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U.S. Customs and Border Protection Steps Up Enforcement Activity Against Products Made With Forced or Indentured Labor

Renewed government focus on imported products made with forced or indentured labor warrants attention to global supply chains best practices.

On March 29, 2021, United States Customs and Border Protection ("CBP") announced that it will begin seizing disposable rubber gloves made in Malaysia by the world's largest glove producer, Top Glove Corporation Bhd., following a months-long investigation. CBP found that Top Glove had used labor from inmates, or forced or indentured labor, in the manufacture of its disposable rubber glove products. CBP announced that it "will not tolerate foreign companies' exploitation of vulnerable workers to sell cheap, unethically-made goods to American consumers." This finding, issued pursuant to 19 C.F.R. § 12.42, expands upon a Withhold Release Order ("WRO") issued by CBP in July 2020 based on "reasonable but not conclusive information" that multiple forced labor indicators existed in Top Glove's production process, including debt bondage, excessive overtime, abusive working and living conditions, and retention of identity documents.

Federal law prohibits the importation of merchandise mined, manufactured, or produced, wholly or in part, by convict labor, forced labor, or indentured labor, including forced or indentured child labor. If CBP determines that imported goods were produced with forced labor, the agency will publish a formal finding in the Customs Bulletin and the Federal Register. A formal finding requires "conclusive evidence, i.e., probable cause that the goods were made with forced labor," a higher standard than is required for the issuance of a WRO. If the importer fails to establish to CBP's satisfaction that the merchandise was not produced with forced labor, the goods may be seized and subject to summary forfeiture proceedings. Unlike with a WRO, goods stopped at a U.S. port of entry subject to a formal finding cannot be re-exported.

This forced labor finding—the second issued by CBP in fiscal year 2021—reflects a dramatic increase in CBP enforcement actions targeting forced labor. In October 2020, CBP issued a finding that stevia extract produced by a Chinese firm was being made by forced labor. Likewise, the issuance of 16 WROs in 2020 and five WROs on a single day in September 2019 illustrates that forced labor remains an important enforcement priority for the federal government. Accordingly, companies should consider assessing their compliance efforts and becoming familiar with best practices for global supply chains, as outlined by CBP. CBP's best practices include developing a comprehensive supply chain profile from raw materials to finished product, adopting a written code of conduct for all suppliers in their global supply chains that addresses minimum labor standards, and implementing internal controls requiring regular risk assessment and audits to deter the use of forced labor and to remediate any identified issues.

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