Industry News

Withhold Release Order Lifted After Successfully Eliminating Forced Labor from Supply Chain

Apr. 28, 2023
By: Ashley J. Bodden

Another company has just shown that there is still light at the end of the tunnel after getting issued a Withhold Release Order (WRO). Yesterday, U.S. Customs and Border Protection (CBP) modified import restrictions issued in a WRO against a group of companies jointly known as Smart Glove. This is the third WRO modification issued by CBP this year.

In November 2021, CBP issued a WRO against a group of companies including Smart Glove Corporation Sdn Bhd, that produced disposable gloves in Malaysia, based on information that indicated that their production facilities utilized forced labor. Since that time, CBP states that Smart Glove has taken numerous actions to address the indicators of forced labor. Its remediation efforts included repayment of recruitment fees, improvements to living conditions, and implementation of new worker-centered policies and procedures. As a result, CBP determined that Smart Glove’s disposable gloves are no longer being produced using forced labor and as such the WRO was modified and shipments of Smart Glove’s goods received on or after April 26, 2023, will no longer be detained at U.S. ports of entry.

U.S. Secretary of Homeland Security Alejandro N. Mayorkas stated that, “the Department of Homeland Security’s relentless enforcements efforts to prevent goods produced with forced labor from entering the United States are changing companies’ behavior, resulting in the elimination of forced labor from supply chains.” Mayorkas believes this is evident by yesterday’s modification of the WRO against Smart Glove because it is driving responsible corporate citizenship and significant changes to corporate behavior. CBP Acting Commissioner Troy Miller also stated that he has seen a shift in behavior from importers and businesses so they can do business in the U.S.

Although CBP has established a process in which interested parties may request the modification or revocation of a WRO or Finding, to prevent WROs altogether, importers and businesses should ensure that their goods are not produced by forced labor. Importers and business should also take steps to ensure compliance, this includes taking immediate remedial action whenever the presence of forced labor is indicated; securing commitments from suppliers that they do not use forced labor, prison labor, or child labor; get commitments as to the conditions in purchase orders and contracts.

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.