Industry News

New Import Withhold Release Orders (WRO) for Forced Labor in China

By Margaret Lange

Don’t wait for Customs and Border Protection (CBP) to issue a Withhold Release Order (WRO) on your imported goods. Review your supply chain now and ensure that your goods are not produced with forced labor and make sure that you can prove it!

Since the Tariff Act of 1930, the U.S. has prohibited the importation of goods determined to be minded, produced, or manufactured, in whole or in part, by the use of forced labor, including prison labor, forced labor, or indentured child labor. The 1930 Tariff Act included a “consumptive demand” clause (19 U.S.C. § 1307), which allowed the import of goods made with forced-labor, IF the goods were not produced in the U.S. in quantities that met the consumptive demands in the U.S.  The Trade Facilitation and Trade Enforcement Act (TFTEA) of 2015 removed the consumptive demand clause, strengthening CBP’s ability to target, restrict, and issue WROs to detain or exclude suspect shipments.

Recent research has found widespread forced labor in Xinjiang, the Northwest region of China, known as the Uyghur Autonomous Region. It has been determined that the Chinese government is engaged in human rights abuses against the Uyghur people and other ethnic and religious minorities in the region.

In response to the findings, CBP issued a notice with five new WROs, directing CBP Officers at all ports of entry to withhold release on imports of the following goods:

  1. All products made with labor from the Lop County No. 4 Vocational Skills Education and Training Center in Xinjiang Uyghur Autonomous Region, China. Information reasonably indicates that this “re-education” internment camp, which is often called a Vocational Skills Education and Training Center, is providing prison labor to nearby manufacturing entities in Xinjiang. CBP identified forced labor indicators including highly coercive/unfree recruitment, work and life under duress, and restriction of movement.
  2. Hair products made in the Lop County Hair Product Industrial Park in Xinjiang Uyghur Autonomous Region, China. Information reasonably indicates this site is manufacturing products with forced labor of the Uyghur people and other minority ethnic groups who are detained in “re-education” internment camps in Xinjiang. CBP identified forced labor indicators including highly coercive/unfree recruitment, work and life under duress, and restriction of movement.
  3. Apparel produced by Yili Zhuowan Garment Manufacturing Co., Ltd. and Baoding LYSZD Trade and Business Co., Ltd in Xinjiang Uyghur Autonomous Region, China. Information reasonably indicates that these entities use prison and forced labor in apparel production. CBP identified forced labor indicators including the restriction of movement, isolation, intimidation and threats, withholding of wages, and abusive working and living conditions.
  4. Cotton produced and processed by Xinjiang Junggar Cotton and Linen Co., Ltd. in Xinjiang Uyghur Autonomous Region, China. Information reasonably indicates that this entity and its subsidiaries use prison labor in their raw cotton processing operations in Xinjiang. Cotton-processing factories and cotton farms in this region are prison enterprises that use convict labor.
  5. Computer parts made by Hefei Bitland Information Technology Co., Ltd. in Anhui, China. Information reasonably indicates that Hefei Bitland uses both prison and forced labor to produce electronics. CBP identified forced labor indicators including abuse of vulnerability, restriction of movement, isolation, and intimidation and threats.

Additionally, on September 22, 2020, due to reports finding Uyghurs, Kazakhs, Kyrgyz, and other Muslim minority groups living in forced internment camps and other human rights concerns, the House passed the Uyghur Forced Labor Prevention Act (H.R.6210), which if passed through the Senate and the Whitehouse would prohibit the importation of all goods made in China’s Xinjiang region.

Once a WRO is issued, Importers have three (3) months to submit a certificate of origin and convincing evidence substantiating that the merchandise was not produced with forced labor. Documentation may include factory visit and audit reports including photos of work and living spaces, supply chain maps, and evidence of the implementation of policies that protect human rights. CBP has posted a Fact Sheet for providing substantiation for the admissibility of your goods. If CBP is not able to establish the admissibility of your goods, the detained shipment will be subject to seizure and excluded from entry into the U.S. per 19 U.S.C. § 1307.

The best thing to do, of course, is to take every effort to make sure that you know your supply chain and have established strong business practices to remove any possibility of the use of forced or indentured labor in the production of your goods.

Know Your Supply Chain – Be able to map or define your supply chain from raw materials through to the finished good and establish an assessment for potential risk of forced labor. Visit or work with a third-party auditor to visit the factory, and document those visits. If factory visits are not feasible, request a Production Record, which is a set of documents from your supplier that includes everything from the sourcing, shipping, and receipt of raw materials, line production records, overhead records, to shipping/export docs. It is an extensive set of records but will demonstrate the supply chain and where the raw materials and finished goods were produced.

Include Forced Labor in Your Purchase Terms: Contact your manufacturers now. Ask them for certificates of origin including the region in China and statements or affidavits that the goods are not produced in the Xinjiang region of China or with forced labor. Clearly, state in your purchase terms or contracts that Forced Labor is prohibited in the production of your merchandise.

Corporate Policy and Training – Establish a corporate policy and documented procedures that include every component of the supply chain. Provide staff and supplier training and communicate the policy to all staff. Build internal controls that include risk assessments and audits of the supply chain.

Once issued, Withhold Release Orders are in effect until revoked or modified, so knowing your supply chain is a critical business practice that should be supported from the top down. Make sure you are part of the solution to actively protect workers in your supply chain from human rights abuses.

To assist importers in ensuring compliance, CBP provides information, guidance, and resources on their website (https://www.cbp.gov/trade/programs-administration/forced-labor). Additionally, the U.S. Department of Labor, Bureau of International Labor Affairs (ILAB) provides additional information and reports on forced and child labor (https://www.dol.gov/agencies/ilab).

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