U.S. Customs and Border Protection has launched an initiative to enforce laws broadening the existing ban on imports of goods made with forced labor. This effort is currently focused on gathering information from importers, but CBP retains the authority to detain shipments suspected of noncompliance. In addition, importers may be at risk for monetary and criminal penalties.

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. Effective March 1, 2016, the Trade Facilitation and Trade Enforcement Act closed a loophole in this law that had allowed imports of certain forced labor-produced goods if there was insufficient domestic production to meet consumptive demands. When information reasonably indicates that goods within the purview of 19 USC 1307 are being imported, CBP may issue withhold release orders requiring detention of those goods at all U.S. ports of entry (and has done so with respect to a handful of goods from China).

In a significant but little-noticed change, the Countering America’s Adversaries through Sanctions Act (H.R. 3364) created a presumption that “significant goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part by the labor of North Korean nationals or citizens” are forced labor goods in violation of 19 USC 1307 and prohibited from entry into the U.S. This provision could have a significant impact on imports from China, Russia, Mexico, Poland, and other countries in which North Koreans have been known to work, including in the apparel, seafood, and other industries.

This presumption may be rebutted for specific goods that CBP finds, by clear and convincing evidence, were not produced with convict, forced, or indentured labor under penal sanctions. However, whereas 19 USC 1307 requires the U.S. government to prove that goods are made with forced labor, CAATSA places the burden on importers to prove that they are not; i.e., that North Koreans were not involved in the production of their goods or, if they were, that they were not working as forced laborers.

CBP has begun sending importers requests for information about their efforts to ensure their supply chains are free from forced labor, including labor performed by North Koreans. Among other things, CBP is asking importers to provide information on their due diligence programs, contact information for manufacturers at all levels of their supply chains, and copies of any forced labor audits, including findings and recommendations.

According to ST&R member Marilyn-Joy Cerny, a U.S. Immigration and Customs Enforcement official said recently that importers may well need to change their approach to forced labor compliance because typical corporate social responsibility and supply chain due diligence processes will likely be insufficient to meet obligations under CAATSA.

ST&R professionals are ready to help companies respond to CBP inquiries, review their supply chains, and implement new compliance measures as needed. For more information, please contact Tom Travis at (305) 894-1001, Marilyn-Joy Cerny at (212) 549-0161, or Elise Shibles at (415) 986-1088 x 1403.

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