On February 4, 2019, U.S. Customs and Border Protection (CBP) issued a withhold release order (WRO) against tuna and tuna products from the Tunango No. 61, a Taiwanese vessel, based on information obtained by CBP that indicated that tuna is harvested with the use of forced labor. The order will detain the entry of tuna and any such merchandise manufactured wholly or in part by the Taiwanese vessel at all U.S. ports. In the accompanying statement, CBP stated that importers of detailed shipments will have the opportunity to “export their shipments or demonstrate that the merchandise was not produced with forced labor.” This WRO is the most recent action resulting from CBP’s renewed focus on enforcement of the U.S. ban on imports of forced labor under Section 307 of the Tariff Act of 1930, and the first issued against a fishing vessel.
Section 307 prohibits the importation of “[a]ll goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in any foreign country by convict labor or/and forced labor or/and indentured labor.” Under Section 307 and the implementing regulations, if CBP has reason to believe that any class of merchandise subject to the ban is in fact being, or likely to be imported in the United States, it may in turn initiate investigations of potential violations. Such investigations could result in the issuance of detention or withhold-release orders of the merchandise or in exclusion and/or seizure orders. The regulations provide importers with an opportunity to provide proof of admissibility in response to actions taken by CBP to enforce the import ban.
CBP’s investigations into imports of forced labor span across a variety of different industries and have been applied on a country-wide basis as well as to specific producers and, most recently, as to a shipping vessel. Since 2016, CBP has issued WROs on importations from specific Chinese producers of soda ash, calcium chloride, caustic soda, stevia and its derivatives, peeled garlic, toys, and a country-wide WRO on cotton from Turkmenistan. In December 2018, CBP announced that it is investigating whether goods produced by forced labor at a Chinese internment camp in its Xinjiang region are being imported into the United States. CBP’s announcement followed reporting from the Associated Press tracking shipments from the factory to a sportswear company in North Carolina. According to human rights experts, approximately 1 million Uighurs, Kazakhs and others are being arbitrarily detained in such camps in the Xinjiang region. Companies that have suppliers in the Xinjiang region should take extra care to ensure that their goods are not made by forced labor.
CBP has issued press releases reminding “importers of their obligation to exercise reasonable care and take all necessary and appropriate steps” to comply with the forced labor import ban and the sanctions for forced labor and slavery of North Koreans under the Countering Adversaries through Sanctions Act (CAATSA). In 2017, CAATSA strengthened the import ban as it related to goods made by North Korean labor to provide rebuttable presumption of the use of forced labor in connection with goods made by North Korean labor. In particular, under the law, importation of “any significant goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part by the labor of North Korean nationals or citizens” is prohibited from entry into the United States “unless CBP finds through clear and convincing evidence that the merchandise was not produced with a form of prohibited labor.” To date, CBP has withheld the release of 15 shipments of seafood made by North Korean workers under this law.
In addition to detention, seizure, and exclusion of imports (as well as the reputational impact), companies that import goods made with forced labor could face liabilities under the Trafficking and Victims Protection Act, which provides victims of human trafficking (such as forced labor) with a private right of action against traffickers as well as third parties who “knowingly benefit … from participation in a venture that person knew or should have known has engaged in” trafficking. In 2016, Cambodian migrant workers who produced shrimp and seafood under forced labor conditions in Thailand brought an action against California-based Rubicon Resources as well as Thai seafood corporations, alleging that defendants were part of a joint venture that knowingly profited from forced labor in violation of the TVPA. The case, which could have significant implications for companies with global supply chains, is currently pending before the Ninth Circuit.