CBP’s latest WRO and why importers should care.

On January 13, 2021, U.S. Customs and Border Protection (CBP) issued its latest Withhold Release Order (WRO) - announcing it will detain cotton products and tomato products produced in China’s Xinjiang Uyghur Autonomous Region at all U.S. ports of entry.

This is the fourth WRO that CBP has issued since the start of this year, and the second on products originating in Xinjiang. In 2020, eight of the thirteen WROs issued were on goods made by forced labor in China.

It is critical for importers to understand not only the scope of this WRO, but also to review their responsibilities as importers and the potential impact to their supply chains.

As defined under U.S. Federal statute, “the importation of merchandise produced, wholly or in part, by convict labor, forced labor, and/or indentured labor, including forced or indentured child labor is prohibited”. CBP enforces prohibition on imported goods made by forced labor and will detain shipments suspected of being imported in violation of this statute by use of Withhold Release Orders.

The latest WRO was issued against imports of cotton and tomatoes and their related downstream products produced in whole or in part in the Xinjiang region. This also includes downstream products produced outside the Xinjiang region that incorporate these inputs. These products include apparel, textiles, tomato seeds, canned tomatoes, tomato sauce, and other goods made with cotton and tomatoes.

When sufficient information is available, CBP may detain goods believed to have been produced with forced labor by issuing a WRO. Importers do have the opportunity to either re-export the detained shipments or to submit information demonstrating that the goods are not in violation. If CBP is not able to establish the admissibility of the goods, detained shipments will be subject to seizure and excluded from entry into the U.S.

The liability of bringing in goods does not end with potential detentions and barriers to entry. There can be seizures separate from that. These consequences can affect both the manufacturer and importer who can also face civil liabilities if they knowingly or negligently brought in fraudulent goods.

Once issued, WROs are in effect until revoked or modified. Importers must make every effort to stay up to date with CBP actions as well as to review their entire supply chain to ensure their imported material and products do not exploit forced labor at any point in the supply chain. This review can be challenging - though direct shipments can usually be easily tracked, indirect shipments of items containing cotton produced within intra-Asia can be much more difficult to validate. Ultimately, it is the responsibility of the importer to practice and demonstrate due diligence to ensure the products they are importing are compliant.

Laufer continues to monitor CBP’s evolving policy and the latest WRO updates. In cooperation with our partners at GDLSK, we are offering a free webinar to the trade community to help promote further understanding of this critical issue. This webinar will explain CBP’s use of Withhold Release Orders (WRO) under Federal Statue and specifically cover the details for the Cotton and Tomato WRO and how to determine potential impact to your business. Click here to learn more.