Trend Alert: Increased U.S. Monitoring of Forced Labor in Supply Chains – International Law


United States: Trend Alert: Increased US Watch on Forced Labor in Supply Chains

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Continuing the trend of increased surveillance of forced labor in supply chains (see our last week’s post on revolutionary German legislation in this area), on March 18, 2021, the US Senate Finance Committee will hold a hearing on “the fight against forced labor”. More specifically, the hearing will focus on “[c]lose loopholes and improve customs enforcement to enforce clean supply chains and protect workers. “This may signal a continuing trend in the United States to address forced labor in the supply chains of products imported into the country.

This trend began in February 2016, when President Obama signed the Trade Facilitation and Law Enforcement Act 2015 (TFTA). This law repealed the “consumer demand” loophole in the Tariff Act of 1930, which allowed the importation of certain goods produced by forced labor if the goods were not produced “in such quantities in the United States for meet consumer demand from the United States. “

By bridging this loophole, the TFTA strengthened the ability of the U.S. Customs and Border Protection (CBP) to target, restrict and issue Stay Orders (WROs) to withhold or exclude suspicious shipments – and statistics show that this occurs. From 2000 to 2015, no WRO or official report was published. Today there are a total of 47 active WROs and 7 formal findings.

In general, CPB has the authority to issue a WRO when information “reasonably” indicates that the commodity has been mined, produced or manufactured, in whole or in part, in a foreign country by forced or contract labor – including forced child labor. If the CPB determines that this relatively low standard of proof has been met, then the onus is on the importer to prove that the subject goods were not manufactured using prohibited labor. In addition, based on sufficient evidence of forced labor, the CPB will publish its official findings in the Customs Bulletin and the Federal Register.

Notwithstanding this increased power, it is unclear exactly what “loopholes” or “improvements to customs enforcement” will be discussed at the next hearing. At a minimum, we can anticipate a continuing trend to tackle forced labor in the supply chain of products imported into the country. Last month, Finance Committee Chairman Ron Wyden (D-OR) said the group would “place special emphasis on ending the importation of goods produced by forced labor.”

To this end, although no government witnesses will appear, at least four witnesses from industry and NGOs will testify, including representatives from the United Steelworkers, the Human Trafficking Law Center, the United States Fashion Industry Association and the United States Fashion Industry Association. Sourcemap, which is a supply chain tracker. business.

As such, in anticipation of increased legislative oversight, companies should consider reviewing some best practices for global supply chains, including: (1) developing a comprehensive supply chain map and profile for understand the entire production chain, from raw materials to finished products; (2) require a written code of conduct for all suppliers, including minimum labor standards; and (3) conduct regular risk assessments and audits to detect and deter the use of forced labor. While some or all of these practices have traditionally been audit functions in many companies, it may be a good time to transfer their management to the legal department, to ensure compliance with developing laws in this area and to benefit from the protection offered by the lawyer-client privilege.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought on your particular situation.

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