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Forced Labor Risk Management Principles Recommended for Importers

Tuesday, August 28, 2018
Sandler, Travis & Rosenberg Trade Report

U.S. Customs and Border Protection has posted to its website a list of recommended business practices to address the risk of forced labor in global supply chains.

19 USC 1307 prohibits the importation of goods mined, produced, or manufactured, wholly or in part, in any foreign country by forced labor, including convict labor, forced child labor, and indentured labor. Such goods are subject to exclusion and/or seizure and may lead to criminal investigation of the importer. The Trade Facilitation and Trade Enforcement Act of 2015 closed a loophole in this law that had allowed imports of certain forced labor-produced goods if they were not produced domestically in such quantities as to meet consumptive demands. When information reasonably indicates that violative goods are being imported CBP may issue withhold release orders against those goods.

CBP encourages stakeholders to closely examine their supply chains to ensure that imported goods are not mined, produced, or manufactured, wholly or in part, with prohibited forms of labor; i.e., slave, convict, forced child, or indentured labor. To that end, the agency has recommended the Department of Labor’s Comply Chain principles for creating a social compliance system as a best business practice.

Comprehensive Supply Chain Profile

- Does the U. S. importer have a comprehensive understanding of the natural supply chain from sourcing of raw materials to subcontracting manufacturing to the assembly of finished goods destined for the U.S.?

- With respect to its products, has the U.S. importer conducted a comprehensive risk assessment of forced labor in the global supply chain and conducted onsite production visits to the factory, farm, or mine for high-risk countries?

- Is the U.S. importer engaged with industry specific multi-stakeholder initiatives?

Written Code of Conduct

- Has the U.S. importer developed and applied a formal written code of conduct for all international interactions associated with the sourcing of foreign goods?

- Is the code of conduct shared with all suppliers in the global supply chain as a stand-alone document or as addendums to purchase orders, contracts, or letters of credit?

- Does the code of conduct include specific language as to minimum labor standards as specified by the International Labor Organization, other intergovernmental organizations, or multi-stakeholder initiatives?

Robust Internal Control Process

- Are the internal controls established according to professionally recognized objective audit standards?

- Does the U.S. importer have sufficient internal controls in place to effectively deter and detect instances of noncompliance with the code of conduct and other best practices?

- Does the U.S. importer conduct periodic compliance audits using in-house personnel or external audit professionals?

- Does the U.S. importer’s internal control process cover every level of the product supply chain including relevant business documents?

- Does the U.S. importer have adequate corrective action plans to address noncompliance and deter weak business practices?

For more information, please contact Nicole Bivens Collinson at (212) 730-4956.

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