Forced labor as a priority issue for importers

In 2015, the passage of the Trade Facilitation and Trade Enforcement Act (TFTEA) brought a renewed interest and focused by Customs and other government agencies on many issues. Forced labor was a key area the agency cited that would receive greater attention, and since passage, the agency has taken several significant steps in this area.

In both the previous and current administrations, forced labor in supply chains has risen in prominence and importance and should be a priority issue for all importers. Every company should be working backward through a product’s bill of materials from finished goods to raw material in their supply chain to ensure compliance with all regulations that govern admissibility into the United States.

 Prison and child labor were the two most significant liabilities to an importer. There are various tools available to help vet potential factories or suppliers found in violation, including the Responsible Sourcing Tool website.

In recent years, as the trade war between the US and China heated up, the treatment and imprisonment of minority Muslim Uighurs in China’s western Xinjiang region have focused attention on what products are produced using their forced labor. China disagrees vehemently with the camps’ role and purpose, but they are increasingly alone as an array of countries line up against them on this vital human rights issue.

When CBP determines that a product has been produced with forced labor, the agency can issue a Withhold Release Order (WRO), preventing such goods from entering the United States commerce. Last year, we saw the agency prominently highlight an air freight shipment detention to JFK containing thirteen tons of human hair made with forced labor.

The agency has also identified, targeted, and issued WRO’s products, including stevia, garments, tobacco, and seafood. As of January 28, 2021, there were 47 active WRO’s from multiple countries besides China.

The most recent and most extensive was issued on January 13, 2021, and is not focused on a single producer or exporter but what the government deems the Xinjiang Uyghur Autonomous Region. Customs has set up an extensive FAQ covering cotton and tomato products and downstream products made with products from those two categories.

The interest in forced labor is not just in the United States. Law firm ST&R reports that the UN Human Rights Commission recently sent letters to well-known international brands headquartered in the US, Europe, and Asia.

“According to the letters, the UNHCR has received information that these companies may be involved through their supply chains in alleged forced labor, arbitrary detention, and trafficking in Uyghurs and other minority workers within and outside China’s Xinjiang Uyghur Autonomous Region. These workers are predominantly employed in low-skilled, labor-intensive industries such as agribusiness, textiles and apparel, automotive, and technology.”

A significant impediment to fully ascertaining the authenticity of a forced labor claim is hindered by China’s refusal to allow independent monitors to visit factories and speak with the workers. Absent this freedom, the global supply chain community is advised to default to the position that the workers are not free and the goods they produce should be considered manufactured with forced labor.

 Sobel understands the exposure that global companies face in their supply chains. Whether shipping to the United States or directly from countries or regions with forced labor issues, our customs brokers and have the know-how to both help research these issues. With a network of law firms and organizations who can directly aid in supporting supply chain validations and verifications and assess risk and exposure to a government prohibition on entry.