Background

Following the issuance of an import detention order on all cotton products from China’s Xinjiang Uyghur Autonomous Region due to concerns about the use of forced labor there, five U.S. trade associations are calling on Congress to take specific steps to ensure effective enforcement of this order.

In issuing its withhold release order, U.S. Customs and Border Protection said importers are responsible for ensuring that 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. However, a Jan. 27 letter to congressional leaders from the trade associations said “we cannot rely upon U.S. corporate supply chains alone to stop forced labor at its source.” As a result, the letter urges Congress to incorporate the following principles into any efforts to address forced labor so as to achieve “clear, implementable, and enforceable” actions, including by CBP.

Risk-Based Enforcement. CBP enforcement of existing forced labor laws should be preceded by a strategy that prioritizes high-risk companies, products, regions, and countries. This approach would focus enforcement on the worst actors first, establish a clear and escalating enforcement timetable, give companies the necessary time to shift sourcing, and provide some predictability and certainty to affected stakeholders.

Clear Standards. The letter urges (1) a clear and transparent process, based on clear evidentiary standards, for issuing a WRO, (2) criteria for what kind of evidence importers must furnish to meet a “clear and convincing evidence” standard (e.g., status as a CBP trusted trader or a robust verification or audit program), (3) a more fulsome definition of “clear and convincing evidence” through rulemaking, and (4) public sharing of evidence that leads to WROs and enforcement actions taken under WROs.

Disclosure. The California Transparency in Supply Chains Act should become a national standard, with the same requirements, including posting disclosures in prominent location on a public-facing website. This would give U.S. law a global impact as it would apply to any company selling in the U.S., no matter where it is domiciled.

Supply Chain Tracing. The letter urges Congress to (1) require CBP to share what it learns from a pending demonstration of a private company’s ability to identify the origin of finished cotton products entering the U.S., (2) require CBP to launch a pilot program with importers using supply chain tracing tools to determine reliability, scalability, cost constraints, and appropriate risk tolerance, (3) provide the Department of Labor with additional funding to support technical assistance projects to improve the tracing of goods made with forced labor, and (4) endorse and fund a “forced-labor free” supplier certification process that would serve as proof of due diligence and admissibility of covered products.

For more information on how to avoid forced labor in your supply chain, please contact Elise Shibles or Nicole Bivens Collinson.

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