We can all agree that goods made from forced labor, indentured labor or child labor should not be introduced into the U.S. market. Indeed,
CBP Enforcement of
Key Guidance from CBP and
On
What is Forced Labor Due Diligence?
Forced Labor Due Diligence is vetting new and existing suppliers and upstream supply chain for use of forced labor. Prior to initiating a relationship with a new supplier, request that the new supplier answer a forced labor questionnaire, add terms and conditions prohibiting use of forced labor in sales contracts, welcome unannounced on-site visits, and sign certificates that verify that no forced labor is used. CBP is also looking for video interviews from company representatives or private investigators with foreign factory workers that show the absence of duress, restraint, coercion, or other signs of involuntary work, such as the absence of handcuffs or physical evidence of violence, like cuts or bruises. If your foreign suppliers push back or refuse to provide this type of information, CBP has advised importers to not import goods from those foreign suppliers. (The problem here is that
Forced Labor Due Diligence includes documenting the materials and labor use of a product's entire upstream labor and material production. Importers should trace the origin of the goods and their components by compiling a detailed document trail including, but not limited to, the following types of documents and information.
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A list of suppliers associated with each step of the production process, including names and contact information (addresses, email addresses, and phone number), with affidavits from each that no forced labor was used.
- Bills of material for every component of the imported article.
- Certificates of origin.
- Seller's inventory records, including dock/warehouse receipts.
- Shipping records, including manifests, bills of lading (e.g., airway/vessel/trucking).
- Buyer's inventory records, including dock/warehouse receipts.
- Wage documents such as timecards or pay stubs from the factories showing the time workers entered and left the factory.
- Videos and transcripts of interviews with workers at the foreign factories showing proof that the worker is not working under duress, such as proof of no handcuffs, consent to labor, and acceptable living conditions.
Forced Labor Due Diligence includes maintaining a company-wide Forced Labor Compliance Manual and conducting periodic supply chain audits for forced labor. According to the CBP guidance, importers must be conducting periodic audits with an eye for imports of goods made using forced labor. Importers should maintain forced labor procedures for detainments and other CBP actions pursuant to WROs, including proof of admissibility statements and certificates of origin. This should include a high-level statement of policy from senior management demonstrating the company's commitment to not using forced labor in its supply chain and training for employees and subcontractors regarding forced labor compliance.
Forced Labor Due Diligence can mean obtaining an advanced ruling from CBP as to whether a particular supply chain is using forced labor or not. CBP has advised importers that they should consider obtaining an advanced ruling to determine if a product or supply chain is using forced labor or not under 19 CFR Part 177. These agency rulings carry the force of law and may be applied to subsequent importations that are substantially similar to the specific facts as outlined in the ruling.
Product-Specific Supply Chain and Tracing Evidentiary Requirements - Cotton, Tomatoes, and Polysilicon
For certain industries or products from the XUAR, CBP and
Cotton - Specific documentary evidence must include documents that show the entire product's supply chain, from the origin of the cotton at the bale level to the final production of the finished product. Importers must provide a flow chart of the production process and maps of the region where the production processes occur, and this chart must number each step along the production process and number any additional supporting documents associated with each step of the process. The chart must also identify all the entities involved in each step of the production process, with citations denoting the business records used to identify each upstream entity - even if they did not have contact with the importer. Based on the Proof Apparel and Uniqlo rulings, cotton DNA lab testing and tracing, though complex and expensive, is also highly recommended.
Tomatoes - Specific documentary evidence must include supply chain traceability documents, such as lot codes assigned based on the commodity, variety, location, and harvest date, which demonstrate the point of origin of the tomato product. The importer must identify the tomato processing facility, including both the parent company and the estate that sourced the tomato seeds and/or tomatoes. These documents must contain records for the tomato seeds, tomatoes, and/or tomato products that identify all steps in the production process, from seed to finished product, from the farm to shipping to the
Polysilicon - Specific documentary evidence must include documents that show all entities involved in the supply chain and the country of origin of each material, and a flow chart mapping each step in the procurement and production of all materials and identify the region where each material originated from location of the quartzite used to make polysilicon, to the location of manufacturing facilities producing polysilicon, to the location of facilities producing downstream goods used to make the imported good. Importers must also provide a list of all entities associated with each step of the production process, including upstream partners not in contact with importer - even if they did not have direct contact with the importer.
Conclusion
With the UFLPA in force, along with dozens of WRO's, new Findings, and recent seizures, being unprepared for a forced labor inquiry by CBP is going to be costly - not just for an immediate shipment, but for future shipments in your upstream supply chain. Do not wait until CBP has determined that your supply chain contains evidence of forced labor. Due diligence means researching and vetting the upstream supply chain of your company's products and verifying whether forms of slave labor are used. Forced labor audits are no longer only a humanitarian or social responsibility concern - they are required by CBP to prove that imported merchandise into the
Resources for Forced Labor Compliance
Below are links to helpful resources for importers as guidance for forced labor due diligence and compliance with
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FLETF: Strategy to Prevent the Importation of Goods Mined, Produced, or Manufactured with Forced labor in
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FLETF: UFLPA Entity List - https://www.dhs.gov/uflpa-entity-list.
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S. CBP: Uyghur Forced Labor Prevent Act Operational Guidance (
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CBP's Informed Compliance Publication on Reasonable Care, which has a forced labor section starting on Page 14.
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Updated Guidance Document for Industry Hoshine Withhold Release Order (
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