Permanent link for Updates on Forced Labor Provisions in 2023 on April 17, 2023

Forced labor has been a huge issue that U.S. Customs and other government agencies have been attempting to crack down on as of late 2021, the majority of 2022, and continued efforts going into 2023.

By the Congressional Research Service definition, forced labor is considered to be “all work or service which is exacted from any person under the menace of any penalty for its nonperformance and for which the worker does not offer himself voluntarily.”

Introduction to Section 307

Section 307 under the Tariff Act of 1930 prohibits the importation of any products that were created using forced labor.

Here is how Section 307 was put into effect:

1. Receipt of allegation or self-initiation
2. CBP Commissioner initiated CBP an investigation.
3. CBP Commissioner issues a Withhold Release Order (WRO)
4. Importer may export merchandise or contest the WRO
5. Any final readings are published in the Federal Register
6. CBP seizes non exported merchandise and commences forfeiture proceedings

Reporting Standards

With these actions in mind, reports that are made to the Commissioner of U.S. Customs and Border Protection (CBP) cannot be unwarranted; there are certain standards for reporting that must be met.

These standards include “any individual that has reason to believe that any class of merchandise that is being, or is likely to be, imported into the United States is being produced by Forced Labor” have a valid argument to file a claim. In accordance with 19 CFR 12.42, Port Directors and other Principal Customs Officers are mandated reporters and if someone not in this role has concerns, they may share with the Port Director or online.

Investigation Standards

Investigations regarding these reports under Section 307 also have a set of standards laid out.

These include statements regarding how an investigation is initiated “as appears warranted by the amount and reliability of the submitted information” and a Commissioner of CBP must find that the information “reasonably but not conclusively indicates that imports may be the product of forced labor” to release a WRO to the related items.

Contesting a WRO

If a company has the unfortunate luck of receiving a WRO, not all is lost– it is possible to contest a WRO with a set of procedures that were posted by the Congressional Research Service.

Here are the general guidelines for contesting a WRO:

1. Importer has three months to contest the WRO
2. The importer must demonstrate that “every reasonable effort” was made to show the source and type of labor used to produce an item and its parts.
3. If WRO is not successfully contested or is not exported from the US, CBP will seize and destroy the afflicted items 
4. CBP will then publish the date, type of merchandise, manufacturer, and status of WRO
   1. However, CBP will not post specific detentions, re-exportations, exclusions, or seizures

Forced Labor Enforcement Advancements

Though Section 307 has been around for a number of years now, advancements in the area of forced labor enforcement have increased as of recently.

During January 2022, U.S. Trade Representative (USTR) announced the development of “first-ever focused trade strategy to combat forced labor.”

This plan entails a series of partnerships of government organizations with non-government organizations (NGO’s) and civil society organizations (CSO’s).

More specifically, the Department of Homeland Security (DCS), with the aid of the NGO’s and CSO’s, will also launch supply chain criminal investigations– the first ever of its kind. The main purpose of these criminal investigations is to help identify and shut down human trafficking efforts, charge those who are directly responsible, and protect the victims of these acts.

External Applications - Combating Illegal Fishing

Surprisingly, a big sector with ongoing forced labor issues has been the live fishing industry.

A new presidential directive has led to search and investigation of fishery supply chains that are suspected of using forced labor and contributing to human trafficking in response to this growing issue.

As permitted by the new directive U.S. Customs & Border Protection are instructed to:

1. Investigate fishing vessels and operators suspected to be harvesting seafood with forced labor and issue a withhold release orders (WRO)
2. Share evidence with allies and partners to encourage parallel customs enforcement actions.
3. Investigate prospective civil penalties cases against importers connected to previously issued fishing vessel WROs.

This is quite a daunting task for the CBP to do alone, so they have enlisted the help of external agencies to leverage existing and emerging technologies to detect IUU fishing and prevent or deter illegal seafood imports from entering the U.S. market as well as consider the use of countervailing duties, Section 301 tariffs, import declarations, Pelly Amendment certifications, and due diligence requirements to counter forced labor in the sea food supply chain.

The Office of the U.S. Trade Representative (USTR) has also been tasked with combating this specific issue. According to ST&R, it has been requested that USTR “engage with free trade agreement partners, preference program beneficiaries, and others to address forced labor and other abusive labor practices in fishing.” In addition, they have also been asked to “collaborate with Canada and Mexico to prohibit imports of goods, including seafood, produced in whole or in part by forced labor.”

External Applications - Uyghur Forced Labor Prevention Act

The Uyghur Forced Labor Prevention Act (UFLPA) was signed into law on December 23, 2021 by President Biden after a major issue of mass amounts of forced labor had become prevalent in the Xinjiang Uyghur Autonomous Region of the People’s Republic of China.

Under this act, the importation of any items, mined, manufactured, etc. fully or in part in the Xinjiang Uyghur Autonomous Region of the People’s Republic of China is prohibited under Section 307 of the Tariff Act of 1930 and said goods are not allowed entry into the U.S.

Even with this Act, there are some very slim exceptions. If a manufacturer is attempting to import items from this region, those goods can only enter the United States if the Commissioner of U.S. Customs and Border Protection (CBP) concludes that the importer complied with specific conditions and had clear evidence that the imported items were not created in part or fully by forced labor.

The UFLPA also required the integration of the Forced Labor Enforcement Task Force. It is currently headed by the Secretary of Homeland Security and works in conjunction with Secretary of Commerce and Director of National Intelligence where they send a report to Congress regarding their strategy to support the CBP’s enforcement of Section 307 of the Tariff Act of 1930 regarding items, produced with forced labor, imported from People’s Republic of China.

This Act created a lot of significant changes, so the CBP has created an importer guidance resource for assistance with the implementation of the UFLPA rebuttable presumption that went into effect June 21, 2022. 

To learn more about forced labor provisions and how these new processes might affect your company, contact the Van Andel Global Trade Center today !

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ABOUT THE CONTRIBUTOR

Natalie Bremmer is a Student Assistant at GVSU’s Van Andel Global Trade Center . She is a Junior currently pursuing a Bachelors in Business Administration undergraduate degree in Finance, Human Resource Management, and General Management at Grand Valley State University. She enjoys lifting weights, getting lost in a good video game, spending time with friends, and going on long hikes.

Categories: Forced Labor Provisions
Posted on Permanent link for Updates on Forced Labor Provisions in 2023 on April 17, 2023.