Lawfare Daily: A Uyghur Forced Labor Protection Act Update

[Intro]

Brian Hoxie: So if you can demonstrate to CBP that you have remediated forced labor conditions in those countries and that the workers now have a voice in their production, then they can, you know, be reestablished, trade reestablished with the United States. So that's something that we're definitely working with the Department of Labor on. They've been excellent partners in that respect.

Natalie Orpett: It's the Lawfare Podcast. I'm Natalie Orpett, executive editor of Lawfare with Brian Hoxie, director of the Forced Labor Division at U.S. Customs and Border Protection's Office of Trade.

Brian Hoxie: People are using forced labor as defined by the ILO and some of these conditions and vulnerability of people as an economic advantage. And I think that sometimes that gets lost in the discussion. It probably doesn't get lost on businesses who are competing with companies that are using forced labor.

Natalie Orpett: Today we're talking about the Uyghur Forced Labor Protection Act and how his office is working to combat forced labor.

[Main Podcast]

Okay, so Brian, I've invited you on today to talk about your work managing what are really the front lines with respect to the implementation of the Uyghur Forced Labor Protection Act, which is, of course, the legislation that was passed in, I believe, December of 2021, in response to reports that China was rounding up its Uyghur population, detaining them in prison camps and so called reeducation camps, and pushing them into forced labor.

So to just lay the groundwork a little bit, can you tell us a little bit more about how this act came to be, why this issue gained Congress's attention, and what the act was trying to accomplish?

Brian Hoxie: Sure. The UFLPA really came out of a number of different conversations, mostly at the Hill level, but there was a lot of engagement from our civil society organizations as well as activists and different people that have been affected by the state sponsored forced labor conditions that exist in that region.

And for a little bit of background on, on where we started prior to the UFLPA is that we have a 1930 law, the 19 U.S.C. 1307, which designates that goods made with forced labor are prohibited from entry into U.S. commerce. And around 2017, we started a, in the Trade Facilitation Trade Enforcement Act, we started a new initiative to investigate those claims and allegations and information that we had on forced labor conditions and that.

Because in the TFTEA, the Trade and Facilitation and Trade Enforcement Act removed the consumptive demand clause from that 1930 law, it really opened up our ability to get a little bit more involved in looking at these allegations more broadly, because we knew we could enforce more effectively. The consumptive demand clause, and a little bit of background on that one, is that if a company could claim that this could, these goods may be made with forced labor, but there's no other market for these goods, I can't get them anywhere else, or they're not available in the United States, then they have that exemption.

So once that was removed, it was very strict that if forced labor conditions occur, those are prohibited. A lot of the work that the team did, and that was prior before I arrived, was in the region in the Xinjiang region of China and finding these instances of forced labor where the Uyghurs were being persecuted and put in, like you said, into the detention camps and made just to produce these goods and produce materials that went into goods that went into the United States.

So we issued several WROs with old release orders that prevent the goods from coming in under the 1930 law. So that was kind of the precursor to the UFLPA in the sense that we had a lot of enforcement actions already available in that region. And so people continued working on that outside in the private sector and we continue to work internally on the WRO process.

But when Congress passed the law and then in December and after the president signed it, we had six months to implement. So it was June of 2022 that we fully implemented the UFLPA. And in that timeframe, it was a integrated multi office team within CBP that built out all of the procedures and policies and the outreach and the communications to all the importers that would be affected by this.

And then when we implemented in June of 2022 there was no slowdowns. There was some concern that the goods would come in and they'd just be, you know, plugging up the ports. But we had a very excellent team that went through and were able to contact the trade, contact the different stakeholders and make sure that everybody knew that this was going to be implemented when it was going to be implemented and what it looked like.

So that's kind of like the arc, I guess I could go through of the history of where UFLPA kind of started.

Natalie Orpett: Okay, perfect. That's a really helpful overview. And I want to sort of dig into a bunch of different elements that you mentioned there. So, as you said, there's been this law on the books the Tariff Act of 1930, you know, for almost a century at this point.

It includes the provision you mentioned, which prohibits the import of goods that are produced through forced labor. So it sounds from your telling that some of the recognition of what was going on in Xinjiang came from the fact that there were, of course, already enforcement efforts underway relating to the tariff act and making sure that it was really being effectuated. Is that a fair characterization?

