Uyghur Forced Labor Law Faces Formidable Opponent With De Minimis Rule In Place, Homeland, Customs Tells House Hearing

The roughly two-year-old Uyghur Forced Labor Law (UFLPA) may be pushing a boulder uphill thanks in large part to the de minimis provision that allows for $800 of duty free shipments from around the world to enter the U.S. Those packages do not face the same scrutiny as those coming in from formal entry.

Christa Brzozowski, the Acting Assistant Secretary for Trade and Economic Security Policy at the Department of Homeland Security, called it a “complex environment” to weed out contraband and forced labor goods coming in through de minimis. “We do the best with what we have,” she said.

Customs and Border Protection’s (CBP) Trade Remedy Law Enforcement Director, Eric Choy, echoed Brzozowski, adding that the “challenge of de minimis is the lack of information we have on what is in the packages compared to formal entry shipments. We are trying to understand who the main shippers are and trying to introduce new ways to file entries for de minimis and once we have that figured out we will be able to better stop forced labor shipments via de minimis,” he told the House Homeland Security subcommittee on Oversight, Investigations and Accountability in a hearing on Jan. 11.

“There are massive increases of goods that come in through this exemption and some suspect that that becomes a huge way to evade the UFLPA. Are e-commerce platforms the biggest driver of de minimis shipments?”

-Chairman Dan Bishop (R-NC-9)

“It is a challenging environment for our folks at the border and we have seen an exponential rise in de minimis packages. There are a lot of reasons why. We are working extremely hard to enforce our forced labor laws in de minimis packages, but that part of our job is more challenging because of the limited amount of data we have on those packages.”

-Christa Brzozowski

“De minimis undermines the CBPs ability to detect contraband and goods made using forced labor.”

-Rep. Dale Strong (R-AL-5)

Judging by the hearing, textiles were the biggest problem for policing forced labor, including in apparel imports believed to have been made with banned cotton from Xinjiang, China.

Other than the UFLPA, Customs also has Withhold Release Orders (WRO) on at least three particular goods sourced from Xinjiang – polysilicon used in the manufacturing of solar cells; tomatoes and its derivatives; and cotton.

In 2022, Bloomberg did an investigative report together with a lab in Germany that said randomly chosen packages of clothing items purchased from Shein, a Chinese fast fashion retail giant, contained banned cotton. The U.S. textile industry has been asking Customs to conduct isotopic testing similar to what the German lab did for Bloomberg at ports of entry for textile and apparel. One is now up and running in a port in Savannah, Georgia, with two more expected to be operational this year with both equipment, engineers and scientists who know how to read the results of isotopic tests, Choy told Committee members.

Ranking Member Glenn Ivey (D-MD-4) recognized that the textile industry was hot on this subject, and has been documenting harms.

Choy said that textiles “are a focus for us; it is a priority trade initiative and we continue to identify targeted candidates, do verification visits and cargo inspections.”

This response was not enough for Chairman Bishop who said their job was daunting and that the fact some 80% of all China’s cotton is grown in Xinjiang, and given the amount of textiles and apparel and bed and bath coming in from China, even through formal entry, the flood of goods to inspect was “striking”.

Bishop seemed to be new to the top of de minimis, and like Ranking Member Ivey, expressed concerns that the UFLPA law was falling short of preventing forced labor goods from entering the U.S.

One area of interest by Committee members: seafood from China and Asia more broadly.

Shrimp boats shrinking in the Gulf, but rising in Asia.

Rep. Mike Ezell (R-MS-4) from Mississippi talked about fishermen and shrimpers being impacted by forced labor aboard some of China’s fishing fleets. He suggested forced labor laws do not apply to those players.

“The allegations of forced labor use in fishing is something we are taking seriously, and we are looking into whether we are going to add seafood and seafood companies to restrictive lists,” Thea Lee, Deputy Undersecretary of International Affairs at the Department of Labor said. She noted that her department – the Bureau of International Labor Affairs – is looking into the regulatory tools it has at its disposal to see if Uyghur laborers are being used on those ships to process seafood sold here.

Ezell said the situation requires seafood imports be given a “high priority” status. “Do you agree? How fast can we move on this?”

The U.S. is a net importer of seafood.

Lee said she was looking into whether seafood could be classified as a high priority area, but added “there is nothing stopping Homeland from doing something about it right now. I think it is a high priority.”

CBP has not issued any WROs in 2023, and has not had any additional action on seafood since Jan 2022.

“CBP does take these allegations in seafood very seriously,” Choy said. “We have WROs against a fleet of Chinese vessels already. We have been in close contact with other stakeholders involved; where we find violations of the law, we will enforce.”

Ezell made the case for urgency.

“Growing up on the Mississippi Gulf Coast in shrimp season you’d go down to the docks and get fresh shrimp and now those guys are being put out of business because of imports and I need your help,” Ezell said. “I need a commitment that you will do all you can to get this situation reversed.”

Ivey followed up and asked what happens when a seafood shipment is detained by CBP for suspicion of forced labor by the exporter?

Choy explained that the importer of record has 30 days to submit a response if their product is captured by Customs. But that “it is up to the importer to decide whether to make their case that the goods purchased are clear of forced labor, or re-export that product to some other country,” he said.

Ivey scratched his head on that one. “So it goes to some other country and the seller and importer would then keep the opportunity to profit from the forced labor that we identified, is that right?” he asked.

Choy responded in the affirmative.

“Allowing them to go to a Plan B and get the same amount of money doesn’t send the message. I think this is what we got from the textile testimony on this in the past,” Ivey responded, explaining the textile industry’s take to the Committee and three witnesses. “To them, if the foreign companies just keep pushing masses of product into the country and only a little gets caught in the dragnet and they can just turn around and sell what’s been seized to some other market, then it seems to me we are not using our tools sufficiently enough.”

Brzozowksi said the U.S. needed partner countries on this who will not except seized goods, or the U.S. is working against itself with re-exports as an option. She did say that the private sector in the U.S. is shifting supply chains to avoid questions and allegations of forced labor in its supply chains. “This is a good thing. Thanks to this law, that is happening,” she said.

Government working on adding more companies to the entity list.

Chairman Bishop said the UFLPA Entity List is too small and more names needed to be added.

“I agree that we need to scale that,” Brzozowski responded. She is new to her position, having been hired in December. She was a senior manager of public policy at Amazon prior to taking on this role. “I’ve been focused on setting up a methodologically sound process (to go after forced labor in the supply chain) and now I’m confident we can move much quicker. Ramping up the Entity List is a demand signal to tell importers that they need to be compliant and if not there will be repercussions and they will be severe. It’s the right thing to do to combat forced labor and it has an economic benefit for us as well.”