Forced Labor Investigations Will Become More Common, Industry Expert Advises
The number of withhold release orders for goods that are allegedly made with forced labor has climbed sharply in the last five years, and Columbia Sportswear's director of global customs and trade said importers should expect that trend to accelerate. Katie Tangman, who was speaking May 20 during the online convention of the National Association of Foreign-Trade Zones, said traders should expect other countries to pass import bans on goods made from forced labor. While the U.S. is the only country with such a law at this point, Mexico and Canada will be passing bans as part of the U.S.-Mexico-Canada Agreement, she said, and pressure is building in the European Union to act, too.
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Tangman said that typically, a non-profit identifies problems with forced labor in one area, then newspapers pick up on the story, then politicians get involved, then CBP investigates. She noted that in March, Congress directed CBP to investigate goods made in Xinjian, the home province in China of Uighurs. A recent WRO applied to a company in that province (see 2005010040).
She also showed headlines about the trend of Uighur people who had been in re-education camps being sent hundreds or thousands of miles away to factories in other parts of China. Even when those workers are paid, the fact that they are sent against their will to other parts of the country means it's forced labor under U.S. law. “China’s in general a very sensitive issue for the U.S.,” she said. She said that CBP relies on input from the Bureau of International Labor Affairs (commonly known as ILAB), and that a few days earlier, ILAB said it's starting to list goods that have components made with forced labor, even if the final assembly was not compromised by forced labor.
With the global COVID-19 pandemic, importers' risk is increasing, she said, because there are supply chain changes, and companies you have worked with for years may be subcontracting because they don't have the capacity to produce what they planned.
Tangman said NAFTZ asked CBP for guidance back in February on how WROs affect goods that are in FTZs, and therefore, have not yet entered into commerce. If the inputs or goods that have been identified as made with forced labor entered the FTZ before the WRO was issued, is it OK for them to be sold? Can those goods stay in the FTZ for 90 days while a company is trying to prove that the goods should not be subject to a WRO? She said they have not received an answer to either question yet.