China maintains a network of prison labor facilities that use forced labor to produce goods for export, according to a report recently released by the US-China Economic and Security Review Commission. That practice is a violation of US-China trade agreements and United States law, the report notes. The US faces difficulty combating forced-labor exports thanks to a low level of cooperation from the Chinese.
US Immigration and Customs Enforcement (ICE) agents have not been permitted to make site inspections in China since 2009, according to the report and Chinese officials routinely deny that forced labor is occurring, claiming the factories in question do not exist or that they do not make the products in question.
The Trade Facilitation and Trade Enforcement Act (TFTEA) of 2015 strengthened the authority of US Customs and Border Protection (CBP) to bar Chinese prison labor products from US markets primarily through the elimination of the “consumptive demand” exemption in the Tariff Act of 1930 which speeds the process for issuing a withhold release order (WRO) for products made with forced labor.
The Tariff Act of 1930 defines “forced labor” as “all work or service which is exacted from any person under the menace of any penalty for its nonperformance and for which the worker does not offer himself voluntarily.” The consumptive demand exemption stated that importing goods produced in a foreign country by convict labor or/and forced labor is prohibited unless the type of goods in question “are not produced or manufactured in such quantities in the United States as to meet the consumptive demands of the United States.” CBP may issue an order to withhold release from CBP’s custody of any goods that are suspected of having been produced with forced labor.
Since the TFTEA entered into force, four WROs have been issued against Chinese companies. These WROs were the first to be issued against Chinese companies since 1996, according to the report, and two of the companies in question appear to have since closed.
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