On
The statute prohibits the importation of goods made in whole or in part with the use of convict, forced or indentured labor. However, if the contribution of prohibited labor to the whole product is insignificant (both from a quantitative and a qualitative perspective), CBP may consider the product outside the scope of the statute. For example, if prohibited labor is used to manufacture a single part in the engine of a car, the contribution of prohibited labor to the final product (the car) may be considered "de minimis" for purposes of Section 1307. But, if the part is an essential part of the engine or the manufacture of the part comprises a substantial portion of the total labor, CBP may deem the car to be within the scope of Section 1307.
The underlying statute does not contain a de minimis provision, and CBP's regulations implementing the statute do not include a de minimis carve-out. Prior to issuing these FAQs, CBP had not referred to a de minimis carve-out, and, indeed, in CBP's FAQs for the WRO on cotton and tomatoes from
It is not yet clear how CBP will implement the de minimis carve-out in the context of other WROs. To the extent this becomes CBP policy, manufacturers and US importers will be able to focus their compliance on significant material inputs rather than trivial ones, which will benefit articles produced within complex supply chains. However, until more guidance develops on how CBP intends to implement this policy, manufacturers and US importers should be wary of relying on it too heavily.
What Is a Withhold Release Order?
Section 307 of the Tariff Act of 1930 prohibits the importation of merchandise mined, produced or manufactured, wholly or in part, in any foreign country by convict labor and/or forced or indentured labor, including forced child labor. As noted in our prior Legal Update, an exemption previously available to importers mitigated the practical impact of Section 307 by allowing for the importation of merchandise produced with forced labor if consumption of the merchandise in
A WRO can be issued based on CBP's own self-initiated investigation or on information gathered from outside sources, including whistleblowers and non-governmental organizations. Pursuant to the relevant regulations, any person (inside or outside of CBP) who has reason to believe that merchandise is being, or is likely to be, imported into
Importers often do not know that CBP is investigating a forced labor allegation until it issues a WRO. Based on the information provided, the commissioner (or a delegate) will conduct an investigation and may issue a WRO when information reasonably, but not necessarily conclusively, indicates that the merchandise is made wholly or in part with forced labor. CBP will prevent the admission into
WROs are typically issued against imports of specific merchandise manufactured in a specific country by a specific company. However, as with the WROs on cotton and tomato products from
Footnotes
1 The 11 indicators are (i) abuse of vulnerability, (ii) deception, (iii) restriction of movement, (iv) isolation, (v) physical and sexual violence, (vi) intimidation and threats, (vii) retention of identity documents, (viii) withholding of wages, (ix) debt bondage, (x) abusive working and living conditions and (xi) excessive overtime. See https://www.ilo.org/global/topics/forced-labour/publications/WCMS_203832/lang--en/index.htm.
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