Background

U.S. Customs and Border Protection has issued a new withhold release order that, effective Sept. 30, requires the detention at all U.S. ports of entry of (1) palm oil produced in Malaysia by FGV Holdings Berhad and its subsidiaries and joint ventures and (2) any palm oil products or derivatives traceable to such palm oil. CBP states that palm oil is a common ingredient in products U.S. consumers encounter every day in grocery and convenience stores, including processed foods, cosmetics, pharmaceuticals, soap, and biodiesel.

According to CBP, this order was based on information that reasonably indicates the use of forced labor, including physical violence, intimidation and threats, debt bondage, withholding of wages, and abusive living and working conditions. An investigation also raised concerns that forced child labor is potentially being used in FGV’s palm oil production process. 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.

For more information on this or other WROs and how they may affect your business, please contact Nicole Bivens Collinson or Elise Shibles.

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 eliminated the consumptive demand clause, which allowed entry of certain forced labor-produced goods if they were not produced domestically in such quantities as to meet consumptive demands. 

When information reasonably but not conclusively indicates that goods within the purview of 19 USC 1307 are being imported, CBP may issue withhold release orders. CBP has said that it acts on information concerning specific manufacturers, exporters, and goods and does not generally target entire product lines or industries in problematic countries or regions. CBP also does not generally publicize specific detentions, re-exportations, exclusions, or seizures that may have resulted from its WROs or findings.

CBP encourages stakeholders 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. A list of all CBP WROs and findings is available here.

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