Background

Certain imported palm oil products of Malaysian raw materials could be seized and forfeited following a new finding that such goods are being made with forced labor. This finding also opens the door to potential criminal charges against companies that continue to source subject goods for other markets.

U.S. Customs and Border Protection has authorized port directors to seize and commence forfeiture proceedings against the following products unless the importer establishes by satisfactory evidence that they were not produced in any part with the use of forced labor.

- palm oil and derivative products made wholly or in part with palm oil that are manufactured or produced in whole or in part with the use of convict, forced, or indentured labor by the Malaysian company Sime Darby Plantation Berhad and its subsidiaries and joint ventures (subject goods classified under HTSUS 1207.10.0000, 1511.10.0000, 1511.90.0000, 1513.21.0000, 1513.29.0000, 3401.20.0000, 3401.19.0000, 3823.12.0000, 3823.19.2000, 3823.70.6000, 3823.70.4000, 3824.99.41, and any other relevant subheadings in HTSUS Chapters 12, 15, 23, 29 and 38)

CBP has determined that there is sufficient information to support a finding that Sime Darby and its subsidiaries are using forced labor to produce these goods on plantations in Malaysia and that such goods are likely being imported into the U.S.

The authorization for seizures and forfeiture applies to subject goods that (1) are imported on or after Jan. 28 or (2) have already been imported but were not released from CBP custody before Jan. 28. Once seized, subject goods may not be exported from the U.S.

It is important to note that not only palm oil but also derivative products made in whole or in part from such palm oil may be subject to seizure or forfeiture. Products commonly containing palm oil include cereals, baked goods, chocolate, coffee creamers, margarine, cosmetics, methyl ester and hydrodeoxygenated biodiesel, glycerin, mono- and diglycerides, propylene glycol, tocopherols, and palmitate, among others.

In addition, U.S. companies or foreign companies with U.S. operations that source subject goods from Sime Darby for other use and import into other markets while knowing or recklessly disregarding that such goods are made with forced labor could face prosecution in U.S. courts. Companies do not have to import products into the U.S. to be subject to such criminal charges.

Sandler, Travis & Rosenberg offers a comprehensive suite of services to help companies address forced labor concerns, including supply chain reviews, due diligence strategies, and proactive remediation. ST&R also maintains a frequently updated web page offering a broad range of information on forced labor-related efforts in the U.S. and around the world and offers an on-demand webinar on forced labor and supply chain transparency.

For more information, please contact ST&R.

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