Vandegrift Blog: Trade Abuzz by Janet Labuda

Over the past few days, most trade publications and law firm daily releases have been abuzz with the increased emphasis by CBP on combating forced labor. I have written a number of blogs, over the last year, alerting my readers to this issue. According to the recent CBP publication “Frontline,” CBP’s air, land and seaports processed more than 33 million imports last year.  Shirts, shoes, lumber, electronics, dishes, eggplants, squid, coffee, bricks and soccer balls are just a sliver of the commerce, worth a mind-boggling $2.4 trillion, making the U.S. the world’s second largest importer behind the European Union. 

While trade is more robust than ever, CBP cautions importers to be watchful about the source of their merchandise. Importers receive their commodities at the end of long supply chains that can originate anywhere in the world—in many cases regions where oversight is lax or even nonexistent. Such conditions tempt some manufacturers, miners, commercial fishermen, farmers and other producers to squeeze more profit from their businesses on the backs of laborers, some as young as 5 years old. 

Lured by fraudulent promises and tantalizing offers, these workers soon find themselves trapped into toiling long hours for a pittance in harsh, many times dangerous jobs. CBP combats forced labor mainly through tips from the public, stakeholders and other agencies since goods made by forced labor look the same as legitimate shipments. Ultimately, “it’s up to the importer to ensure their goods comply with the law.”

Keeping this at the forefront of sourcing plans, companies need to build a credible plan to combat forced labor. This includes,

  • Creating corporate internal controls to articulate the precautions that are being taken across the supply chain;

  • Developing training for all corporate officials, including department heads, and manufacturers/suppliers;

  • Establishing strict contract provisions with manufacturers, suppliers, buying and transporters that strictly prohibit the use of forced labor anywhere in the production or transportation chain;

  • Monitoring all forced labor websites and resources for updated information. This should be done on a regular basis and the data gleaned should be used to assess areas of possible corporate vulnerability.

  • Sourcing departments should be reaching out to buying agents, manufacturers and producers and asking what steps are being taken to ensure that forced labor hasn’t permeated the supply chain.

Remember, having a coffee table document that looks impressive is meaningless unless there is a comprehensive plan that is implemented effectively. As CBP states, it is the responsibility of the importer to ensure compliance.

Please contact Vandegrift for a complete compliance analysis.