A Guide to Forced Labor Compliance: Understanding Your Responsibilities

    Forced labor compliance has become significantly more challenging in the last year as U.S. Customs and Border Protection (CBP) increased efforts to minimize forced labor through the enforcement of the Uyghur Forced Labor Prevention Act (UFLPA) of 2021.

    On June 21, 2023, CBP passed the one-year mark of the implementation of UFLPA, which “establishes a rebuttable presumption that any goods produced wholly or in part in China’s Xinjiang Uyghur Autonomous Region (XUAR), or by certain entities, are prohibited from importation into the U.S. under 19 U.S.C. 1307.” This is a significant expansion of the forced labor laws and affects importers and commodities shipped to the United States.

    Since implementation in 2022, CBP detained 5,059 shipments valued at $1.746M (USD). Of these shipments, 1,733 were denied and 2,070 were released. The top countries of origin for the shipments detained were Malaysia, Vietnam, and China with the top industries covering electronics, apparel, footwear, textiles, industrial, manufacturing materials, among others. CBP released a new interactive UFLPA statistics dashboard that provides additional details.

    With forced labor issues being under such scrutiny, importers must understand their responsibilities when it comes to vetting suppliers for forced labor to avoid potential penalties and additional expenses for non-compliance.

    Forced labor is when a product is mined, produced, or manufactured, in a municipality that has unlawful labor practices such as slave labor or child labor.

    The International Labor Organization (ILO) identified common signs that could indicate forced labor:

    • Isolation
    • Deception
    • Debt bondage
    • Excessive overtime
    • Withholding of wages
    • Abuse of vulnerability
    • Intimidation and threats
    • Restriction of movement
    • Physical and sexual violence
    • Retention of identity documents
    • Abusive working and living conditions

    Beyond, UFLPA, which is specific to China, if any part of your imported goods from any country of origin were subject to forced labor, anywhere throughout your supply chain, your goods could be detained or seized with a Withhold Release Order (WRO) or as a Finding. Following CBP FY2023, through June there were 3,455 shipments stopped for enforcement actions or reviews related to WROs and Findings and 5 penalties issued.

    Shipments are identified by CBP based on a variety of indicators, including commodity type, origin of goods, manufacturer name, and their postal code. View the CBP’s active target list of products and countries they target on their website.

    What are Withhold Release Orders (WROs)?

    A WRO is issued against a foreign manufacturer by CBP when they have a reasonable suspicion of forced labor being used to produce the imported product. Currently, there are 52 WROs issued against foreign manufacturers across a variety of products. In 2023, there was 1 new WRO issued.

    If the product imported has a WRO issued against the manufacturer, the importer has two options—re-export the freight or contest the findings. The importer has 90 days to do so before CBP seizes the cargo.

    To contest the WRO, the importer must prove the cargo in question was not made with forced labor. Accordingly, sufficient evidence is needed to prove admissibility of the product from the manufacturer for a specific shipment. For admissibility, an importer has three months to demonstrate that detained merchandise was not produced with forced labor.

    The importer must also demonstrate that the supplier is not included or related to the WRO. Supporting documentation should be submitted in a clear and concise manner so CBP can quickly and easily review it.

    Understanding Finding actions

    Additionally, a foreign manufacturer can have a Finding action issued against them. This occurs when CBP determines there is probable cause that forced labor was used in the manufacturing of the specific imported good.

    Upon arrival into the United States, the cargo is subject to seizure by CBP and treated as an importation prohibited by 19 U.S.C. 1307. There is no opportunity to export the goods under a Finding. The importer has 30 days to establish satisfactory evidence that the merchandise is admissible to CBP.

    With the implementation of UFLPA, CBP provided resources for the importing trade community to assist in monitoring risk of forced labor in supply chains. These resources included the UFLPA Entity List, UFLPA Region Alert, and CBP Operational Guidance for Importers.

    1. UFLPA Entity List

    CBP provides the names of entities in Xingang that mine, produce, or manufacture wholly or in part any goods, wares, articles and merchandise with forced labor on the UFLPA Entity List on their website with the effective date they were added to the list.

    As required by Congress, the Forced Labor Enforcement Task Force (FLETF) recently updated their annual report with updates to the Entity List and resources. This resource also highlights high priority sectors and the UFLPA enforcement plan around those sectors. See the full updates in the July 26, 2023 Homeland Security Report to Congress.

    2. UFPLA Region Alert

    In December 2022 CBP increased enforcement of UFLPA by targeting manufacturers specific to the XUAR region by requiring their postal code at the time of entry to the United States. The “UFPLA Region Alert” provides for “the notification to importers and their representative of goods that may have been produced in the Xinjiang Uyghur Autonomous Region (Xinjiang or XUAR) and may be excluded from importation into the United States.”

