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Forced Labor from the Xinjiang Province of China, U.S. Customs’ Response, and the Effects on Importers
Currently, forced labor in China is a heated topic of discussion, review, and high visibility, especially as it concerns imports into the United States of America. The most recent focus on forced labor in China centralizes around textiles produced in the Xinjiang province of China, an autonomous region in the northwest portion of China. Before we dive into the full discussion of the U.S. Customs and Border Protection (CBP) response and how it effects importers, we need to understand the circumstances of the forced labor conditions for certain groups of people in China.
According to the U.S. Department of Labor: Bureau of International Labor Affairs and the U.S. Department of Agriculture: Economic Research Service, the Chinese government has knowingly and willingly detained members of cultural minority groups and have forced them into internment camps and through a re-education process with the stated goal of suppressing extremism to align with the thought that their standards of living as being culturally and ethically acceptable. Of the 56 ethnic groups officially recognized by China, the Muslim minority ethnic groups face the most dire treatment; one such group is the Uyghurs. These minorities are “detained in [internment] camps and forced to labor in factories […while] they receive little pay, are not allowed to leave, and have limited to no communication with family members”, according to the US Department of Labor. The re-education process includes these cultural minorities being forced to learn and adhere to a different language and political viewpoint than they previously held from their cultural heritage. Crucially, they are also being forced to work in the manufacture of many products, such as hair, polysilicon, tomato, fish, gloves, and textile products including thread and/or yarn.
Textile products are some of the more heavily monitored imports into the United States. For each item imported and classified under Chapters 50-63: Textiles of the Harmonized Tariff Schedule, U.S. CBP has long required that the fabric/textile’s manufacturer’s name and location be reported at the time of import. This includes the manufacturer’s full business name, address, and contact information, which must correspond to the Country of Origin listed for the product. Through the course of the last decade, China has become the leading producer of textiles, surpassing the previous leader, the United States of America. China has mostly imported cotton in the past as cotton requires a high level of maintenance and care to produce an adequate volume of raw crops resulting in local farmers employing additional workers. These farms have determined cotton is profitable, but there are numerous other crops that will generate revenue while having to pay out less for additional workers to tend to the crops. This realization led the farmers to abandon cotton as a crop and focus on heartier products requiring less care. The government of China has imposed quota tariffs, provided incentives, and used persuasion with certain groups including manufacturers and farmers to increase cotton production and limit its import. The unethical practices of internment camps and forced labor groups have increased China’s textile production significantly and caused manufacturers who use cotton to relocate or build satellite offices/warehouses from pro-shipping sites along trade routes, including sea ports, to a more secluded area to obtain the cotton from the Xinjiang province, which falls in-line with the measures China’s government has implemented to keep their status as the world’s largest textile manufacturer. However, it has also led to a response that China may not have foreseen from several countries around the world.
U.S. Customs and Border Protection has responded to this forced labor with stringent controls, creating a significant effect on importers into the US. CBP has imposed an abject ban on any product made wholly or partially in the Xinjiang province of China through the Uyghur Forced Labor Prevention Act. CBP has made it a requirement of due diligence for the importer to ensure products of forced labor are not being imported into the country. CBP has included these requirements under 19 U.S.C. § 1307, which advises on the transparency of the production chain of the products is to be fully reviewed by the importer to ensure no portion of the product is manufactured in Xinjiang. Failure to ensure proper due diligence could result in detention and exclusion under 19 U.S.C. § 1499 and seizure and forfeiture under 19 U.S.C. § 1595a(c). Furthermore, the importer could face penalties, fines, fees, and even a ban from future importation of any commodity. It is also under the purview of U.S. Immigrations and Customs Enforcement (ICE) Homeland Security Investigations (HSI) department to determine if a criminal investigation and federal prosecution is warranted. This will definitively come into effect if the importer knowingly supplies false documents and/or false information without doing their due diligence on the production of the product they are importing. The importer of record is solely responsible for ensuring CBP regulations and laws are upheld. The importers must show they have completed their due diligence in ensuring that none of their products are produced from forced labor. This includes a complete transparency of the production process. The importer is required to be able to prove with supporting evidence that the finished product was not wholly nor partially produced in Xinjiang, including all individual parts in a Bill of Materials for a larger final product.
Forced labor is a heavily critiqued practice and, by most international standards, it is an unethical treatment of persons in violation of basic human rights. The response by the U.S. CBP has broadcasted their stance on this unethical practice and will not permit support for this practice by allowing imports from the Xinjiang province of China. This is a highly focused front by the CBP and is a topic all importers, customs brokers, logistics, and trade compliance personnel, need to take note of and ensure they are following CBP laws and regulations.
If you have question about how your business may be affected by these regulations or how to be compliant, reach out to sales@allynintl.com.
Contributor: DJ Turner
References:
“Against Their Will: The Situation in Xinjiang.” DOL, (https://www.dol.gov/agencies/ilab/against-their-will-the-situation-in-xinjiang#:~:text=Uyghurs%20are%20one%20of%20those,factories%20must%20endure%20dreadful%20conditions.)
Chinese Cotton: Textiles, Imports, and Xinjiang. (https://www.ers.usda.gov/webdocs/publications/104394/err-307.pdf?v=9172)
Gale, Fred and Eric Davis. August 2022. Chinese Cotton: Textiles, Imports, and Xinjiang, ERR-307, U.S. Department of Agriculture, Economic Research Service. (https://www.ers.usda.gov/webdocs/publications/104394/err-307.pdf?v=9172)
Strategy to Prevent the Importation of Goods Mined, Produced, or Manufactured with Forced Labor in the People’s Republic of China. (https://www.dhs.gov/sites/default/files/2022-06/22_0617_fletf_uflpa-strategy.pdf)
19 U.S.C. § 1307 (https://www.law.cornell.edu/uscode/text/19/1307)
19 U.S.C. § 1499 (https://www.law.cornell.edu/uscode/text/19/1499)
19 U.S.C. § 1595a(c) (https://www.govinfo.gov/content/pkg/USCODE-2021-title19/pdf/USCODE-2021-title19-chap4-subtitleIII-partV-sec1595a.pdf)
19 U.S.C. § 1595a(c) - https://www.cbp.gov/sites/default/files/assets/documents/2017-Nov/Mitigation%20Guidelines_2%20SEIZURES%20-%20Introductions%20Contrary%20to%20Law.pdf.
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