Can the U.S. End Supply Chain Links to Forced Uighur Labor?

A Chinese cargo ship. (Kees Torn, https://tinyurl.com/iiwcrl7a; CC BY-SA 2.0, https://creativecommons.org/licenses/by-sa/2.0/deed.en) Recent reporting on the human rights crisis in the Xinjiang Uighur Autonomous Region has revealed the United States to be a major consumer in the global marketplace for forced Uighur labor. It is a near certainty that some goods currently being sold in the United States—though it is difficult to say which ones—were made, wholly or in part, by Uighurs and other Muslim minorities in furtherance of their forced “reeducation” in China. Any U.S. “demand” for forced Uighur labor is, for all intents and purposes, inadvertent. U.S. companies are not seeking out forced Uighur labor or hoping to secretly reap a financial benefit from it. There is no affirmative U.S. consumer demand for goods made with forced labor. The reputational risks from a supply chain linked to genocide or crimes against humanity would appear to be significant. Yet investigative analysis has produced credible evidence linking U.S.-bound supply chains to forced Uighur labor .  Inadvertent U.S. demand is not exactly a cause of the crisis in Xinjiang, but foreclosing U.S. supply chain links to forced Uighur labor is nevertheless a legitimate policy objective. It is also proving to be a confounding one. For 90 years, Section 307 of the Tariff Act of 1930 has prohibited the importation of goods made, wholly or in part, with forced labor. Yet this law is proving incapable of effectively curtailing imports linked to Xinjiang or, for that matter, just about every widespread instance of forced labor in the global economy.  Section 307 suffers from two main defects. First, supply chain links to forced labor persist because modern global supply chains are vast and opaque. The statute isn’t presently designed to help bring visibility and clarity, though that is a function this law is uniquely well positioned to perform. While Section 307 is reasonably capable of addressing forced labor by a final manufacturer of imported goods, it struggles mightily to target forced labor where it is most pervasive—at the base of the supply chain. Without a change to the structure of Section 307, no volume or breadth of enforcement activity targeting commodities of risk (like cotton from Xinjiang) will ever truly be effective. Second, despite the easy moral framing of forced labor as a practice of universal scorn, deciding how to identify and then effectively ban the importation of goods made with forced labor presents factual and legal questions that are uniquely complex. These questions carry not just commercial ramifications but also ethical and reputational consequences uncommon to the universe of trade regulation. There is arguably no area of trade regulation where the need for due process and fair procedures is greater—or more absent—than in Section 307. The crisis in Xinjiang has crystallized the shortcomings of Section 307, and the need for an evolution of the statutory structure. The moment is ripe for a grand reenvisioning of the U.S. import ban on forced labor. A revised Section 307 can play a unique role in the landscape of laws targeting supply chain links to human rights abuses and is an opportunity for the United States to exercise global leadership with and among our allies.  The idea of banning the importation of goods made with forced labor is proving quite popular. Canada and Mexico agreed through the U.S.-Mexico-Canada Agreement to enact similar bans. A comparable bill was recently introduced in Australia. It’s relatively easy to agree that goods made with forced labor have no place in global trade. The challenge lies in figuring out how to make such a law effective. Section 307 in Action: The Challenge of Xinjiang The operative language of Section 307, codified at 19 U.S.C. § 1307, is a surprisingly succinct 54 words:  All goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in any foreign country by convict labor or/and forced labor or/and indentured labor under penal sanctions shall not be entitled to entry at any of the ports of the United States, and the importation thereof is hereby prohibited[.]           This ban is categorical and absolute. It does not require any supplemental enforcement action to be taken, or any additional legislation to be applicable to a given set of facts. Technically, no mens rea is specified. The sole condition triggering the application of the import prohibition is the use of forced labor in a good’s production. If a good was made wholly or in part with forced labor, such good may not lawfully be imported into the United States. Violations of the ban, if discovered, would be grounds for civil or criminal penalties.  Thus, in the context of Xinjiang, Section 307 presents an alluringly simple proposition. If the situation in Xinjiang amounts to forced labor, and goods are being made wholly or in part by such labor, then it’s illegal to import such goods into the United States. A few years ago, before the facts in Xinjiang were well documented, it might have been possible to question whether the social programs deployed in Xinjiang really did amount to forced labor. That moment, however, is far in the past . The only party continuing to assert that there is no forced labor in Xinjiang is the Chinese Communist Party . It is imperative to appreciate that the “ban” of the forced labor import ban is imposed by the statute itself and does not result from any particular enforcement action taken by U.S. Customs and Border Protection (CBP). This nuance has been lost in essentially all reporting on the recent, overlapping withhold release orders (WROs) issued by CBP against cotton and tomatoes from Xinjiang, and cotton produced by the Xinjiang Production and Construction Corps. These WROs have been almost universally described as actions to “ban” the importation of such goods, though they did no such thing. CBP itself has explained that a “WRO is not a ban.” A similar phenomenon has also featured in reporting and editorializing on the Uyghur Forced Labor Prevention Act (UFLPA). This legislation, introduced in the 116th Congress, and now reintroduced in the present Congress, would establish a rebuttable presumption that all goods from Xinjiang, or produced by Uighurs in one of the social programs at issue, regardless of location, were made with forced labor. The UFLPA has also been characterized inaccurately as imposing a “ban” on goods from Xinjiang—it isn’t—and described inaccurately as “flip[ping] the burden of proof to line up with reality” by requiring importers “to demonstrate that their imports from Xinjiang are not made with forced labor.” It wouldn’t.  These are not quibbles. Mischaracterizing WROs as bans, or describing the UFLPA as necessary to shift the burden of proof to importing companies, risks misunderstanding not only what the law can do but also what it can’t do—and, above all, what must be done to make it effective. The forced labor import ban presents enormous enforcement challenges, especially in the context of Xinjiang, where most forced labor is occurring deep at the base of the supply chain. These challenges are not overcome by CBP’s aggressive use of broad WROs—they are exacerbated by it. The UFLPA may accomplish something important, but it does nothing to address the core challenges of enforcement. What is a WRO, if not a ban? It’s a type of presumption. More specifically, it’s an internal customs directive indicating that CBP has found reasonable grounds to suspect that some class or kind of merchandise is being produced with forced labor and imported into the United States, and instructing port directors to detain shipments of such merchandise. CBP is presuming that the class or kind of merchandise was made with forced labor. If an importer has a shipment detained pursuant to a WRO, the importer could demonstrate either that its shipment doesn’t contain the class or kind of merchandise specified in the WRO (in other words, CBP stopped the wrong shipment) or that, while the shipment does contain the specified class or kind of merchandise, the goods were not actually made with forced labor (in other words, CBP’s presumption is incorrect).  The WRO mechanism is reasonably well suited to handling allegations of forced labor by the final manufacturer of goods, but it founders quickly when used to target forced labor occurring deeper in the supply chain. For example, if CBP suspects that Company X in China is assembling widgets with prison labor, it can issue an order and reliably stop every shipment of widgets manufactured by Company X. Customs declarations identify imported merchandise (widgets) and manufacturers (Company X). But CBP cannot lawfully use a WRO as a fishing expedition—that is, to
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