reorganization aimed at integrating conformity assessment activities.

    Taiwan’s national standards are based primarily on international standards such as those set up by the International Standards Organization (ISO), International Electrotechnical Commission (IEC) and International Telecommunications Union (ITU). Taiwan acceded to the WTO on January 1, 2002. The preparation, adoption and application of national standards comply with the requirements of the Agreement on Technical Barriers to Trade (TBT) of the WTO.

    National standards are classified under 26 categories. As of May 2004, 17,871 standards were under implementation, of which, 612 have become mandatory regulations. 221 mandatory standards have been harmonized, accounting for 82% of the 269 standards included in the WTO TBT agreement. BSMI expects to complete harmonization of the remaining 48 by the end of 2004. Of the 103 items that are 10/12/2014 6

    included in the Asia Pacific Economic Cooperation (APEC) programs, BSMI has completed the harmonization of 84.

    BSMI administers the CNS Market Certification System whereby products meeting standards are allowed to carry the CNS mark. BSMI also carries out necessary food and safety inspection measures while the Bureau of Animal and Plant Health Inspection & Quarantine (BAPHIQ) is responsible for inspection and quarantine for the purpose of safeguarding animal and plant health. Taiwan’s sanitary and phytosanitary (SPS) standards are, for the most part, different from U.S. standards or those established by international regulatory bodies such as the Office of International Epizootic (OIE) or the Codex Alimentarius.

    Standards Organizations Return to top

    The Standards Division (First Division) of BSMI is responsible for drafting standards policies and regulations. This division consists of four sections, with the First Section responsible for general standardization activities including the drafting of regulations, guidance, harmonization planning, administration of the CNS mark, compilation of the standards gazette and promotion of national standards. The remaining three sections are each responsible for standards in specific industry sectors.

    In addition, there are four standards-related institutions under BSMI involved in the development and promotion of Chinese National Standards. These are the National Standards Review Council, the National Standards Technical Committee, the National Information & Communication Initiative Committee - Technology & Standards Team, and the National Information & Communications Security Taskforce - Standards & Specifications Group.

    BSMI issues plans for standards development semi-annually. These plans are published in the National Gazette and filed with the WTO Secretariat in accordance with the TBT agreement.

    BSMI has established an on-line system for the public to obtain Chinese National Standards information on line: http://www.bsmi.gov.tw or http://cnsm.bsmi.gov.tw. The

    former website also provides access to updated standards gazettes.

    Conformity Assessment Return to top

    The Sixth Division of BSMI is in charge of testing and inspection methods. This division currently conducts testing in areas including electromagnetic compatibility (EMC), biochemistry, chemistry, polymers, materials, electrical engineering and mechanical engineering.

    Before 1997, Taiwan relied on batch inspection as the only conformity assessment procedure available to ensure compliance. Along with the development of a technical infrastructure leading to advances in testing capabilities, the Commodity Inspection Act was revised in 1997 and again in 2001 to create a framework for a type-testing system and Supplier’s Declaration of Conformity (SDoC) as replacements for traditional batch inspection. The type-testing system was implemented in January 1999 while SDoC was introduced for certain electronics products in January 2002.

    10/12/2014 7

    Under the new type-testing system, “Registration of Product Certification” (RPC), products are subject to the appropriate conformity assessment modules as determined by the authorities. These seven modules cover both the design and production phases of product manufacture. They consist of Internal-Control (Module I), Type-Test (Module II), Conformity-to-Type Declaration (Module III), Full Quality Assurance (Module IV), Production Quality Assurance System (Module V), Product Quality Assurance (Module VI), and Factory Inspection (Module VII). Conformity assessment for Module II, which requires safety or electromagnetic compatibility (EMC) testing or inspections, is required for all products. Module III, IV, V, VI or VII are applied in combination with Module II as specified by MOEA.

    The SDoC is the least trade restrictive conformity assessment procedure, and is currently applied only to low-risk products with stable manufacturing technology. Under the SDoC scheme, manufacturers may have testing done by BSMI designated laboratories, prepare their own technical documents, and draft the declaration of conformity themselves. Products using the SDoC approach are under market surveillance by BSMI. Products permitted to use the declaration of conformity approach may be imported without customs inspection.

    Currently, a total of 19 commodities are covered by the SDoC system, mainly parts or accessories for information technology products, including electronic calculators, hard discs, floppy discs, optical discs, storage units and power supplies. A complete list of products is available in BSMI’s website: www.bsmi.gov.tw.

    Product Certification Return to top

    Products specified by MOEA must comply with inspection requirements before they are shipped from the manufacturing premises or imported and placed on the market. Manufacturers or importers of these products must apply to BSMI for inspection before shipment or importation. Beginning on January 1, 2004, BSMI adopted a dual-track approach to allow manufacturers or importers to choose the “Registration of Product Certification” (RPC) scheme or a Batch-by-Batch inspection (BBI) with Type Approval.

    The RPC scheme encompasses requirements for the product design stage (type testing) and manufacturing stage (quality management system). In other words, while applying for the Registration of Product Certification, both the product design and manufacturing process must conform to the requirements specified by BSMI. With the RPC certificate, domestic manufacturers may ship their products and importers may proceed directly with customs clearance.

    Importers or firms having small numbers of products for sale in the domestic market may find the BBI with Type Approval approach easier. According to BSMI, upon approval of the sample product, the random inspection rate is about 10%.

