Necessary Regulatory Changes on Forced Labor Still Unclear, CBP's Smith Says
Exactly what regulatory changes CBP will seek under the customs reauthorization law's forced labor provisions is still uncertain, Brenda Smith, CBP executive assistant commissioner for trade, said in a June 17 interview. At a minimum, CBP must change its regulations to reflect an effective close to the “consumptive demand” loophole (see 1604220017), but whatever else could be in any altered regulation is still an open question, she said. CBP is looking at a policy that’s “a little more flexible and nimble and can be responsive to a changing global environment,” and is holding several outreach sessions with the trade and labor communities at large “about what they need and how regulations could be helpful in ensuring that, as a country,” importation of forced labor goods is stopped, she said. There's some concern within the industry over potential new regulations for products made by forced labor (see 1605170017).
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While CBP has engaged with 30 different organizations -- ranging from companies to trade associations, to governmental organizations -- to stem the flow of goods made by forced labor, lawmakers would like to see more coordination on the issue, Smith said. Smith was one of several executive branch officials, including CBP Commissioner Gil Kerlikowske, in attendance at a June 14 meeting on child and forced labor goods hosted by Sens. Sherrod Brown, D-Ohio, and Ron Wyden, D-Ore., on Capitol Hill (see 1606150010). The senators convened the meeting, in part, to boost multiparty communication on the issue, Smith said. “I think since the passage of the customs [reauthorization] bill, we’ve had a lot of outreach from us to members of the labor community … as well as the private sector, that are looking to engage with us and understand what our expectations are,” Smith said.
Brown and Wyden also requested more transparency in the petitioning process for investigating suspected child or forced labor goods, Smith said. CBP’s ability to share information about case status “may be limited by current regulation and current law,” but she pledged that CBP would strive to be as transparent as possible going forward. CBP attendees at the Hill meeting agreed with Brown and Wyden to maintain an “ongoing partnership” on the issue. The senators didn't comment.
CBP's three withhold release orders issued since the law was enacted (see 1603310034 and 1605310019) have already resulted in cargo stoppages, Smith said. CBP continues to consider potential benefits for Customs-Trade Partnership Against Terrorism program members related to withhold release orders on goods suspected of forced labor production (see 1605310018), but is still in the initial stages of consideration, said Troy Riley, executive director of commercial targeting and enforcement at CBP. “That’s a good example of probably how policy would work, to give us additional flexibilities,” he said. Riley said one concept behind a C-TPAT-related benefit would be to seal off importers from any withhold release order.
E-commerce presents another challenge for stopping forced and child labor goods from entering supply chains as counterfeit goods, Smith said. “I think, really, a lot of what e-commerce is going to be about is making sure that the people who are playing in that particular set of supply chains understand what the law requires, and have the systems in place to be compliant,” she said. “In addition to us taking the enforcement actions, I think that we need to spend a good amount of time ensuring that our expectations are clear and that people have access to those expectations, that we’re pretty transparent and … we do outreach around what those expectations are.” Advance data is seen as a crucial part of the risk assessment process for developing a withhold release order, as well as tracking and interdicting child and forced labor goods, a CBP spokeswoman said after the interview. CBP is issuing withhold release orders on a “reasonable suspicion” threshold, which allows the agency to collect information from importers about the composition of their supply chains and how the goods are produced, Smith said.