Brian Hoxie: I think in terms of that, it's difficult for me to really kind of I really at this point, guess what the focus was. I know that from CBP standpoint, we were doing everything we could to enforce this law. And we're currently doing everything we can to enforce the law.

So since then we've had the Countering America's Adversaries Through Sanctions Act, which affects North Korean labor and anywhere in the world that is considered forced labor. And then that was prior to the UFLPA, which, you know, CAATSA established the rebuttal presumption approach, which is a, is an interesting approach where it's like it's automatically made with forced labor, unless you can tell us it's not.

So it's a different approach to enforcement. I think that thinking about what other, you know, what considerations went into the law and what people were trying to effectuate to see how well it was, if it was effective or other ways to approach it is, it was before my time, but also I'm here to make sure that I implement it the best I can.

And so that's really where our focus is to make sure that we're the most efficient and effective at implementing all three laws that all tie to the 1930 Tariff Act.

Natalie Orpett: Right. Yeah. And I think it's worth digging in a little bit on exactly why Congress needed to pass this additional legislation to sort of bulk up the intent of the Tariff Act. And, you know, obviously we're talking specifically about forced labor.

So let's start with the Tariff Act itself. And, you know, there's this notion that we all are aware of, we don't want goods that come out of forced labor coming into the United States. What exactly does the Tariff Act spell out in terms of how we are going to accomplish that goal?

And then after we get a sense of that basic, you know, foundation, I want to get a sense of this subsequent legislation that came up to, to sort of bolster it based on our efforts, our, the United States efforts to effectuate that goal.

Brian Hoxie: So, the law itself speaks to and defines what forced labor is, and it is labor that is involuntary under the menace of penalty.

It aligns well with the International Labor Organization's definition of forced labor. But also we use the 11 forced labor indicators from the ILO in order to determine whether there is a forced labor indicator present. If there's, then that is forced labor that is used in the production of those goods.

The application of the law then goes into the regulations. So there are regulations for that law, and in it, it states that if we have reasonable, if we, if CBP or the commissioner reasonably suspects, which we read as reasonable suspicion, we have reasonable suspicion that forced labor is used, then we can prohibit the goods from entry.

The other section of it allows us to seize goods if we find the information is at a level of probable cause. And so the seizure of the goods allows us to then actually take control or custody of the goods. The importer cannot re-export those goods, and then they have to petition the government either to get them released or follow through with the cost of destruction.

So that is where we issue our findings. And it's a much more stringent, I guess, legal standard, but also enforcement standard. The effect of the law is that we immediately prohibit the goods. They arrive in the port. They don't, they are not released into entry and then there's no post entry or post release assessment, which is what happens in revenue cases in those sorts of places, some other areas as well.

It is an import ban and you could say it's probably a non tariff barrier, right? It's, there's no tariffs collected. It's not a revenue issue. It's an admissibility issue. So that, that is the process that from the actual operational process of how we handle these.

Natalie Orpett: So is the entry point for, you know, finding these goods and sort of exercising some jurisdiction related to the licenses that importers have? Is it related to what companies are doing? Sort of, where is the point at which we are able to intervene in the life cycle of goods being produced and ultimately making their way to the United States, to borders?

Brian Hoxie: Yeah, great question. So this all focuses on the foreign production of the goods. And so the producer of the goods, say it is an agricultural product, then that farm or whomever is then responsible for producing the goods. That is where the forced labor, if the forced labor conditions exist at that production, then that is the focus of the enforcement. So if you look at some of our withhold release orders, it will say this company, these products from this country. And so it's very specific to where the goods are produced.

The other angle to this that we have in several different aspects, Okay. So, for instance, we have a countrywide WRO on Turkmen cotton from Turkmenistan, and cotton itself is not typically imported into the United States as a raw material, right? You don't get bales of cotton imported. We import cotton products like shirts and pants and those sorts of things.

So the production process that takes place is an entire supply chain, and this is where we have to look into that supply chain and look at the companies that are involved in the production of the good to see if they're sourcing those goods from, say, Turkmenistan or, in the case of the UFLPA, from the Uyghur Autonomous Region.

