In the supply chain industry, forced labor has been a recurring problem for years, but its relevance has increased since 2016 owing in part to legislative measures made in the United States. There is a wealth of information accessible on forced labour and worldwide efforts to combat it. This article summarises the key provisions and introduces the reader to our new online training on "Forced Labor for Customs & Global Trade Professionals" - the only training dedicated to import and export compliance professionals.
What is forced labor?
Eleven indications of forced labour have been recognised by the International Labour Organization, including isolation, limitation of mobility, withholding of pay, deceit, excessive overtime, and intimidation.
Over 27.5 million individuals were expected to be victims of forced labour worldwide in 2021.
17,325,000 were in the private sector. There were 6,332,000 victims of sexual exploitation.
3.92 million were in the state-managed economy.
Nothing new: The 1930 Tariff Act and Section 307 Enforcement Actions
All products, wares, articles, and merchandise mined, produced, or manufactured in any foreign nation using convict labour or/and forced labour or/and indentured labour under criminal penalties shall not be admissible at any U.S. port, and their importation is forbidden..." US Customs and Border Protection (CBP) enforces Section 307 of the Tariff Act of 1930 (19 U.S.C.) using two mechanisms: Withhold Release Orders and Wand Findings. If CBP has a reasonable suspicion that certain commodities from a country include forced labour, the Withhold Release Order is utilised to keep such items awaiting further examination of the cargo. If CBP finds clear evidence that particular commodities from a nation include forced labour, a Finding is utilised to detain and confiscate those items.
Recent Laws that Touch On Forced Labor
Tariff Act of 1930, Section 307
United States – Mexico – Canada Agreement (USMCA)
Trafficking Victims Protection Act
Uyghur Human Rights Policy Act of 2020
Global Magnitsky Human Rights Accountability Act
Countering Americas Adversaries Through Sanctions Act
Uyghur Forced Labor Prevention Act
The Uyghur Forced Labor Prevention Act, UFLPA, was signed into law in December 2021 and expands on past measures to prohibit the import of commodities purportedly created using forced labour in the Xinjiang Uyghur Autonomous Region (XUAR). The XUAR is a key supplier of commodities such as cotton, polysilicon, chemicals, textiles, and garments, despite efforts by firms to eliminate XUAR-sourced goods and supplies. Xinjiang produces an estimated 45 percent of the world's polysilicon, a vital component in the production of solar panels, as well as an estimated 20 percent of the world's cotton supply and 80 percent of China's cotton supply.
Companies who now source materials or goods created using forced labour in the XUAR face a significant risk to their company brand, loss of shareholder confidence, the possibility of penalties, and future financial losses.
UFLPA is today the most current US law pertaining to forced labour enforcement and entered into effect on June 1, 2022. This legislation placed substantial import restrictions on items mined, produced, or manufactured in whole or in part in the Xinjiang Uyghur Autonomous Region (XUAR) of China, as well as commodities created using forced labour from the XUAR, either inside the XUAR or forcefully transported to another region of China. This statute implies that all products having a link to XUAR were produced using forced labour, prohibiting any trade with XUAR until there is strong and persuasive proof to the contrary.
Online Training Offer on Forced Labor
We have set together with US customs experts and designed a 2-hour online training course on the topic that you can study at your own leisure and from the comfort of your home. This course uses recorded sessions with a tutor to bring you essential, bite-sized information to help you understand the Labor Prevention Act and design a compliance programme. We will cover:
What is forced labor?
The view from the UN
Measures around the world.
What is the Uyghur Forced Labor Prevention Act ?
Discussing CBP Operational Guidelines
Importation Process and Enforcement of UFLPA
Requesting an Exception to the Rebuttable Presumption
Resources for Supply Chain Due Diligence, Tracing, and Management
Type and Nature of Information that May Be Required by CBP
Evidence Goods Were Not Mined, Produced, or Manufactured Wholly or In Part in the Xinjiang Uyghur Autonomous Region
Commodity-Specific Supply Chain Tracing Documentation
How to design a compliance programme
Students pass a multiple-choice test to complete the course and receive a certificate of completion. Please write to email@example.com to get details on the study programme, registration fee and how to access the training platform and get started.
Top Tips for Customs and Global Trade Professionals
Organizations must now satisfy and complete a variety of due diligence criteria demonstrating "clear and compelling" proof that their goods and materials are not manufactured using forced labour. Documentation requirements include signed affidavits from product manufacturers, purchase orders (invoices and proof of payment), lists of production processes, transportation documents, daily manufacturing process reports, evidence regarding importers' forced labour compliance programmes, and evidence of compliance with forced labour prevention protocols.
Here are our top tips:
Inform your vendors about forced labour
Include clauses about forced labour in your contracts and instructions.
Do not concentrate just on the product vendor.
Consider all elements, from raw resources to end product.
Know the origin of each component and who was engaged in its manufacture.
Establish a document audit trail for the supply chain (PO, Invoice, Payment, Audit, Production, etc.)
Keep all documentation to enable sourcing at all levels.
Consider independent third-party verifications as part of a compliance monitoring programme.
Have all the "proof" in place before the import; the 30-day detention time is insufficient to assemble everything needed to qualify for an exemption under the UFLPA or demonstrate the absence of forced labour.
Please schedule a call with us to discuss the requirements and get help based on your specific circumstances at www.customsmanager.org
What is the contribution of Customs Manager Ltd?
In light of the recent passage of the Uyghur Forced Labor Prevention Act (UFLPA) in the United States, Customs Manager is committed to serving as a resource for information on forced labour issues, including enforcement, for our customers. Our purpose is to educate, provide context and resources, and support customers regardless of their level of compliance, while continually seeking to reinforce and enhance compliance.