CBP Faces Challenge in Enforcing Ban on Goods Made with Forced Labor

Although the Agency has received criticism from some members of Congress for not taking more action to seize imported goods made with forced labor, U.S. Customs and Border Protection (CBP) does face a considerable challenge in enforcing the relatively new law. The Trade Facilitation and Trade Enforcement Act (TFTEA), which became law in February 2016, along with numerous other provisions, banned all goods made with forced labor from being imported to the U.S. by striking the “consumptive demand” clause of the Tariff Act of 1930. The clause had previously allowed for forced labor-made goods to be imported if consumer demand in the U.S. outweighed the ability to produce the product domestically.  

Since the enactment of the TFTEA, CBP has issued 4 orders to seize 50 shipments of goods suspected to have been made with forced labor (all from China). This is a relative increase from prior to the passage of the TFTEA, when only 39 actions were taken since 1930 and zero between 2001-2015. CBP is now allowed to detain suspected forced labor-made goods based on “reasonable” information, but not necessarily “conclusive”. This language has given critics reason to believe CBP should be more aggressive in exercising its ability to withhold shipments. However, identifying these goods is a challenge given that the violations that do occur may be multiple tiers down the supply chain and not with the primary supplier abroad where the liable importer or CBP would have greater visibility. The primary foreign supplier or manufacturer may be compliant, but their supplier or their supplier’s supplier may be providing parts or raw materials with forced labor components, which makes identification more challenging.          

CBP’s risk management techniques will also need time to evolve. The TFTEA, while creating numerous new mandates and authorizations for CBP, did not provide any additional resources to address the issue of forced labor. For now, the Agency is doing what it can with what it has. This includes action and follow-on investigation against companies using or potentially using North Korean forced labor. However, with estimates as high $140 billion worth of forced labor-made goods entering the U.S. annually, it is undeniably a problem that all stakeholders must take action to address.

The issue was prominent during the Senate Confirmation hearing for CBP Acting Commissioner, Kevin McAleenan, in October 2017. In his responses both orally in the hearing and in written follow up questions for the record, McAleenan asserted that CBP was taking steps to combat forced labor in the supply chain, including: engaging with the trade community and other private organizations to create awareness and share intelligence; incorporating forced labor into trade programs such as CTPAT; and leveraging the Centers of Excellence and Expertise to enhance risk management tactics. Part of CBP’s outreach includes promoting ‘Informed Compliance’ for importers. It has disseminated numerous information resources on its website.

While Congress is right to drive urgency on the issue, they must also recognize the constraints and various priorities CBP is faced with in its trade enforcement mission. Going forward, CBP will need to continue to engage with all relevant stakeholders, including foreign governments and the trade community, while also leveraging new data sources and processing tools to enhance risk management. Additional revenue from Congress in implementing new strategies and tactics would benefit the agency. 

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