So the supply chain tracing part of it is also another aspect of where we look to do the enforcement. And in that case, it would be the import. It is always the importer's responsibility under customs law of reasonable care and ensuring that they are complying with the laws and they do their due diligence to make sure that any companies that they are directly importing from or in their supply chains are free of forced labor.

And the direct imports are probably a little quote easier. It's because we know it's the exact same company. If you're directly importing that like sugar or cotton or take your pick from the list, then you should know that is completely, you know, not going to be allowed into U.S. commerce. And then it will get stopped at the port, but it all goes back to the importer of record, and they are the ultimate party responsible for the entry of the goods and providing the information to show that they are admissible.

Natalie Orpett: Okay, that's really helpful. So with respect to enforcement, you mentioned that you all have to do essentially investigations, surveillance all along the supply chain, but then the sort of entity with which you can engage is primarily the actual importer. So tell us a little bit about how enforcement plays out.

Brian Hoxie: So typically what we'll do is we issue a detention order and which is a standard customs detention process that we send them a notification that says these goods are going to be detained for, and then we'd list out the particular violation. So in this case, it would be forced labor or the UFLPA.

The importer in, in the case of a withhold release order, or in both cases, they can provide information that shows that those goods are actually admissible because they're not made with goods from forced labor. They're not made with goods from the Xinjiang region or with North Korean labor.

So they can provide supply chain documentation, or they can provide direct documentation that those goods are not sourced from the company that is listed in a WRO or from the Xinjiang region or the entity list, which is part of the UFLPA.

So then that engagement happens with our centers of excellence and expertise, which is a CBP particular offices. There's 10 of them across the country, and they are broken down by specific commodity areas, such as base metals or pharmaceuticals or agriculture, and those teams have very specific knowledge about that industry. They know about the accounts that they typically work with, and they will work directly with them on those particular goods and they know the information that they're looking for.

And after the reviews that the centers conduct, then they will make a decision on one way or the other. They'll either release the goods because they say that the importer has shown that they have done their due diligence. They do not have goods that are made from forced labor in their supply chain, or they'll issue a denial, and then those goods will be prohibited.

There are other processes after that are standard custom processes, so they can protest that decision, and then they can obviously go to the Court of International Trade if they believe that they've been, if they're still on the right and they believe that CBP is incorrect.

So there is a due process portion to that after we make those decisions, but the centers are very good at what they do in working with the different importers and ensuring that they are compliant and that they are timely and responding to those. And they've been very timely in responding to an enormous amount of work I have to say from the forced labor standpoint. But that is typically the general process of how the enforcement plays out.

Natalie Orpett: Okay, great So I do want to go back to something you had mentioned in your initial overview, which was that the UFLPA reversed or sort of shifted this burden of demonstrating whether or not forced labor existed. So can you talk through that in a little more detail? What was the role before? Why was this change necessary with respect to the Uyghur population and what was happening in China in particular?

Brian Hoxie: Yeah, so I would say that the WRO process is what we had before and we had to investigate and determine if there were the factors that we had. And there's a long process to go through in order to make sure that we have sufficient evidence to meet reasonable suspicion or a probable cause. And so it was upon.

The onus was upon CBP to focus on doing the investigation to determine where the forced labor conditions occurred and then notify the trade that these goods are prohibited because we have evidence that shows that the forced labor is involved. I don't know if I would say that it was necessary. I would say that it was an approach that Congress decided to pass is the rebuttable presumption.

So we kind of refer to this as a guilty until proven innocent kind of approach, but that was established with the CAATSA, the Counter America's Adversaries through Sanctions Act. And then they carried that over to the UFLPA. And the UFLPA is a, it is on a timeline, I think it's a seven year has to be renewed.

So like I said, we'll continue to implement this and determine how well and how effective this is from an enforcement standpoint. But it did shift, to go to your question about the shifting of the rebuttable presumption. Now it's an entire region. That is, if any goods are produced wholly or in part, which is from the 1930 statute from that region, now it is prohibited.

So then it really focuses the burden of proof or the burden of showing that these goods are admissible to the importer. They need to conduct their due diligence. They need to find, because they're going to know their supply chains better than anyone. Right. They're going to know that these are the people I buy from, and I need to go down through the different tiers of my supply chain and ensure that there's no forced labor.

And, you know, I will give them credit. The industry has definitely taken this to task, and we've had seen a lot of companies that have been able to really provide the documentation we're looking for and get ahead of this and ensure that their supply chains are clean. So it's a different approach.

