A recent ruling by U.S. Customs and Border Protection suggests that the agency may be broadening the scope of its enforcement of the prohibition on imports made with forced labor or at least imposing a higher standard of evidence for releasing shipments suspected of violating that prohibition.
19 USC 1307 prohibits imports of all goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in any foreign country by convict labor and/or forced labor and/or indentured labor under penal sanctions. CBP regulations allow the agency to issue a withhold release order providing for the detention of imported goods for which it has information reasonably indicating that the goods are in violation of 19 USC 1307. Under those regulations importers may obtain the release of such goods if they can establish by satisfactory evidence that the goods were not mined, produced, or manufactured in any part with the use of prohibited labor.
In January 2021 CBP issued a WRO requiring the detention of all cotton and tomatoes and their downstream products produced in whole or in part in China’s Xinjiang Uyghur Autonomous Region, including downstream products produced outside the XUAR that incorporate such inputs. That WRO was issued after CBP found a reasonable indication that there was forced labor present in the supply chains of such products.
CBP recently issued a ruling (HQ H330077) involving pullovers listed as being imported from Cambodia that were detained by CBP under suspicion that they were in violation of this WRO. The importer subsequently requested release of the goods after providing certificates of origin, sales contracts, commercial invoices, proof of payment, supply certificates, transaction certificates, maps, and graphs showing that the raw cotton used in the pullovers was produced in India, processed into yarn and subsequently fabric in China outside the XUAR, and converted to clothing in Cambodia.
CBP concluded that this evidence was insufficient “to establish either that the goods were not produced, wholly or in part, with forced labor or, in the alternative, that their supply chain is not linked with the XUAR,” which ostensibly would show that the goods are not subject to the WRO. In particular, CBP said it had internal documents showing that one of the companies in that supply chain is linked with the XUAR (though further information was redacted from the ruling).
However, Elise Shibles, head of ST&R’s Forced Labor Practice, pointed out that the neither 19 USC 1307 nor CBP’s implementing regulations prohibit imports of goods where an entity in the supply chain might be linked with someone else but that entity did not contribute to the manufacturing of the imported goods. Shibles said CBP’s ruling thus raises the question of whether CBP is broadening the scope of its enforcement of the forced labor prohibition beyond what may be permissible. Alternatively, she added, it could indicate that CBP is demanding a higher standard of evidence to prove imports are not subject to this prohibition that could be challenging for importers to meet.
Sandler, Travis & Rosenberg has a robust program to assist companies on forced labor issues, including modifying or revoking WROs or findings. 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. For more information, please contact ST&R at firstname.lastname@example.org.
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