Birds-eye view of a cargo ship with multiple cargo shipments in red and blue colors.

Forced Labor Enforcement

US Customs and Border Protection (CBP) is tasked with enforcing the Section 1307 restrictions. CBP investigates allegations of forced labor from NGO’s, media reports, and e-allegations, as well as based on self-initiated investigations.

CBP Inquiries

Customs has recently issued dozens of Risk Analysis and Survey Assessments (RASA) questionnaires that target specific industries, including apparel. The questionnaires have two parts:

Procedural: Requests details regarding the importer’s corporate social responsibility internal controls and policies and the supply chain and labor conditions for each stage of production.
Transactional: (Similar to transshipment review) Importer is required to map the entire supply chain from raw material to export to the US. The importer is also required to supply commercial and production documents, including certificates of origin or manufacturer’s affidavits. This questionnaire is entry specific.

The questionnaires are designed to determine what data is available and review importers’ existing procedures. Companies receive a letter describing the outcome of transactions reviewed. The RASA questionnaires are a targeted inquiry, not an audit- although they can lead to an audit.

CBP Focused Assessments now include a component regarding forced labor. The existence of a forced labor code of conduct and procedures is an element in CBP’s risk assessment and determination of whether an importer is exercising reasonable care.

Our team regularly assists companies in responding to these CBP inquiries.

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Perspectives on Forced Labor Enforcement

WRO’s

If the agency determines that there is a reasonable (but not conclusive) indication that forced labor is used in the production of imported goods, it will issue a Withhold Release Order (“WRO’s), that specifies the products prohibited from importation. CBP publishes a list of the WRO’s, which includes products from Brazil, China, the Democratic Republic of the Congo, India, Japan, Malawi, Malaysia, Mexico, Mongolia, Nepal, Turkmenistan, and Zimbabwe, as well as several fishing vessels. The most recent WRO’s have been focused on China.

Historically, the WRO’s covered specific products from targeted manufacturers. More recently, CBP has issued WRO’s covering specified products for entire regions- i.e., cotton from Xinjiang Uygur Autonomous Region. The WRO authorizes CBP to detain these goods. In order to secure release, importers have the heavy burden of providing information regarding policies and the supply chain as well as extensive documentation to evidence that forced labor was not used to produce the goods.

We can help your company determine whether your products are subject to a WRO and assist with preparing petitions to secure the release of goods.

Findings

If the Commissioner of Customs determines that information conclusively demonstrates the merchandise is produced by forced labor, formal findings are published in the Customs Bulletin and Federal Register. (19 CFR 12.42(f)). Goods covered by the finding are excluded and can be seized and forfeited. This can also lead to a criminal investigation of the importer and heavy penalties.

In the past, Customs issued very few findings. Since 1996, there have only been two findings issued:

10/20/20: Stevia Extracts produced by Inner Mongolia Hengzheng Group Baoanzhao Agriculture, Industry, and Trade Co., Ltd. in China
3/29/21: Disposable Gloves produced by Top Glove Corporation Bhd. in Malaysia.

However, CBP’s Forced Labor Division has indicated that it is likely that many more findings will be issued in the future.

CBP Priority Area

Since the passage of TFTEA, there has been marked CBP enforcement of Section 1307. In 2017, CBP created a Forced Labor Division tasked with investigating forced labor allegations and enforcing Section 1307.

In 2020, shipments valued at $55 million were detained in connection with forced labor WRO’s. That value is expected to increase dramatically this year. While CBP has reported that 90 shipments were detained in Q4 2020, CBP has reported that hundreds of shipments were detained in Q1 2021.

We regularly assist clients with implementing forced labor compliance plans to reduce forced labor supply chain risks.