    3. CBP Operational Guidance for Importers

    This guidance document explains the importation process and enforcement of UFLPA, how to request an exception to the Rebuttable Presumption, and the type and nature of information that may be required by CBP.

    CBP will issue a  Notice of Detention, exclusion notice, or seizure notice to the importer of record if cargo is being held for forced labor or UFLPA. Then, the importer has 30 days to request an exception to the UFLPA rebuttable presumption and provide clear and convincing evidence that the goods were not mined, produced, or manufactured, wholly or in part by forced labor, produced in the Xinjiang region, or by a supplier on the Entity list. There is an option for the importer to request an extension up to 90 days that must be approved by CBP. For an exclusion notice or seizure notice, the importer will have to follow the CBP administrative protest process or petition process as outlined in the regulations. For more specific guidance review the UFLPA Operational Guidance for Importers.

    Importers should carefully review CBP’s importer guidance, Sample Table of Contents, and Best Practices for Applicability Reviews. CBP expects the importer to provide documentation in an orderly and easily understood fashion for CBP to review.

    For the importer to avoid storage, demurrage, and detention charges at the port of entry and by the carrier, a request must be made to CBP at the port of entry requesting approval for detained shipments to be moved to a customs bonded facility at the port of entry until the admissibility review and determination is complete. The movement of goods to a foreign trade zone (FTZ) is not permitted by CBP.

    Forced labor compliance is not just a U.S. law. Other countries, including Canada, Australia, United Kingdom, and the European Union, are increasingly changing laws to combat forced labor as well.

    Remaining compliant helps avoid detained or seized cargo, penalties, and fees. Start by understanding your role and responsibilities when it comes to forced labor laws. Use the steps below to better prepare your business:

    1. Organize and educate your internal team

    Secure expertise from various areas of your business, including customs and compliance, legal, procurement, security, and logistics, among others. Review your code of ethics, purchase orders, and contracts to ensure they require suppliers to comply with forced labor laws. Use all available resources to educate your team and your suppliers. Depending on your commodities and the complexity of your supply chain, you may also want to consult trade counsel with experience in your field.

    2. Audit your supply chain suppliers and manufacturers

    Develop a questionnaire based on the ILO forced labor indicators and outline the process for how your product is produced. If you catch any red flags through this process, discuss with your supplier how they will rectify the situation. You can also utilize the U.S. Department of Labor’s Comply Chain website. Ensure you have a full record of the manufacturers you are shipping from by reviewing your Automated Commercial Environment (ACE) data.

    To identify companies operating in the Uyghur Region, Sheffield Hallam University offers a free database you can download. Compare your supplier and sub-supplier list against this reference to gauge your risk.

    3. Conduct a supply chain tracing or mapping exercise

    Better understand your supply chain risks for forced labor by conducting a supply chain tracing exercise. This requires tracing all the parties and inputs in your supply chain—from origin to distribution. Start by listing the entities involved in each step of the production of goods. The CBP Operational Guidance for Importers document includes examples of what this may look like for an importer supply chain.

    To identify companies operating in the Uyghur Region, Sheffield Hallam University offers a free database you can download. Compare all entities identified in your supply chain against this reference to gauge your risk.

    4. Utilize technology to assist in supply chain tracing

    In March 2023, CBP hosted a forced labor technical day to assist the industry better understand how technology can boost supply chain transparency in the identification of goods produced using forced labor. Watch the training recordings and review speaker bios online.

    5. Construct a process for implementing and monitoring compliance

    Establish an ongoing routine to help maintain and monitor compliance. Review your imported commodities against the active WRO, Findings, and UFLPA Entity List.

    When a new manufacturer or product is established within your supply chain, ensure your implementation process and review includes forced labor compliance. Review the CBP UFLPA Operational Guidance for Importers for more detailed information on how to get started.

    If you do find that forced labor exists within your supply chain, you will want to take immediate, corrective actions to provide protections for the workers and eradicate the continued use of forced labor in your supply chain.

    6. Review Customs and Trade Partnership Against Terrorism (CTPAT) requirements

    If your organization is CTPAT certified, ensure you are up to date with documented procedures on forced labor compliance as dictated in the Minimum Security Criteria.

    One benefit for CTPAT trade compliance participants is importers can request an expedited review of the documentation with the CBP Center of Excellence assigned to the entry. For more information, review these resources:

    The CBP website has useful resources and information on forced labor, including:

    Now is the time to ensure forced labor compliance

    Make changes as needed proactively to mitigate your potential risk and avoid penalties from forced labor.

    As international trade topics continues to shift, stay up to date with timely Trade & Tariff Insights updates.


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