U.S. Customs and Border Protection officials announced Dec. 2 a new withhold release order that will require the detention at all U.S. ports of entry of (1) cotton and cotton products produced by China’s Xinjiang Production and Construction Corps and its subordinate and affiliated entities and (2) products made in whole or in part with, or derived from, such cotton (e.g., textiles and apparel), including those made in third countries.
CBP states that this order is based on information that reasonably indicates the use of forced labor, including convict labor, by XPCC. However, importers of detained shipments will have an opportunity to export their shipments or submit proof to CBP that they were not produced with forced labor or are not covered by this WRO.
CBP officials said this WRO should serve as another prompt to U.S. companies to closely examine their supply chains to ensure their 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. They pointed out that the U.S. government has issued other warnings regarding the use of forced labor in the Xinjiang Uighur Autonomous Region, including a July 2020 joint federal advisory warning U.S. businesses of forced labor in not only cotton but a number of other industries in the XUAR. CBP has also issued several other WROs over the past year targeting apparel made by specific companies in China.
Officials acknowledged that compliance with the WRO may be a challenge for U.S. importers but called on them to utilize their capabilities to audit their own supply chains toward this end. They added that CBP will continue to prosecute those that profit from the use of forced labor.
XPCC was previously placed on the Office of Foreign Assets Control’s Specially Designated Nationals List, which prohibits all U.S. entities or non-U.S. entities subject to U.S. jurisdiction from engaging, directly or indirectly, with XPCC and its majority-owned subsidiaries without a license from OFAC. Any transaction by a covered person that directly or indirectly benefits XPCC may be considered a violation of these sanctions, including apparel-related transactions made anywhere in the world that contain XPCC cotton.
For more information on the impact of this WRO and other measures against XPCC, or assistance in complying, please contact Kristine Pirnia, Elise Shibles, or Nicole Bivens Collinson.
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