CBP Seizes $800k of Human Hair From China Alleging Forced Labor

On July 1, 2020, U.S. Customs and Border Protection (CBP) officers in Newark, New Jersey seized an import from China of roughly 13 tons of beauty products and accessories, discovered products made of human hair. The shipment, which came from the Xinjiang Region of China is estimated to be worth over $800,000.00.

The import was seized as a result of a June 17, 2020, Withhold Release Order (WRO) for “imported merchandise made wholly or in part with hair products produced by Lop County Meixin Hair Product Co. Ltd. (Meixin) in Xinjiang, China”.

According to CBP’s Executive Assistant Commissioner for the Office of Trade, there had already been evidence that reasonably indicated that the Chinese hair product company had been using prison labor to produce their merchandise, which is prohibited by Federal statute 19 U.S.C. 1307.

19 U.S.C. § 1307

Section 307 of the Tariff Act of 1930 codifies into law the prohibition of importing items produced -wholly or in part- by the use of forced labor. The Trade Facilitation and Trade Enforcement Act of 2015  ended the “consumptive demand” clause in 19 U.S.C. § 1307, which had previously allowed for the importation of goods that had been partially produced by forced labor.

Since its repeal, CBP, in partnership with U.S. Immigration and Customs Enforcement, has been actively investigating allegations of forced labor around the globe, examining various supply chains in order to curb the illicit practice. According to CBP, the agency does not target whole product lines or industries, rather it focuses on information regarding specific actors and their merchandise.

Pursuant to 19 C.F.R. § 12.42(e), if CBP is presented with reasonable (not necessarily conclusive) evidence of forced labor, the Commissioner can issue a Withhold Release Order (WRO). If CBP has sufficient evidence to make a determination that the merchandise in question was, in fact, produced whole in part by forced labor, the Commissioner will publish a formal finding in the Federal Register.

Importing? Proceed Cautiously:

Following the July 1^st seizure of the hair products arriving from China, DHS issued a Xinjiang Supply Chain Business Advisory. The advisory highlights that the Federal Government recognizes the harsh repression and illicit practices of the Chinese regime, and cautions US stakeholders– businesses, individuals, academic institutions, research service providers, and investors – that continue to operate their business with entities in Xinjiang.

Specifically, the advisory states that these companies “should be aware of reputational, economic, and, in certain instances, legal, risks associated with certain types of involvement with entities that engage in human rights abuses, which could include Withhold Release Orders (WROs), civil or criminal investigations, and export controls”.

Withhold Release Order(s) WRO(s):

According to CBP, investigations that lead to a Withhold Release Order may be initiated in a number of ways, including a self (CBP) initiated investigation, news reports, and tips from either the public or trade community.

Since 2016, the US has concertedly increased investigations and enforcement of forced labor violations. CBP provides the public with a list of all WROs and the findings of the investigations.

The recently seized shipment is not the first instance related to slave labor from China. Prior to the June 17^th WRO, CBP had already banned imports from five (5) other Chinese manufacture due to claims of forced labor. In October 2019, CBP issued detention orders for all garments produced by HetianTaida Apparel Co., Ltd. in Xinjiang, China, as well as four (4) other items from unrelated industries and produced in various countries:

Forced Labor in Your Supply Chain?

According to a  list of goods compiled by the Bureau of International Labor Affairs’ (ILAB), as of September 20, 2018, nearly 150 products from over 75 countries are suspected to be produced by forced labor.  Additionally, according to Annick Ferbery, the director of government relations for the Human Trafficking Institute, as of 2019, US imports of merchandise likely produced with forced labor totaled more than $400 billion each year.  

Since the recent seizure of illicit items from China is simply the newest situation in a string of surprisingly sinister stories, we can expect to see many similar stories surfacing soon. To vet your supply chain and effectively avoid the use of forced labor, companies should create their own system of compliance by reaching out to manufactures, suppliers, and other actors involved in the production of an item. CBP provides the public with fact-sheets, as well as other insightful resources to ensure that your supply chain is not corrupted with forced labor.

Tips for importers whose shipment(s) has been detained under a WRO:

• Merchandise Subject to a WRO: If your product has been detained by CBP due to a WRO, you may export your shipment to another country within three (3) months of the initial importation.

• Merchandise Subject to a Finding: Within three (3) months of importation, the importer must submit “a certificate of origin and a detailed statement demonstrating that the subject merchandise was not produced with forced labor. If the proof submitted does not establish the admissibility of the merchandise, or if none is provided, the merchandise is subject to seizure for a violation of 19 U.S.C. § 1307”.
• Amendment or Revocation of a WRO/Finding: WROs have no expiration date and stay in effect until they are revoked. WROs may be revoked if CPB is presented with sufficient evidence that substantially proves that the “subject merchandise was not made with forced labor, is no longer being produced with forced labor, or is no longer being, or likely to be, imported into the U.S”.

For assistance with importer due diligence in relation to forced labor requirements; or for assistance re-exporting your detained merchandise, in submitting documents to dispute the use of forced labor, or for assistance with revocation request process, contact our Customs and International Law attorneys at info@diaztradelaw.com or 305-456-3830.

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