The risk of detention or seizure of products imported into the United States warrants renewed attention to responsible business practices on forced labor risk in global supply chains.
United States Customs and Border Protection ("CBP") has announced the seizure of two shipments of disposable rubber gloves made in Malaysia by the world's largest producer, Top Glove Corporation Bhd. On May 4, 2021, CBP released a statement that it had seized 3.97 million disposable rubber gloves with an estimated value of $518,000 at the Cleveland port of entry. On May 12, 2021, CBP announced that it had seized 4.68 million disposable rubber gloves with an estimated value of $690,000 at the Kansas City port of entry. The port director in Kansas City stated, "Considering this seizure took place in the heartland of America, it goes to show that imports produced by forced labor affect everyone nationwide" and further noted that "CBP will not tolerate forced labor in U.S. supply chains."
Federal law prohibits the importation of merchandise mined, manufactured, or produced, wholly or in part, by convict labor, forced labor, or indentured labor, including forced or indentured child labor. The two seizures in May were made pursuant to a finding issued by CBP on March 29, 2021, that Top Glove used labor from inmates, or forced or indentured labor, in the manufacture of its disposable rubber glove products. A formal finding, issued pursuant to 19 C.F.R. § 12.42, requires conclusive evidence that the goods at issue were made with forced labor. The finding directed personnel at all U.S. ports of entry to begin seizing products produced by Top Glove and stated that CBP "will not tolerate foreign companies' exploitation of vulnerable workers to sell cheap, unethically-made goods to American consumers." Products stopped at a U.S. port of entry subject to a formal finding cannot be re-exported.
CBP has significantly increased its enforcement efforts targeting forced labor in 2021. The Top Glove finding is the second forced labor finding issued in fiscal year 2021. In contrast, there were only seven forced labor findings issued between 1996 and 2020. Likewise, the number of withhold release orders ("WROs"), which prohibit specific imports from being imported into the United States based on information that "reasonably but not conclusively indicates" forced labor was involved in the production of the goods, continues to rise with four issued year to date in 2021 and 16 WROs issued in 2020. Since forced labor will likely remain an important enforcement priority for the federal government, companies should evaluate whether their supply chain business practices are consistent with CBP findings and WROs and consider use of tools, such as the Department of Labor's "Comply Chain," to create and strengthen social compliance systems.
This Alert is the third in a series on the federal government's stepped up enforcement actions related to imported goods produced with forced labor. A prior White Paper addressed the increased use of WROs and Findings by U.S. Customs and Border Protection, and a prior Alert discussed the recent Finding that forced labor was used in the production of disposable rubber glove products manufactured in Malaysia.