Like I said, I don't think it's not a, you know, the old way was bad. We're still doing the old way, if you will, or not as effective, but this was a solution that Congress designed and built and we're going to implement it to the best we can.

Natalie Orpett: I had read that one of the justifications that Congress had or the need that it sort of identified for shifting that burden was the fact that it's so difficult to investigate in Xinjiang, for example, in some of these other regions. That despite whatever best efforts you all might have to enforce the rules and investigate you know, reports that you may get of forced labor that if you're just not able to get there to really figure out whether accusations of forced labor are accurate, it makes your jobs very difficult.

And so the shifting of the burden, as you said, sort of kicks it over to those who know their supply chains the best, which is the companies themselves. Does that ring true with you?

Brian Hoxie: Yeah it's and you know, one of the things, this is not a secret that the Chinese government has been controlling information out of China for a long time, and I think that's a challenge that some importers have been having.

It is not a reason for us to allow goods to come in if you're unable to obtain the documents or the documentation that you need to show your supply chains are clear if they do go through China, but maybe they don't touch Xinjiang, that would be admissible. But it is getting more difficult in that respect.

And I think that that's one thing that we are frequently, that people are having challenges with that. So it would track that it is more difficult to get information on China. And then obviously we wouldn't be able to visit tour or work directly in the region.

Natalie Orpett: Right. And there were reports in the news of late that one of the things that China has been doing with respect to these, you know, so called reeducation camps or the areas where people really being forced into labor was that they moved them geographically out of Xinjiang, which seems like it sort of removes from the jurisdiction or the reach of the UFPLA given its geographic focus. So what do you think of that? What do you make of that?

Brian Hoxie: Yeah, that we see that. And for us it is, I didn't talk too much about the UFLPA in terms of enforcement, but let me give you a little context for this.

So if CBP has direct information or information that shows that the goods are coming directly from Xinjiang, like they're exported from a company in Xinjiang, we have the address, we have all the information that's going to be immediately excluded. We will apply the presumption it's not permitted in the United States.

The other piece of that is if, as I mentioned, if there's a supply chain, and so that is a part where we're going to work through, we're going to work with the importers and they're going to give us information and we're going to evaluate that information.

The third piece of it that we didn't really talk to is the role of the Forced Labor Enforcement Task Force, which was established in the USMCA, but then was given more roles in the UFLPA. The Forced Labor Enforcement Task Force, their approach is to manage forced labor for the entire U.S. government. And so it's made up of seven departments and agencies.

We are an observer agency to the FLETF and DHS is the chair and they will evaluate the different criteria that is in the UFLPA for adding entities to the entity list, which is a public list of companies. Now if you look at the four different criteria that are in there, you can source materials, you can buy materials, you can work with different companies, you could be in the region. Those are factors.

But the last one is where there are labor transfers. And if the FLETF finds significant evidence that shows that there are labor transfers out of Xinjiang to different areas in the country, they can add that entity to the entity list. So for CBP, the approach is if we get something on the entity list, which is in our rebuttable presumption section of the law, it says that if we have goods that come directly from the region or on the entity list, we exclude.

So we apply the presumption on any company that is involved directly from the, from companies on the entity list. If we see imports, we'll immediately exclude those imports. And so we've had a couple companies that are outside of the Xinjiang region, and these are, the companies are on the entity list that have been in that category of being involved in labor transfers.

And so while we don't do the work on the labor transfer section, the FLETF is responsible for that. And we coordinate with them frequently on that.

Natalie Orpett: Okay. Yeah, I did want to ask actually about how this, all these efforts intersect with other agencies of the U.S. government. Obviously, there are a lot of pieces of the UFLPA and it is, of course, part of a broader effort, both with respect to economic policy toward China, which I know is a very big question, but also with respect to economic policies and human rights.

So I'm curious, you know, those are both very big topics, but what your experience has been working with other agencies, working with Congress sort of whatever you'd like to comment on with respect to those broader government wide initiatives.

Brian Hoxie: Yeah, I will say in, in from the congressional space, we've had broad bipartisan support and engagement with all a number of different offices and committees on the Hill. And so, we continue to support them and we are ready to meet with them anytime they would like and we have frequently. And also they've been very supportive of us in the budget and we are using those resources very well and efficiently and ensuring that we're enforcing this law well.

