ILMA Compoundings March 2018 - 15

The evidence required to establish forced-labor involvement with an
import transaction has been significantly relaxed, so much so that a
growing number of situations are giving rise to a presumption of forcedlabor involvement, without specific details."
FAST BEGINNINGS
CBP has wasted no time running with this new environment. Since March 2016, Withhold Release Orders (which
withhold the release of cargo from CBP control) with
potential relevance to ILMA members have been issued
and remain active concerning soda ash, calcium chloride,
caustic soda, potassium, potassium hydroxide and potassium
nitrate. Previously issued Withhold Release Orders (WROs)
that have been given new life involve sulfuric acid and asbestos. Countries of product origin relevant to these WROs
include China, India, Japan, Mexico and Mongolia.
These WROs were issued against specific exporters and
their subsidiaries and other related entities. However, CBP is
inclined to consider other manufacturers and distributors in
the same regions to be suspect. This predilection is fostered
by a presumption by CBP that the practices of a given firm
are a strong indication that those practices are customary
among other firms in that area. This view tends to be
based on cultural similarities, concentration of vulnerable
(economically and otherwise) worker candidates and an
assumption that local authorities tend to ignore the practices.
PROVING A NEGATIVE
Under the new statutory and regulatory structure, the process
by which CBP justifies the issuance of WROs is now considerably easier than it was in the past. CBP only needs to
receive information that "reasonably, but not conclusively"
indicates the presence of forced labor as the basis for issuing
a WRO. To illustrate one way this might happen, consider the fact that the U.S. Department of Labor produces

forced-labor lists pursuant to a statutory requirement and
an executive order. This information does not necessarily
constitute sufficient information to "reasonably indicate" use
of forced labor by a particular exporter, but if the detail is
sufficient to show broad implication of multiple exporters in
a particular locale, CBP may use this information produced
by the department as the basis for a WRO or as a starting
point to gather additional information from other sources.
Once a WRO is issued, the U.S. importer faces a very
difficult challenge having it removed. Effectively, the burden
shifts to the U.S. importer to demonstrate that its imported
commodities were not manufactured (in whole or in part)
by forced labor. Keep in mind that forced labor need only
contribute to the production of the imported product. If
a component of a product qualifies for this designation,
the entire product is tainted. The fact that partial (including indirect) use of forced labor is sufficient to invoke the
ban makes it all the more difficult to demonstrate to the
contrary. For instance, if a manufacturer of a raw material
uses forced labor, then sells the raw material to an exporting
chemical manufacturer, the importer of the chemical manufacturer's product is subject to the ban based upon the
practices of the raw material manufacturer. Even if the
chemical manufacturer could demonstrate that the offending
raw material supplier is one of several such suppliers, the
WRO would remain in place unless the importer could produce credible evidence that the imported product did not
contain the tainted raw material. Establishing evidence as
"credible" would be very difficult under the circumstances.

ILMA Compoundings March 2018

Table of Contents for the Digital Edition of ILMA Compoundings March 2018