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CBP Likely To Issue More WROs Based on Forced Labor Allegations

Recent developments in Congress and now unprecedented action by U.S. Customs and Border Protection (CBP) likely signal increased supply chain enforcement may be coming – and US importers should take notice.

As discussed in our previous blog entry, on March 18, 2021, the Senate Finance Committee held a hearing titled, “Fighting Forced Labor: Closing Loopholes and Improving Customs Enforcement to Mandate Clean Supply Chains and Protect Workers.”  In his opening remarks, Chairman Ron Wyden (D-OR) unequivocally stated that forced labor, which is “modern day slavery”, occurs in countries that are part of the American supply chain and that the US should use its economic muscle to defeat forced labor around the globe.

During the hearing, Senators called for stronger laws, increased enforcement, and greater transparency of US law prohibiting the importation of goods made with forced labor.  Lawmakers also called for more action to punish bad actors, moving beyond simply stopping the importation of certain goods and issuing fines.  In particular, Senator Elizabeth Warren stated, among other things, that corporations should be held accountable for their work supporting forced labor.

Now, CBP is reflecting this shift in increased supply chain enforcement.  On May 29, 2021, CBP directed personnel at all US ports of entry to seize disposable gloves produced in Malaysia by Top Glove Corporation Bhd., following a record speed forced labor Finding.

CBP has the authority to issue Withhold Release Orders (WRO) when information “reasonably indicates” that merchandise was mined, produced, or manufactured, wholly or in part, in any foreign country by forced, prison, or indentured labor.  Furthermore, upon sufficient evidence, CBP will publish a more formal Findings and may begin seizure of imports.

With regard to the gloves, CBP issued its forced labor Finding following a months-long investigation that began when CBP issued a related WRO in July 2020.  For context, in October 2020, CBP issued its first forced labor Finding in nearly 25 years pertaining to a Chinese Stevia manufacturer, which took place four years after a May 2016 WRO.

The record speed in which CPB issued its most recent Finding likely reflects an increased trend in the US to combat forced labor in the supply chain of imported products.  A trend Brenda Smith, the recently retired executive assistant commissioner of CBP’s Office of Trade, who noted in remarks to the press that Congressional stakeholders are now looking at ways to modernize both the statute and CBP regulations to make the process more responsive and efficient.

This shift underscores that simply having auditor services in place to verify supplier practices is not sufficient to ensure acceptance of such goods in the United States.  As in previous blog posts, we urge shifting supplier compliance away from companies’ operational functions and into the legal department to ensure best practices in this rapidly-evolving area.

© Copyright 2023 Squire Patton Boggs (US) LLPNational Law Review, Volume XI, Number 92

About this Author

Ericka A. Johnson Government Investigations & White Collar Attorney Squire Patton Boggs Washington DC

Ericka Johnson is an associate in the Government Investigations & White Collar Practice. She represents companies and executives in, among other things, Foreign Corrupt Practices Act (FCPA) internal investigations, enforcement actions, defense matters and compliance before the US Department of Justice and similar authorities. She assists multinational companies in developing and implementing effective anticorruption compliance policies and strategies for domestic and international operations. As part of her compliance practice, Ericka also advises companies on cybersecurity risks,...

Ludmilla Kasulke Trade Attorney Squire Patton Boggs Washington DC
Senior Associate

Ludmilla (Milla) Kasulke draws on her experience in both domestic and international policy to assist clients on trade matters. Milla provides multinational corporations, sovereign governments and entities, and quasi-government entities with advice on a wide range of trade policy, legal, and regulatory issues. She has been actively engaged in all aspects of the Section 232 process, including the exclusion petition process, and regularly advises clients on the impacts of current and potential new actions. Milla also regularly counsels clients on the impacts of current and potential new trade...

Marisa T. Darden Government Investigations & White Collar Attorney Squire Patton Boggs Cleveland, OH

Marisa Darden is a former state and federal prosecutor who assists clients across myriad industries. As a member of the Government Investigations & White Collar Practice, Marisa actively advises companies and individuals in defense of investigations and criminal matters brought by law enforcement and regulatory agencies.

Marisa is a former Assistant United States Attorney and was an Assistant District Attorney in the New York County District Attorney’s Office. She was the lead prosecutor on investigations and prosecutions of criminal matters involving complex factual and legal...

Sarah K. Rathke, Squire Patton Boggs, Manufacturing Litigation

Sarah Rathke is a trial lawyer specializing in manufacturing litigation, particularly complex supply chain disputes. She has argued and tried cases on behalf of manufacturers in forums throughout the US. Her clients include foreign, domestic, and multinational manufacturing entities. Her skills include a deep understanding of the process of bringing highly engineered products to market and conveying that understanding to judges and juries.

Sarah has litigated supply chain disputes involving automotive, aerospace, medical, construction and office...

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