Companies in all industries are being encouraged to conduct reviews of their supply chains as international scrutiny on the use of forced labor has been intensifying. U.S. law prohibits the importation of goods mined, produced or manufactured, wholly or in part, in any foreign country by forced labor, including convict, indentured, and forced child labor.
Enforcement of the prohibition is on the rise, which includes Withhold Release Orders (WRO) and shipment detentions. It is no longer sufficient for importers and shippers to know the conditions of manufacturers only back to their suppliers; they need to have complete supply chain transparency to the point of extraction, growth, or original input of creation. Importers in all industries should conduct full reviews of their supply chains and should take steps to ensure compliance to manage the risk of their shipments being detained by US Customs.
This issue has the attention of the United Nations Human Rights Council who has received information and sent letters of concern to international companies that China may be involved in alleged forced labor, arbitrary detention, and trafficking within and outside China’s Xinjiang Uyghur Autonomous Region. Workers are predominantly employed in low-skilled labor-intensive industries such as agribusiness, textiles, apparel, automotive, and technology. Outsourcing of fabric, parts, etc. from these Chinese factories is occurring and can affect the completed product as it would subject the commodity to being detained and issued a WRO by the U.S. Customs & Border Protection (CBP).
Factories in China, including in Xinjiang, are not allowing free access in order to exercise adequate oversight. U.S. lawmakers are looking into allocating $25 million of additional funds directly to CBP to continue enforcement activities to exclude illegal commodities arriving directly and indirectly from China. Outsourced materials made into a completed product can and are being held.
CBP has published recent forced labor statistics on its website (www.CBP.gov) between Oct 1, 2020 and March 31, 2021. There were 371 shipments detained with only 4 release orders issued.
Source of information includes: Sandler, Travis & Rosenberg
Please contact your Western Overseas representative if you have any questions.