US Fines Company for Goods Made With Suspected Forced Labor in China
By Rong Shi August 29, 2020
Earlier this month, the U.S. Customs and Border Protection (CBP) issued its first penalty for goods made with forced labor under the Trade Facilitation and Trade Enforcement Act of 2015.
The agency levied a fine of $575,000 against the Chinese entity PureCircle, a company accused of using prison inmates in China to produce the food sweetener stevia.
The fine against PureCircle is one of a series of actions over forced labor taken up by CBP in the past year. Since September 2019, the agency has issued 11 moratoriums on the importation of forced labor products into the United States, four of which were directed at Chinese companies.
"As part of its trade enforcement responsibilities, CBP is dedicated to vigilantly monitoring U.S.-bound supply chains for links to forced labor, including prison labor, and will act to deter and disrupt the importation of merchandise made with forced labor practices," Brenda Smith, executive assistant commissioner of CBP's Office of Trade said in a statement.
She continued, "The use of forced labor is not just a serious human rights issue, but it also brings about unfair competition in our global supply chains. CBP's goal is to ensure that goods made by forced labor never reach U.S. consumers."
So far this year, U.S. law enforcement authorities have stepped up scrutiny of a range of products from China suspected of being manufactured through forced labor.
"We've had a very active year this year in terms of issuing withhold release orders," Smith told VOA.
In just the past few months, CBP has targeted several Chinese companies for allegedly selling products made with forced labor to American consumers.
Lenovo also targeted
On Monday the Associated Press reported that the U.S. Commerce Department has imposed sanctions on Lenovo, a Chinese manufacturer that supplies laptops to U.S. public schools, due to its alleged use of forced labor.
On August 11, CBP issued a moratorium on all U.S. ports of entry for imports from the Hero Vast Group, a Chinese clothing company.
On 1 July, CBP officials at the port of Newark detained a shipment of products and accessories suspected of being manufactured with human hair from Xinjiang, China, indicating a possible violation of human rights under forced labor and imprisonment.
On June 17, CBP issued a moratorium on the release of all U.S. ports of entry for the detention of all or part of imported goods made from products produced by Lop County Meixin Hair Product Co. Ltd. (Meixin) in Xinjiang, China.
The official at CBP told VOA that each case is based on a "reasonable suspicion" of the use of forced labor.
"So essentially what that means is that when goods arrive at a port of entry and we have identified that they are likely to have been produced using forced labor," Smith added.
'Proving' products are free from forced labor
Li Qiang, executive director of China Labor Watch in New York, told VOA that CBP's "reasonable suspicion" policy is to identify and withhold goods first. "As long as your company's products come in, I'll have to detain you first, and you'll have to provide evidence that you're not using forced labor," Li said.
Li said that this places a heavy burden on companies suspected of using forced labor – effectively assuming guilt and forcing importers to prove their innocence. "Now some multinationals must strengthen the management of their supply chains to prevent orders from flowing to places where forced labor is used."
CBP's Smith said that, to ensure that they do not send products made through forced labor into the U.S., importers not only have to comply with the law themselves, but also keep an eye on their supply chains and make sure their supplies also comply with U.S. law.
"So our expectation is that they will be looking not only at the supplier that they buy directly from, but, for example, the supplier's supplier. So if there is a shipment of apparel garments that comes into the United States and that the importer that brings it into the United States will not only be looking at who makes that garment, but who makes the fabric or who grows the cotton that goes into the fabric," Smith told VOA.
Prison labor sweetener
PureCircle USA is a U.S.-based subsidiary of PureCircle Biotech, a joint venture between China and Malaysia based in Jiangxi, China. In 2016, an NGO accused it of importing several products made by prison inmates into the U.S., including stevia and its derivatives exported by a company in Inner Mongolia.
The CBP's $575,000 fine against the group came four years after that initial accusation, pointing to how difficult it can be to win judgments against companies.
CBP said in a statement, "The action against PureCircle stems from an investigation into stevia produced in China by Inner Mongolia Hengzheng Group Baoanzhao Agricultural and Trade LLC ("Baoanzhao") that CBP initiated after receiving an allegation from a Non-Governmental Organization. That investigation led CBP to issue a Withhold Release Order (WRO) in May 2016. The WRO remains in effect."
PureCircle USA has denied importing products made by forced labor before 2016, saying that it agreed to a penalty amounting to only 7% of the amount originally proposed by CBP in a settlement with CBP to avoid "extensive litigation requiring travel to China during the COVID-19 pandemic."
Adrianna Zhang contributed to this report.
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