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Guilty Until Proven Innocent: Navigating the New Forced Labor Law

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Customs and Border Protection (CBP) will enforce a new law beginning on June 21, 2022—the Uyghur Forced Labor Prevention Act.

This law will require an importer to provide clear and convincing evidence that goods made in or made using raw materials sourced from the Xinjiang Uyghur Autonomous Region of China (XUAR) were not produced using forced labor. The onus is on the importer to convince CBP that the importer is not guilty. Yes, you read that correctly—prove you are innocent. Isn’t this contrary to all the basic tenants about American government we learned in middle school? In America you are innocent until proven guilty, right? Not in this case. Goods are prohibited from importation until CBP agrees that the evidence supplied proves the goods were not made using forced labor.

You might think that forced labor only pertains to inmates making things such as license plates for pennies on the dollar in prison. Forced labor includes any human that is compelled to work by means of force, fraud or coercion. Vulnerable populations are generally the targets—children, the poor, illegal immigrants, and/or refugees. Their employer binds them to work using lies, threats and/or false promises. The employee is not free to leave. The employee is deceived, may face physical abuse or threats of physical abuse, may have wages withheld, and may be restricted from leaving ‘rent free’ housing, or face excessive debt bondage. Forced labor includes much more than prisoners.

In the Uyghur region suppliers are exploiting forced labor, primarily Muslim minority groups held in internment camps and detention centers. It is a practice that goes back decades. Many nations have forced labor trade restrictions in place to combat human trafficking, modern slavery and sweatshop labor. The U.S. has targeted forced labor (originally called convict labor) since 1890. Any good made using forced labor is prohibited, not just goods coming from the Uyghur region. However only goods from XUAR are to be automatically denied entry under this new law.

Typical goods made, grown, or mined in this region are cotton and cotton products, tomatoes and tomato products and silica and silica-based products. To get a better sense of the scope of the products with current and prior Withhold Release Orders (WROs) you can look at CBP’s website at cbp.gov. All the WROs are listed by country. These are products where CBP is reasonably but not conclusively certain that goods coming from the listed factories or territory are made with forced labor. Once hit with a WRO, importers must demonstrate to CBP that their goods were not made with forced labor to have the products released.

The importer will have three months to demonstrate through clear and convincing evidence that the goods were not mined, produced, or manufactured wholly or in part from forced labor. CBP has not put forth a list of absolute records that provide this clear and convincing evidence but based on prior rulings the documentation needed is extensive. Things that should be included: solid chain of custody records, records of audits of the factory that produced the goods; employee records from that factory; photo identifications of all the factory employees including their nationalities; photos of the factory with the workers working.

But that’s not all. A complete list of production steps, and a bill of materials including the name and address of the manufacturer for all the raw materials that went into the imported item is also needed. If raw materials were harvested in the Xinjiang region, the growers’ names, when and who harvested the raw material, payment receipts to the grower or harvester also need to be provided. The importer may need to trace every component back to its source and supply CBP with the providers name and address. The document burden is expected to be so heavy that most will abandon imports hit with a WRO. The importer can choose to export the goods if the documentation burden is too high, but there are time limits. Failure to provide the clear and convincing evidence means CBP will seize the goods.

The time to delve into your imported items is now.

Do you know where the raw materials were sourced? Can you prove forced labor was not utilized? Have you written purchase orders with new verbiage specific to forced labor? Have you reviewed the expected actions an importer is to take to proactively manage the source of their imported items?

Don’t delay. Having a shipment held for months while the supporting documentation is reviewed, getting assistance from trade attorneys, tying up your staff’s limited resources—are all costly. Worse, CBP could seize the shipment if the provided documentation does not meet the clear and convincing evidence requirement. The good news is CBP has posted all sorts of helpful information on forced labor on its website.  And no later than June 21, 2022, CBP is to announce what documentary support is needed to prove the goods were not made using forced labor. Don’t wait, investigate now before being hit with an expensive surprise. Don’t be guilty until proven innocent.

Brenda Custer-Espeleta is a licensed custom broker and NCBFAA Certified Customs Specialist with over 30 years of experience in global trade. She is currently the EVP of customs and trade compliance at Alba Wheels Up International LLC.  Prior to joining Alba she was the VP of customs compliance at Flexport. She has worked for both large global logistics companies and smaller family-owned businesses. She is well versed in all aspects of customs regulations and foreign trade. 

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