U.S. Customs and Border Protection (CBP) has issued their first penalty for imports made with forced labor since the passage of the Trade Facilitation and Trade Enforcement Act of 2015. CBP has collected $575,000 in penalties, after the closure of a civil enforcement action against stevia sweetener importer, Pure Circle U.S.A., Inc., per CBP press release.
What Did Pure Circle Do?
Pure Circle U.S.A. Inc. imported stevia processed in China by Inner Mongolia Hengzheng Group Baoanzhao Agricultural and Trade LLC (“Baoanzhao”). An investigation began after allegations came from a Non-Governmental Organization, which lead to CBP issuing a Withhold Release order (WRO) in May 2016.
During the investigation, CBP obtained evidence that confirmed Pure Circle U.S.A. Inc., “had at least twenty shipments of stevia powder and derivatives produced from stevia leaves, that were processed in China with prison labor violations of U.S. law.”
Under the Tariff Act of 1930, CBP has the authority to issue civil penalties against those who import or attempt to import goods that do not comply with U.S. law. This civil penalty is a part of CBP’s continued efforts to prevent goods made with forced labor from entering the U.S.
Best Practices and Responsibility for Importers
CBP provides information on forced labor on their website, which contains instructions and guidance on the topic. Helpful resources include:
- Responsible Business Practices on Forced Labor
- Forced Labor Process Map
- Forced Labor Due Diligence Fact Sheet
- Forced Labor Frequently Asked Questions
Importers must take an active role in protecting their supply chains to prevent forced labor violations and civil or criminal prosecution. Your company should have a comprehensive and transparent social compliance system in place as a best business practice to ensure ethical supply chains. Taking these actions will help to protect your business and supply chain.
For further guidance on developing or enhancing a social compliance system for your company or managing risks of incurring forced labor violations, contact Mohawk Global Trade Advisors.