CBP Forced Labor Official Says Specific Commodity Special Enforcement Possible
David Hampton, deputy executive director, Trade Remedy Law Enforcement Directorate at CBP, told an audience at the Victims of Communism's annual China Forum that, over the next two years, CBP will be "reinvigorating our efforts to pursue penalties" with a team that's dedicated to administering penalties related to the Uyghur Forced Labor Prevention Act.
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A Hudson Institute senior fellow on the same panel as Hampton had criticized CBP for not imposing any fines as it's implemented UFLPA.
Hampton said the agency is also "broadening our enforcement of UFLPA to make sure we’re covering all spectrums, across the Harmonized Tariff Schedule."
He said it's "exploring the idea of conducting special enforcement operations on specific commodities," as well.
Olivia Enos, the Hudson Institute panelist, suggested that CBP should not allow re-exports of goods that were subject to detention under UFLPA, even though some of them may not contain inputs made with forced labor.
She also said: "If you are a repeat violator of the UFLPA … you should go on a banned list where you are not eligible to use tariff-free entry."
Hampton said proposed changes to de minimis where exporters will have to supply more information about what's in the package will be useful for UFLPA enforcement, but said the idea of carving out eligibility for de minimis due to past detentions is problematic.
"One thing we consider at CBP is, just because you re-export your goods does not mean that you have [Xinjiang] inputs, it’s not an admission of guilt," he said. "What is the definition of a repeat offender?"
While he cautioned that imposing fines requires "a pretty significant evidentiary process," he said CBP is thinking about civil penalties, particularly if they find an importer had a shipment rejected, rerouted it to another country, and tried to bring it back in. "Goods that we have excluded, we don't expect to see them come back, that's clearly illegal," he said.
Hampton noted that of $3.5 billion worth of goods that have been detained under UFLPA, $750 million worth, or about 4,000 shipments, have been determined to have been produced in some measure by forced labor. For shipments that were allowed to enter, importers proved that the supply chains didn't touch Xinjiang or companies named on the entity list. Hampton said no company has succeeded in proving that goods made in Xinjiang were not made with forced labor.
"We are making a financial dent in companies that are trying to send goods to the U.S. made with forced labor," he said.
He said that electronics, apparel, footwear, textiles and industrial materials are the top categories of goods caught in UFLPA, and that CBP has invested $2.8 million to open cotton isotopic testing laboratories. Two are operational, he said, and "at least one more" will be opening.
He declined to say what proportion of the garments tested contain cotton grown in Xinjiang province, but said the testing is being used to validate whether the supply-chain-based screens for cotton-containing goods are on target, "so when we're looking at goods for potential detention, we're looking in the right place."
Hampton praised firms that have invested in their own supply chain tracing and have disentangled from the Xinjiang region. However, he said where companies have created bifurcated supply chains, one for the U.S. market, and one for other markets, he warns them: "Be aware, you're still high risk." He said CBP still needs to examine their supply chain documentation. But, he said, if they show there is no Xinjiang content in that U.S.-bound supply chain, "we're limited in what we can do."