In the interagency, we've had an equal amount of support. I can speak a little bit from our perspective. Like I said, is that most of the work happens at the Force Labor Enforcement Task Force, and they are engaged much more frequently. But we do work directly with the Department of Labor quite frequently as well on labor conditions and trying to build a better process for making sure that we can enforce our law, but also modify cases when they, when companies are willing to remediate their forced labor.

In that case, right, we're looking at companies that are accepting that they have forced labor conditions. They want to correct it and reestablish trade with the United States. Our role and position has always been that we are not looking to prohibit countries from trade. We just want ethical trade.

So if you can demonstrate to CBP that you have remediated forced labor conditions in those countries and that the workers now have a voice in their production, then they can, you know, be reestablished, trade reestablished with the United States. And so that's something that we're definitely working with the Department of Labor on, and they've been excellent partners in that respect.

We've had other areas where the engagement with USTR and State Department has been fantastic. Obviously, they have the role on some of the bigger topics that you discussed. And so we support them.

We're definitely, we are in a trade enforcement, that is our role, but we are willing to work with all the other agencies and departments out there to support the U.S. government's positions. Or, and in that we provide technical assistance and best practices, lessons learned to countries that want to increase their enforcement of against forced labor goods, but also, you know, anything the interagency, you know, wants to collaborate with us on we will do. And we've had great collaboration with them over the past couple of years.

Natalie Orpett: That's great. And I'm glad you mentioned best practices, because I wanted to ask about efforts outside of the United States to do similar work. So I had read, for example, that the EU was imposing a ban that is quite similar to the UFLPA.

And I imagine in many other countries as well, there are discussions about this sort of effort to, to just, as you say, address places in a complicated supply chain and a very complicated global trade regime to try to push back on forced labor and similar human rights abuses. So what sort of interactions have you had with partners abroad? What have you seen in terms of those efforts in other countries?

Brian Hoxie: Yeah, the engagement with the EU, we're, we've had a couple, you know, just some early outreach, but we stand ready to help. And like I said, is that if USTR and the State Department are engaged in those conversations early on, and then they want to pull us in then we'll stand ready to help them.

And we'll support any likeminded enforcement country that wants to establish new laws, new procedures, and we'll provide that, you know, our experience from this. In the U.S./Mexico/Canada Agreement we've had some engagement there as well.

So outside of that, I can't really speak to any specifics, but like I said earlier, is that from a customs enforcement standpoint, we are ready and willing to share any best practices. And like really the lessons learned, I think, is probably maybe a little more helpful. Because it has been quite a bit of work and CBP and all the different partners that we work with, we just, we've had a great group of people to collaborate and engage with and integrate this enforcement.

So it's just sharing that information and making sure that we can give them our perspective. But of course, they're foreign countries, they're going to make their own decisions. And like I said, we're in the trade enforcement aspect of it and the customs aspect of it so we don't go outside of that role. And we just, we work with our other agency partners.

Natalie Orpett: Sure. I think I'd be curious to know, you know, what are those lessons learned? Obviously, when some big legislation like this has passed, even if it is building on past regimes and work that's already been going on, the devil's always in the details. The complexities arise when you're actually rolling it out.

So what have you found? You know, what were the early obstacles? What have you found as best lessons learned?

Brian Hoxie: Yeah, I think the one of the biggest, at least from an internal standpoint, is that you can't do this alone. Like, one agency itself can't do it by themselves.

Even within my office, I have a pretty good staff and I have, like I mentioned earlier, as Congress has really given us the resources to be successful. But this is not just a Office of Trade perspective, it's a full CBP effort. And we need all offices and everybody to be on board and work together and integrate across that mission space.

The other connection to that, you know, you mentioned about the interagency is that we also can't do without the interagency. I think that if, you know, I had to give advice, and I have given advice, like one of the questions was when I was up in Canada is what would the advice the Canadian government be from your perspective, on the same question you asked.

I said, is it, you know, you've got to integrate with everybody across your government and make sure that this is a whole government approach because there's a number of areas where it's either outside of our expertise or we don't have the capacity to work that particular issue that it is, has been very helpful to have, you know, the support of our interagency.

