Customs Blacklisting, New Data Show Ongoing Fight Against Forced Labor

Date: Friday, December 30, 2022
Source: Sourcing Journal

U.S. customs officials have blacklisted merchandise produced by three Chinese companies, including one that makes and distributes clothing, after an investigation revealed that they used North Korean labor in their supply chains.

Customs and Border Protection (CBP) revealed Tuesday that it has been detaining shipments from Jingde Trading, Rixin Foods and Zhejiang Sunrise Garment Group Co. since Dec. 5 for violating the Countering America’s Adversaries Through Sanctions Act (CAATSA), which bars the entry of goods made wholly or in part by North Korean nationals or citizens unless clear and convincing evidence that they were not made with forced labor can be provided. If no such proof materializes within 30 days of the detention notice, the merchandise can be subject to seizure and forfeiture.

The companies could not be reached for comment.

“CBP is committed to keeping America’s supply chains free of goods produced with forced labor and to eliminating this horrific practice,” said AnnMarie R. Highsmith, executive assistant commission at CBP’s office of trade. “North Korea’s forced labor system operates both domestically and internationally and supports the North Korean government’s weapons of mass destruction and ballistic missile programs, and it is also a major human rights violation. Legally and morally, we cannot allow these goods into our commerce.”

CBP previously wielded CAATSA in March to block goods made by Li-Ning from entering the United States, also citing the presence of North Korean labor in its supply chain. But it was the Chinese sportswear maker’s admission of using cotton from China’s Xinjiang Uyghur Autonomous Region, where Muslim minorities continue to be persecuted, that led Norges Bank Investment Management to sell off its stake in the company. Li-Ning’s stance, the world’s largest sovereign wealth fund said, created an “unacceptable risk that the company contributes to serious human rights violations.”

It’s also America’s boycott of Xinjiang goods, which under a year-old statute makes the rebuttable presumptions that any products stemming from the region are made with forced labor, that has ramped up CBP’s enforcement of tariff rules that have prohibited products of modern slavery since 1930.

Signed into law by President Joe Biden last Christmas, the Uyghur Forced Labor Protection Act (UFLPA) has boosted the ranks of the interagency Forced Labor Enforcement Task Force (FLETF), which the United States-Mexico-Canada Agreement Implementation Act established in 2020 to monitor the movement of forced labor goods. As of Dec. 6, CBP said, the agency has identified more than 2,300 entries valued at nearly $740 million for further examination under the UFLPA.

“The use of forced labor is a heinous act and our Department will continue to devote its full energy to combat it,” said Secretary of Homeland Security Alejandro N. Mayorkas on the anniversary of the UFLPA’s signing. “The enforcement of the UFLPA is a moral imperative; we will continue to prevent goods produced by forced labor, particularly through the repression of ethnic minorities in China, from entering the United States. We will uphold our nation’s values, enforce our laws and protect the integrity of lawful trade and the rights of the individual worker.”

To continue FLETF and CBP’s ongoing engagement with the industry and civil society, the FLETF said it’s planning to host its first biannual meeting with non-governmental organizations in January, followed by the first biannual meeting with the private sector. The Department of Homeland Security (DHS) said that it will continue to “enhance” its enforcement efforts by identifying additional entities that meet the criteria of the UFLPA Entity List, improving transparency and data sharing with stakeholders, and honing its ability to identify and block offending imports.

“Forced labor is a scourge and DHS will continue to prevent goods made with forced labor from entering the United States, whether they come from the People’s Republic of China or any other part of the world,” said Robert Silvers, FLETF chair and undersecretary for policy at DHS. “We are committed to eradicating forced labor from our supply chains. We are also committed to deepening our partnership with industry and civil society to further improve implementation of this new regime, ensuring that lawful commerce can proceed efficiently at the same time that we enforce our laws.”

Despite facing growing sanctions, China’s share of Xinjiang cotton is growing, according to recent data from the country’s National Bureau of Statistics. Due to favorable weather, the region produced 5.4 million tons of the fiber in 2022, a year-over-year increase of 5.1 percent. Xinjiang now contributes 90.2 percent of Chinese cotton, which in turn makes up more than 20 percent of the world’s supply. This means supply chains sourcing cotton from China are more exposed to modern-slavery risks than ever.

“Uyghur forced labor-spun yarn is shipped all across China. Uyghur forced labor-woven fabric is shipped all over China,” Laura Murphy, a professor of human rights at Sheffield Hallam University’s Helena Kennedy Centre for International Justice, told Sourcing Journal in September. “Until apparel companies can show that their entire supply chains are free of Uyghur forced labor, there is [a] high risk that products made in China will be made with Uyghur forced labor.”


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