What is Forced Labor?
Forced labor is defined under 19 U.S.C. § 1307 as “all work or service which is exacted from any person under the menace [threat] of any penalty for its non-performance and for which the worker does not offer himself voluntarily.” Forced Labor is the third most lucrative illicit trade, behind only drugs and weapons, and has an annual trade value of roughly $150 billion. Right now, over 40 million people around the world are victims of some type of forced labor, including modern slavery, human trafficking, child labor, etc.
Section 307 of the Tariff Act of 1930 (19 U.S.C. 1307) prohibits the importation of all goods and merchandise mined, produced, or manufactured wholly or in part in any foreign country by forced labor, convict labor, and/or indentured labor under penal sanctions, including forced child labor.
The United States was not always actively enforcing U.S. forced labor laws. Previously, under the “consumptive demand” clause in Section 307 of the Tariff Act of 1930, the U.S. effectively allowed the importation of goods that had been partially produced by forced labor. This is because the “consumptive demand” clause was an exception which allowed importation of certain forced labor-produced goods if the goods were not produced “in such quantities in the United States as to meet the consumptive demands of the United States.” Forced labor enforcement has significantly increased after the enactment of the Trade Facilitation and Trade Enforcement Act of 2015, which eliminated the “consumptive demand” clause.
CBP is responsible for preventing the entry of products made with forced labor into the U.S. market by investigating and acting upon allegations of forced labor in supply chains. CBP implements Section 307 of the Tariff Act of 1930 (19 U.S.C. 1307) through issuance of Withhold Release Orders (WRO) and findings to prevent merchandise produced in whole or in part in a foreign country using forced labor from being imported into the United States.
On June 21, 2022, the Uyghur Forced Labor Prevention Act (UFLPA) was enacted to further reinforce the United States’ prohibition against the importation of goods made with forced labor. The UFLPA establishes a rebuttable presumption that goods mined, produced, or manufactured wholly or in part in the Xinjiang Uyghur Autonomous Region of China or by an entity on the UFLPA Entity List are prohibited from importation into the United States under 19 U.S.C. § 1307. In many ways, the UFLPA heightened the standard for forced labor compliance in comparison to its predecessor / parallel enforcement system, Withhold Release Orders. However, if an Importer of Record can demonstrate by clear and convincing evidence that the goods in question were not produced wholly or in part by forced labor the Commissioner of CBP may grant an exception to the presumption.
For more information on the UFLPA:
- UFLPA Guidance: What Importers Need to Know
- Uyghur Forced Labor Prevention Act (UFLPA): What You Need to Know
- Bloomberg Law: U.S. Customs Targets the Use of Forced Labor
- CBP’s Forced Labor Process Flowchart
What Should You Do
In order to be able to demonstrate that you have used reasonable care with regards to forced labor, you must be able to answer these 12 questions.
Initial steps Diaz Trade Law will assist you in taking to comply with CBP’s forced labor requirements:
- Download the Sweat and Toil App
- Use the Department of Labor’s “Sweat & Toil” and “Comply Chain”free applications to assess your forced labor risk and create your company’s social compliance plan . You can review risk by product category and country.
- Create a Written Forced Labor Social Compliance Plan
- Include language on your purchase orders, contracts, and other shipping documents that emphasize compliance with forced labor.
- Start your Supply Chain profile
- Analyze your supply chain to gain an understanding of where your goods are made (including the raw materials).
- Internal Control Processes
- Assess your internal controls to ensure your procurement team no longer sources goods from Xinjiang.
Diaz Trade Law has significant experience in a broad range of import compliance matters including forced labor compliance and enforcement mitigation. For assistance in a broad range of forced labor compliance matters including developing or updating a forced labor compliance plan, forced labor compliance training, or communicating with CBP regarding goods detained by CBP, contact us today at [email protected].