I guess another lesson learned on this one is really engaging the trade early and making sure that we have good engagement with businesses and the importers. And we've done hundreds every year. I would say last year we had 300, before that we had 500. This year we're probably going to be around 300 again of engagements with different stakeholders and sharing information, making sure that they understand what the law means, how it's applied, answering questions, providing them information and guidance.

You know, going back to what you said about the rebuttal presumption, right? This is a new process. This is a new way of, oh, wow. There's another aspect to trade enforcement now. And so making sure that they're aware of what the changes are, how it's going to affect their business models, making sure they understand what the effects of a potential enforcement action are has been really essential.

And on the flip side is getting feedback from them, trying to understand what they're experiencing, looking at ways that we might be able to help on the facilitation side, because CBP has a dual role, right? We have to enforce the trade laws, but we also want the good stuff to get in unfettered because we don't want to slow down trade because it affects overall affects our economy.

Natalie Orpett: What has been your sense of the impact this has had on companies? I mean, I know this is a bit of a rolling target because of course they had previous obligations to do due diligence in their supply chains, for example. So many of them will have caught, you know, before the existence of this law, problematic parts of the supply chain and in Xinjiang in particular.

But did it turn out that companies did have to take a lot of action? Were they needing to move business around? To the extent you have a sense of that, I'd just be curious what this looked like from the company's perspective.

Brian Hoxie: I don't know if I have really the inside knowledge and where it would be appropriate to share that.

But I think, like I said earlier, what we are seeing is that people are able to comply that they have been able to show up with the documentation when necessary. I think that our engagements with companies has been very good and that we've gotten a lot of feedback from them and understanding. And I think that like we said, is the engagement is really key.

So we have seen, you know, compliance and eagerness to comply, and I've never, I haven't met a company yet that isn't completely lockstep on this and saying, you know, we don't want forced labor in any of our stuff, and we want to make sure we're doing this right.

So, we will help where we can and provide guidance where we can and get feedback and continue to make this law more, the implementation as efficient as possible.

Natalie Orpett: What do you think the future is going to look like for this? You know, it seems like reporting from China suggests that this problem is not going to go away any time soon from their perspective, but what is going to be the future of the usefulness of this sort of legislation and this act in particular?

Brian Hoxie: I think the big thing is we don't see this changing because of the impact that it has on U.S. businesses. I think that there's obviously a huge ethical concern here, right? We're looking at, people are using forced labor as defined by the ILO and some of these conditions and vulnerability of people as an economic advantage.

And I think that sometimes that gets lost in the discussion. It probably doesn't get lost on businesses who are competing with companies who are using forced labor. So I think that, you know, from that perspective it's interesting to just make note of it is that it's not so much it's ethical trade that we're looking for, which means fair, ethical trade, right?

And when people are being paid less, when they're not being paid at all, when they're, we're in conditions where a company can benefit from that, there is the economic impact to our producers. And that is not unlike, you know, a lot of our other trade enforcement programs that we have that make sure that we have a fair playing field for our businesses and our manufacturers that can compete. And I think that you know, that's one area where we see come up again and again on this one and so just that's one area I would want to note.

I guess another area I want to note is that for the future of where we're headed, I think that, you know, in the next year, we're looking at continuing to enforce in our WROs and our findings. We've been really working hard on that one most recently, and we have issued two actions in the past couple of months. And one actually two days ago, so we issued a finding two days ago.

And we're going to continue that work that is still important. And we're going to strengthen that process. Our engagements are going to continue and companies should continue to reach out to our different trade relations offices and other, others that can help us continue to engage with the public in the trade. And we're willing to do that.

We're also looking at the information that we provide on our website. We've been, we, I've been told that it's pretty good. And we want to make it better. So we want to continue providing guidance and make sure that people can get to the information that they need. We just went through a website redesign and we're trying to get that information to the public as well.

And working on more ways to communicate more efficiently with our importer community and our trade communities. So we're taking a lot of action. So I guess the short of it is a lot of this work is not showing slowing down at all. And we're going to continue on working in this space to make sure that we can provide the information that the importer community needs, but also to make sure that we have ethical trade flowing through the United States commerce.

Natalie Orpett: All right. I think that's a great place to leave it. Brian Hoxie. Thank you so much for joining us.

Brian Hoxie: All right. Thank you so much.

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