Industry News

Senate Committee Takes Aim at Likely BMW and Jaguar Forced Labor Imports

May 20, 2024
By: Hannah B. Kreinik

Regular readers will remember that in February we reported that Volkswagen had some of its high end cars detained because of concerns about components made using forced labor. A recent report from the Senate Finance Committee alleges that the same component was also used in BMW and Jaguar Land Rover vehicles.

Importantly, the report asserts that both BMW and Jaguar Land Rover were informed by the supplier, in writing, of the origin of the components and their presence in their respective supply chains in January 2024. The committee report identified due diligence processes at both BMW and Jaguar Land Rover, including in-person meetings and automaker audits as well as questionnaires on the company’s supply tier transparency. Nevertheless, the report alleges that the components in question were still used in vehicles imported into the United States after the companies were notified by the supplier.

UFLPA was enacted in December 2021 with the rebuttable presumption that goods produced in the Xinjiang region of China are made wholly or in part with forced labor. In addition, the entity list for UFLPA is maintained by the Forced Labor Enforcement Task Force (“FLETF”). The entity list includes producers and companies that are suspected of using forced labor in their product’s supply chains. The entity list was recently updated with several cotton suppliers and continues to grow (see our report here). The supplier of these components was added to the entity list in December 2023.

This report demonstrates that building compliance processes is often easier than ensuring they function in practice. This is especially true when the consequences are serious. What is not clear is what action, if any, Customs will take with respect to these entries. However, in light of the very high interest shown by Congress, it seems likely that Customs will need to take some action. Unfortunately for BMW and Jaguar Land Rover, they may end up being the example to incentivize companies to ensure their due diligence processes work as intended.

UFLPA enforcement continues to intensify and direct knowledge of one’s suppliers has never been more vital. Barnes, Richardson & Colburn attorneys are here to help keep your supply chains clear of forced labor.