In a December 2, 2020 statement, CBP’s Office of Trade directed the issuance of a Withhold Release Order (“WRO”) against cotton and cotton products made by Xinjiang Production and Construction Corps (“XPCC”) based on information that reasonably indicates its use of forced labor. As a result, CBP will detain shipments containing cotton and cotton products originating from XPCC (as well as from any subordinate and affiliated entities). The WRO extends to products that are made in whole or in part of the above cotton, including garments and other textile products. CBP officials have estimated that this action could ultimately impact billions of dollars of imports.
Although no action has yet been taken in response to a petition seeking the issuance of a Xinjiang region-wide WRO on all cotton-made goods (which would account for 85% China’s cotton), CBP officials have observed that this latest action will have a comparable effect given how deeply XPCC is embedded in the economy of the Xinjiang region.
The WRO on XPCC cotton products comes on the heels of various other recent actions targeting goods allegedly made by forced labor from China’s Xinjiang Uyghur Autonomous Region. These have included legislation introduced in the U.S. Congress, the issuance of a multi-agency business advisory, CBP’s issuance of several supplier-specific WRO’s and CBP’s initiation of surveys of various importer’s practices and policies with respect to avoidance of forced labor in their supply chains.
In light of the above developments, companies should take stock of their supply chains to identify where potential risks may exist as well as enhance current due diligence practices.
On December 10, 2020, GDLSK partners Arthur Bodek and Patrick Caulfield will be speaking on these topics at a webinar presented by the U.S. Fashion Industry Association. Further information and registration details can be found at: https://www.usfashionindustry.com/webinars/emerging-developments-forced-labor.
Should you wish to explore these topics further, please do not hesitate to contact our office.