    Taiwan’s safety regulations follow IEC and CNS standards. All safety testing for end products must be done in Taiwan by Taiwan-accredited laboratories. The UL safety certification has never been considered sufficient to meet Taiwan requirements for end product safety certification. While some products that have UL safety certification may have entered Taiwan in the past, that approval for entry was based on BBI results, not UL certification. Home appliances, certain fire fighting products, electrical power 10/12/2014 8

    distribution devices (including cables and switches), lighting products for in-door use and motors require safety testing or inspection.

    In order to enhance the protection of consumers from hazards posed by telecommunications and electrical and electronics products, and to meet international requirements for electromagnetic compatibility (EMC), BSMI has promulgated “Regulations Governing Electromagnetic Compatibility of Commodities.” Manufacturers or importers must obtain type approval of their products from BSMI and all products must apply for inspection based on the EMC type approval certificate. Currently, products subject to EMC inspection include copy machines, television sets, VCRs, information technology products, household appliances, computer components, and power tools.

    As of 2003, a total of 543 items were subject to mandatory inspection before being allowed on the domestic market. These items include 197 chemical products and 346 mechanical and electrical products.

    Mr. Lin Huei-Shiun, Chief of the Second Section of the Third Division, is the contact point to assist firms with problems in this area. Tel: 886-2-2343-1783, Fax: 886-2-2393-2324, e-mail: hs.lin@bsmi.gov.tw. BSMI also has an English language section on its website describing measures governing the registration of product certifications.

http://web-server.bsmi.gov.tw/english/rpc/mgrpc.htm

    There is currently an Electromagnetic Compatibility (EMC) Mutual Recognition Agreement (MRA) between the U.S. and Taiwan covering information Technology (IT) products. In accordance with the terms of this MRA, BMSI accepts EMC testing by any laboratory located in the United States and accredited by the National Institute of Standards and Technology (NIST) under the NAVLAP program. NIST accredited labs outside the U.S. are not accepted by BSMI.

    Accreditation Return to top

    On January 6, 2004, BSMI integrated the operations of the Chinese National Laboratory Accreditation (CNLA) and the Chinese National Accreditation Board (CNAB) to form the Taiwan Accreditation Foundation (TAF). TAF is the island’s sole national accreditation

    body, responsible for supervision of CNLA and CNAB, both of which conduct accreditation work in accordance with international standards and the requirements of international organizations. Based on the ISO/IEC Guide 58, CNLA has set up an accreditation management system and follows ISO/IEC 17025, a new version of general requirements for laboratories. CLAB has adopted ISO/IEC Guide 61 and International Accreditation Forum (IAF) guidance to conduct accreditation for management system accreditation bodies, product certification bodies, auditor certification bodies, auditor training course providers, and inspection bodies.

    Accreditation for labs is conducted on a voluntary basis. At present, CNLA provides laboratory accreditation in 12 fields. The 12 fields include acoustics and vibration testing, mechanical testing, non-destructive testing, biological testing, chemical testing, ionizing radiation, electrical testing, optical testing, calibration, temperature and heat testing, construction, and medical testing. So far, CNLA has accredited more than 1000 laboratories in Taiwan. There are 20 bodies accredited under CNAB. Of these 20 10/12/2014 9

    accredited bodies, 11 are engaged in accreditation of quality management systems; six for environmental management systems; one for auditor training courses; and two for product certification.

    Information about laboratories accredited by the CNLA is available on the CNLA website: www.cnla.org.tw. In addition, the CNAB website

    (http://www.moea.gov.tw/~cnab/index.html) provides a current directory of accredited

    bodies, certified organizations of the accredited bodies, accreditation process notices, classification of accreditation scope, documents required for application for accreditation, and accreditation requirements.

    Publication of Technical Regulations Return to top

    Proposed and final technical regulations are submitted to the MOEA by the BSMI for publication. This information is then published in the National Standards Gazette. In addition to the Gazette, BSMI also publishes several pamphlets to propagate information on standards. These pamphlets include the Catalogue of National Standards Categories, List of CNS Mark Product Items and Directory of CNS Mark Companies, Compilation of Laws & Regulations of Applying for CNS Mark, Q&A on Standards and CNS Mark, and Q&A on Technical Barriers to Trade. BSMI’s website (www.bsmi.gov.tw) also provides

    updated information from standards gazettes and on standards regulations.

    U.S. entities can provide their comments about local technical regulations or other related issues by contacting the BSMI directly or through the National Enquiry Point under the WTO TBT Agreement in the U.S. The BSMI Information Center performs the functions of National Enquiry Point under the WTO TBT Agreement for other countries. Labeling and Marking Return to top

    Taiwan’s Commodity Labeling Act was first promulgated in January 1982 and amended in 1991 and 2003. A revised Commodity Labeling Act took effect on June 25, 2004. In labeling commodities, the writing shall be in Chinese and may be supplemented by English or other foreign language. When an imported commodity is introduced for sale on the domestic market, labeling and instructions or sales literature written in Chinese shall be added to the commodity by the importer. The contents provided in Chinese language shall not be simpler or more condensed than those from the place of origin of such commodity. The name/title and the address of the foreign manufacturer of an imported commodity to be labeled may not be written in Chinese language.

    Where a commodity is introduced for sale on the domestic market, the following particulars shall be labeled:

    1. Name of the commodity;

    2. Name, telephone number and address of the producer or manufacturer, the

    place of origin of the commodity, and the name, telephone number, and address

    of the importer for imported commodity;

    3. Contents or composition of the commodity;

    - Major components/ingredients or materials.

    - Net weight, volume or quantity, or measurements shall be labeled in statutory 10/12/2014 10

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