CBP Provides Updated Guidance for Hoshine Withhold Release Order

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Mar. 15, 2022

On March 1, 2022, CBP issued an updated guidance document for the Hoshine Withhold Release Order (WRO). The agency introduced the new material by saying it will provide the trade community with contact information for admissibility package guidance, tips for admissibility package submissions, processing expectations after initial supply chain verification, and advance rulings.

The Hoshine WRO was issued June 24, 2021, against Hoshine Silicon Industry Co. Ltd., a company located in China’s Xinjiang Uyghur Autonomous Region. The Withhold Release Order instructs personnel at all U.S. ports of entry to detain shipments containing silica-based products made by Hoshine and its subsidiaries. This WRO was issued following an investigation into silica-based products imported into the United States from the Xinjiang region. During the investigation, CBP identified two of the International Labour Organization’s indicators of forced labor in Hoshine’s production process: intimidation and threats, and restriction of movement.

In the guidance CBP provides that most of the admissibility petitions for shipments being detained under the Hoshine WRO are processed by the Electronics Center of Excellence and Expertise. CBP directs stakeholders with Hoshine WRO questions to the FAQ or, if the question is not addressed by the FAQ, the Electronics Center mailbox at cee-electronics@cbp.dhs.gov.

In general, to contest a WRO detention, the importer must demonstrate admissibility by complying with CBP requests for information to show that the importers’ goods were not made with forced labor. This includes providing documentation produced in the ordinary course of business. CBP clarifies in the new guidance that documentation produced in the ordinary course of business, “includes full records of transactions and supply chain documentation to demonstrate all parties involved in the manufacture or export of a particular good, and the origin of the materials back to the suspected source of forced labor.” The agency goes on to give specific examples of the relevant documentation:

· Certificates of origin as specified in 19 CFR 12.43;

·         Purchase orders, invoices, and proof of payment;

·         Packing lists;

·         Payment records;

·         Bills of lading;

·         Shipping records;

·         Production records;

·         Inventory records supporting production;

·         List of production steps and chain of custody records for the imported merchandise;

·         Transportation documents;

·         Daily manufacturing process reports; and

·         Any other relevant information that the importer believes may show that the shipments are not in violation of 19 U.S.C. 1307.

Of course, the specific documents submitted will depend on the types of merchandise involved and the complexity of the supply chain. However, CBP makes it clear that they are looking for “a roadmap to easily navigate the documents and understand the production and importation story.”

CBP also addresses processing timelines and expectations. First the agency emphasizes the responsibility of importers are responsible for conducting due diligence and using “reasonable care” to provide any information necessary for CBP to determine admissibility. CBP states that complete admissibility petitions and cooperation of the importer will lead to prompt and efficient review of such petitions. CBP also explains that the Electronics Center and field audit teams are “developing expertise in solar supply chains” and as they “gain expertise in particular supply chains, review times for related petitions improve.”  That said, CBP promises that admissibility packages received for Hoshine-related detentions receive prompt attention and “Complete packages with all necessary documentation are currently being reviewed in as little as two to three weeks.”

CBP also explains in the guidance that importers seeking to vet a new supply chain may seek an advance ruling. Such a ruling would provide CBP an opportunity to evaluate a “prospective transaction” (a transaction not currently pending before a CBP official) for compliance with admissibility under 19 U.S.C. 1307. An advance ruling may then be applied to subsequent importations that are substantially similar to the specific facts as outlined in the ruling request. Unfortunately, CBP also states that despite a favorable ruling with respect to a prospective transaction, imports may nevertheless be detained to verify that the products and facts match those submitted in the advance ruling request. Although an importer can expect expedited processing. CBP also states that importers may expect enforcement of the WRO consistent with prior advance rulings for future shipments of products involving substantially identical facts, unless CBP has new information suggesting that the merchandise contains silica based products made by Hoshine or its subsidiaries.

The new guidance from CBP offers some significant information for importers at risk for a WRO detention of their merchandise, including important contact information and information about creating admissibility packets. Additionally, importers may want to explore the opportunity to get an advance ruling from the agency, even with the limited certainty these provide. If you have questions relating to creating an admissibility packet, getting an advance ruling, the Hoshine WRO or any WRO, do not hesitate to contact an attorney at Barnes, Richardson & Colburn LLP.