Background

Downstream products made outside China’s Xinjiang Uyghur Autonomous Region that incorporate cotton and tomato products produced in the XUAR may be detained upon entry into the U.S. under a withhold release order issued against the latter goods, according to information from U.S. Customs and Border Protection.

ST&R can assist importers facing these and other detentions. For more information, please contact Kristine PirniaElise Shibles, or Nicole Bivens Collinson.

Effective Jan. 13, the WRO requires the detention at all U.S. ports of entry of all cotton products and all tomato products grown or produced by entities operating in the XUAR, including apparel, textiles, tomato seeds, canned tomatoes, tomato sauce, and other goods made with cotton and tomatoes. This order was based on information reasonably indicating the use of detainee or prison labor and situations of forced labor in the XUAR.

FAQ on XUAR WRO 

CBP recently provided the following information concerning this WRO in a FAQ posted on its website.

Scope. The WRO was issued against cotton and tomatoes and their downstream products produced in whole or in part in the XUAR and includes downstream products produced outside the XUAR that incorporate these inputs.

The WRO applies to covered goods entered from a foreign-trade zone or warehouse on or after Jan. 13.

Detention. In response to a question on whether the order covers goods imported and/or received prior to Jan. 13, CBP said redelivery may be ordered on goods within the scope of the WRO. Demand for redelivery will generally be made no later than 30 days after the date the goods were released or the end of the conditional release period, whichever is later.

Importers of detained shipments will have an opportunity to export their shipments or submit proof that they were not produced with forced labor or are not covered by this WRO.

When goods subject to the WRO are only a portion of a shipment, the importer may file with the port of entry a request for a manipulation permit. Once the permit is granted the importer may choose to amend the entry to secure the release of the goods not subject to the WRO.

Proof of admissibility. Importers contending that detained goods were not produced with forced labor must submit the following to the port of entry where the shipment is detained: (1) a certificate of origin, in the format detailed in 12 CFR 12.43(a) (i.e., a standard certificate of origin is not acceptable), signed by the foreign seller, and (2) a detailed statement (as outlined in 12 CFR 12.43(b)) submitted by the importer, not the seller, that is sufficiently detailed and includes proof that the goods were not produced in whole or in part with forced labor.

Supporting documentation should trace the supply chain from point of origin of the cotton or tomatoes, to the production and processing of downstream products, to the goods imported into the U.S.

For cotton products, detention notices will request the following types of documentation (although others may be required as well).

- affidavit from yarn producer and the source of raw cotton that identifies where the raw cotton was sourced

- purchase order, invoice, and proof of payment for the yarn and raw cotton

- list of production steps and production record for the yarn, including records that identify the cotton and cotton producer of the raw cotton

- transportation documents from cotton grower to yarn maker

- supporting documents related to employees that picked the cotton, time cards or the like, wage payment receipts, and daily process reports that relate to the raw cotton sold to the yarn producer

For tomato products, detention notices will request the following types of information (although others may be required as well).

- supply chain traceability documents pointing to the point of origin of the tomato seeds, tomatoes, or tomato products

- affidavit from the tomato processing facility that identifies both the parent company and the estate that sourced the tomato seeds and or tomatoes

- purchase order, invoice, and proof of payment for the tomato seeds, tomatoes, or tomato products, from the processing facility and the estate that sourced the raw materials

- all production records for the tomato seeds, tomatoes, and/or tomato products that identify all steps, from seed to finished product, from the farm to shipping to the U.S.

Due diligence. If they do not have a direct relationship with the upstream suppliers or manufacturers, importers can ensure due diligence by having a comprehensive and transparent social compliance system in place. CBP’s informed compliance publication on reasonable care includes a section on forced labor. The Department of Labor’s website provides guidance on setting up a social compliance system.

CBP also recommends that the trade community use the following resources to better understand and address the risks of forced labor in global supply chains: the DOL’s Comply Chain App, the Department of State’s Trafficking in Persons Report, and the July 2020 Xinjiang business advisory. In addition, the CBP website has information on responsible business practices on forced labor.

CBP emphasizes that importers are responsible for ensuring the products they are attempting to import do not exploit forced labor at any point in their supply chains, including the production or harvesting of the raw material. 

Copyright © 2021 Sandler, Travis & Rosenberg, P.A.; WorldTrade Interactive, Inc. All rights reserved.

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