US detaining high number of goods under forced labor ban
In the first few months of 2024, the US Forced Labor Enforcement Task Force (FLETF) and Customs and Border Protection (CBP) have steadily increased detention of goods manufactured whole or in part using forced labor, with almost 8,000 shipments valued at over $2.8 billion USD detained to date.
Earlier this year the Department of Homeland Security received a budget allocation of $115 million to increase staffing and enforcement measures associated with the US forced labor ban, and Congress has been pushing CBP to adopt a global approach to forced labor enforcement rather than focusing primarily on shipments originating from China and Southeast Asia.
In the first year of the forced labor ban, detentions originating from all other countries combined represented less than 1% of total shipments detained. However 2023 saw a sharp increase in shipments detained from Mexico due to suspicion of forced labor, and to date $12.5 million in goods have been detained from that region alone. In the first months of FY 2024, the value of shipments detained originating from outside of Asia is already half the total value of goods detained from outside of Asia in all of FY 2023. Since 2022, CBP has also expanded its enforcement efforts outside of established high risk sectors. Most shipments detained in the first year of the forced labor ban came from either the electronics and apparel sector. However, between 2023 and 2024 agriculture, industrial and manufacturing materials and base metals have seen an increase of as much as 68x their detention rate in 2022.
Interpreting US forced labor enforcement stats & trends
Since 2022, US Customs and Border Protection has periodically published detention and release statistics for goods detained under the US forced labor ban. This dashboard contains overall detention metrics as well as the value of shipments detained per month, detention count by industry and total shipment value by country of origin.
When interpreting these statistics, there are several important things to keep in mind. First, CBP omits any shipments that were immediately re-exported to the country of origin or abandoned upon import. This means that overall detention statistics may be substantially higher than what is reported on the dashboard. Second, the ‘country of origin’ listed on a shipment refers to the country from which the shipment was sent to the United States - it does not necessarily represent where the shipment was manufactured or produced.
This is a critical point in understanding the law. The US forced labor ban prohibits goods manufactured “whole or in part” using forced labor, which means that while the US has targeted goods with inputs from specific regions, technically goods can be detained regardless of their country of origin. This is demonstrated by the fact that the shipment value of goods with Malaysia, Vietnam or Thailand listed as their country of origin far surpass the shipment value of goods originating from China. Importers must have full visibility into their upstream supply chain to appropriately assess and remediate risk of forced labor.
What to do in the event of a detention
Proactive risk management can decrease the likelihood of detentions or seizures under the US forced labor ban. However, in the event that an importer does receive a detention upon import, US Customs and Border Protection has issued guidance on which documents they recommend submitting to contest applicability or admissibility of the law. In addition to a flow chart or map demonstrating who your suppliers are and what role they play in the production of the goods, documents representing transportation records and payment records must be produced to demonstrate chain of custody for said goods.
Importers have 30 days to respond to CBP and contest a detention. They have the option to contest applicability (i.e. based on the parameters of the US forced labor ban, the law does not apply to this shipment) or admissibility (i.e. even though the shipment may have passed through restricted suppliers / areas, the importer can prove that forced labor did not occur in the production of the good).
How to prepare your supply chain
To comply with the US forced labor ban, it is imperative that importers know every supplier in their value chain. Any unknown suppliers represent a legitimate risk of detention or seizure upon import. To learn more about how Sourcemap can prepare your supply chain for compliance with the US forced labor, reach out to our team of experts.