Industry News

CBP Clarifies its Approach to Xinjiang WRO

Feb. 16, 2021
By: Navpreet K. Moonga

Following the issuance of a Withhold Release Order (WRO) relating to products produced in the Xinjiang Uyghur Autonomous Region, CBP has published responses to frequently asked questions (FAQs) on the matter. These FAQs provide more detail regarding CBP’s approach to monitoring and administering the WRO.

As previously reported, on January 13, 2021 CBP issued a WRO relating to cotton and tomato products using forced labor in the Xinjiang Uyghur Autonomous Region. Given the large number of cotton products being imported from China, CBP is faced with the challenge of determining which goods contain any cotton from the Xinjiang region. Recognizing this challenge, CBP’s Executive Assistant Commissioner (Office of Trade), Brenda B. Smith, commented at a Washington International Trade Association event that CBP intends to focus on “direct business connections” with companies in the Xinjiang region for its analysis.

Since Smith’s comments and in support, CBP released FAQs on February 12, 2021. The FAQs provide more information about the scope of the WRO, proof of admissibility, best practices, and combined products contained in the same shipment consignment. Regarding scope, CBP clarifies that the WRO includes “downstream products produced outside the {Xinjiang Uyghur Autonomous Region} that incorporate these inputs.”

In accordance with 19 C.F.R. § 12.43, importers are afforded the opportunity to provide proof of admissibility stating that the imported merchandise was not produced with forced labor. The statute requires importers to submit the “Certificate of Origin signed by the foreign seller” and “a detailed statement from the importer.” CBP also states that if proof of admissibility is not provided within three-months, or if the information provided is lacking, the merchandise will not enter the United States.

CBP has provided a non-exhaustive list of additional documentation to be included from importers for goods that have been detained. For cotton products, an affidavit from the yarn producer and source of raw cotton identifying where the raw cotton was sourced; the purchase order, invoice, and proof of payment; production steps and records; and employment and labor records. For tomato products, an affidavit from the tomato processing facility identifying the parent company and estate that sourced the tomato seeds and/or tomatoes; the purchase order, invoice, and proof payment from the processing facility; and production steps and records.

Further, CBP recommends review of the following resources to ensure best practices and due diligence in identifying the risks of forced labor in global supply chains:

In the year ahead WRO enforcement actions will remain an important supply chain and compliance issue. With that in mind, we encourage importers to take steps to ensure compliance with the law. 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 any questions or concerns about any WRO or forced labor in your supply chain, contact any attorney at Barnes, Richardson & Colburn LLP for assistance and more information.