CBP Issues Broad Cotton Ban for China

Tweet

Dec. 12, 2020

On Dec. 2, 2020, the U.S. Department of Homeland Security announced its sixth enforcement action in the past three months against goods allegedly made by forced labor from China’s Xinjiang Uyghur Autonomous Region. We recently reported on the increased WRO actions related to forced labor from China. Of the 13 WROs issued during Fiscal Year 2020, eight target goods alleged to have been made by forced labor in China. All WROs are publicly available and listed by country on the CBP’s Forced Labor Withhold Release Orders and Findings page.

The latest WRO covers cotton and cotton products originating from the Xinjiang Production and Construction Corps (XPCC) and is issued based on information that “reasonably indicates the use of forced labor, including convict labor.” The WRO applies to all cotton and cotton products produced by XPCC and its subordinate and affiliated entities, as well as any products that are made in whole or in part with or derived from that cotton – such as apparel, garments, and textiles. A list of the other five WROs covering various products from the Xinjiang region can be found here.

The enforcement actions come under the authority of 19 U.S.C. 1307, which make it illegal to enter articles into the United States that were produced with forced labor and/or indentured labor under penal sanctions (i.e., prison labor). Much of the current conversation regarding the forced labor statute concerns China and its treatment of minority populations. China rejects many of the claims. However, as we reported earlier in November 2020, in the U.S. there is strong bipartisan support for increased enforcement under 19 U.S.C. 1307.

Democratic leaders in the Ways and Means Committee addressed the most recent WRO, calling the action a step in the right direction. However, those same leaders consider the WRO actions to be limited in their ability to address China’s forced labor issues. Rather, those Democratic leaders would like to see a more comprehensive response to the human rights issue, calling for the passage of the Uyghur Forced Labor Prevention Act, which passed the House 406-3 in September and which is currently up for vote in the Senate. If passed, the Act would enact a general ban on all goods manufactured in the Xinjiang region from entry to the U.S.

Whether the larger forced labor bill passes into law or not, the increased enforcement action through WROs signifies that this will remain an important and visible issue to CBP in any case. We encourage importers to take steps to ensure compliance with the law. As a refresher, at a minimum, this includes:

●        Understanding the International Labor Organization’s indicators of forced labor;

●        Understanding due diligence to identify forced labor, prison labor and child labor;

●        Securing commitments from suppliers that they do not use forced labor, prison labor, or child labor;

●        Including those commitments as conditions in purchase orders and contracts;

●        Subjecting suppliers to on-site audits (there are several third parties that perform this service); and

●        Taking immediate remedial action whenever the presence of forced labor is indicated.

If you have questions or concerns about forced labor in your supply chain contact any attorney at Barnes, Richardson & Colburn for assistance.