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CBP Issues Withhold Release Orders On Certain Imports Made By Forced Labor From China

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CBP Issues Withhold Release Orders On Certain Imports Made By Forced Labor From China

US Customs and Border Protection has provided details on recent changes to the law that prohibits imports made of convict, forced, or indentured labor. The Trade Facilitation and Enforcement Act of 2015 repealed the “consumptive demand” exemption to the ban on imports made by “forced labor.” The repeal became effective on March 10, 2016. 
 
Prior to the changes, there had been an exemption to the ban if goods were not mined, produced or manufactured in such quantities in the United States as to meet the consumptive demands of the United States.
 
Customs has already stopped shipments of soda ash, calcium chloride, caustic soda, and viscose/rayon fiber from Tangshan Sanyou Group and its subsidiaries and shipments of potassium, potassium hydroxide, potassium nitrate from Tangshan Sunfar Silicon Industries in withhold release orders issued March 29, 2016. On April 13, 2016, Customs issued a withhold release order against imported potassium, potassium hydroxide, and potassium nitrate manufactured or mined by Tangshan Sunfar Silicon Company, a.k.a. Tangshan SunFar Silicon Industries Co. Ltd. in China.  

The orders will require detention at all US ports of entry of any such merchandise manufactured by these companies. These withhold release orders were the first orders issued in over a decade related to forced labor.  Withhold release orders are typically issued against types of goods and specific producers from specific countries.
 
There are reports of other petitions being filed. Additionally, Customs reports that the statutory changes will lead to expedited processing of petitions alleging goods were produced using forced labor. 
 
As a result, many companies are undertaking a review of vendor practices in their supply chain.

Background

Section 307 of the Tariff Act of 1930 (19 U.S.C. § 1307) prohibits the importation of merchandise mined, produced or manufactured, wholly or in part, in any foreign country by forced labor – including forced child labor. Such merchandise is subject to exclusion and/or seizure, and may lead to criminal investigation of the importer(s).
 
When information reasonably but not conclusively indicates that subject merchandise is being imported, Customs may issue withhold release orders pursuant to 19 C.F.R. § 12.42(e). If the Commissioner is provided with information sufficient to make a determination that the goods in question are subject to the provisions of 19 U.S.C. § 1307, the Commissioner will publish a formal finding in the Customs Bulletin and in the Federal Register.

Further Information

Other information on the ban and withhold release orders in effect are on the Customs website, including how to file a petition. 
 
The International Trade and Corporate Social Responsibility (CSR) teams are monitoring developments on the withhold release orders and will provide future updates.

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