Brian Hoxie, director of the forced labor division at U.S. Customs and Border Protection’s (CBP) Trade Remedy Law Enforcement Directorate, says this so much he isn’t sure if it’s even a joke anymore.
“I like to say that everything seems to be forced labor,” he said at the United States Fashion Industry Association’s Apparel Importers Trade & Transportation Conference in New York City last week. “It’s textiles, it’s de minimis, it’s just taking a pick of what product it is—there’s some kind of connection to forced labor.”
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It’s also CBP’s job to take enforcement action on risks in the supply chain, wherever or whatever they may be, though the agency has also been “actively” working on increasing the amount of visibility it’s able to give importers who are wrestling with applicability reviews on detained shipments on those fronts, Hoxie said.
“Now, we can’t tell you it’s company XYZ, but we can tell you that it’s in this particular area of the supply chain—that’s where we’re seeing some risk [and] you need to figure out how to address that,” Hoxie said. “We’ve always maintained that the whole point of forced labor [enforcement] is not to prohibit trade; it’s to encourage ethical trade.”
With the Uyghur Forced Labor Prevention Act, or UFLPA, now in its third year of enforcement of targeting goods from China’s Xinjiang region, Tasha Reid Hippolyte, deputy assistant secretary for trade and economic competitiveness at the Department of Homeland Security, feels no small degree of vindication.
“I think there were a lot of skeptics in terms of would we be able to implement it? Would we be able to enforce the rebuttable presumption? Would we be able to even add entities to Entity List, and will we completely just shut down trade?” she said. “So to that, three things: One, we’ve been able to add additional entities; two, we’ve seen an uptick in what CBP has been able to enforce; and three, we have not completely shut down trade. So that’s a really positive thing. And in two years, we’ve learned a lot.”
One of those learnings is that transparency and information sharing are critical to facilitating enforcement, Hippolyte said. So is eradicating some of the pain points that stymie engagement with a priority industry like textiles and apparel. Of the nearly 80 names on the UFLPA Entity List, for instance, half relate to the sector. Continuing to expand that list—and, in time, including items of interest such as Chinese names and physical addresses—will remain important to “reinforce” transparency for the trade community and supply it with the drumbeat of things it’s been asking for, she added.
“It is so important for us to hear where those issues are because we are truly listening,” Hippolyte said, adding that the UFLPA dashboard, which tracks detentions by sector, value and country of origin, arose from some of those conversations.
Tools of the trade
Coming soon in that vein is a new forced labor portal, which Hoxie describes as a “one-stop area” for importers who want to submit applicability reviews. Instead of dispatching email after email, companies can simply upload their documents. The tool’s arrival is as close as you can get when tackling bureaucratic red tape. One of the frustrating things when you work in government, Hoxie said, is that there are “like 40 different steps” just to launch a website. “We’re on step 38, 39.”
Hoxie said that it’s important for CBP to continually share information, whether through webinars, website guidance or industry conferences such as this.
“I want to focus not just on this is what the UFLPA does, here’s how we enforce it,” he said. “Let’s start talking about some of the small and medium enterprises that may not be able to buy these software programs, that may not be able to have a full team dedicated to supply chain tracing. So we’re going to try to get as much information as possible and organize that in a way that people can find it useful to do due diligence at any level that they’re capable of, because any amount of due diligence is important.”
A few hours before he made his way on stage, the agency released a guide to isotopic testing, a chemical forensics method that is becoming increasingly central in efforts to identify the geographic provenance of potentially problematic materials—cotton, in particular. While CBP cannot recommend specific isotopic test providers, the document provides considerations for choosing one based on accreditation and testing methods.
“We’ve worked on this for several months now, and it is a question we constantly get asked: ‘So, isotopic testing, I’m going to buy this very expensive, very long test to do this thing. Is this what you want?’” Hoxie said. “We worked with our laboratory scientific services, we worked with private sector labs…and we also got industry input. [We] just spent a lot of back and forth to make sure we give you something that is useful.”
While all these are just suggestions, following CBP’s guidance will help more than it will hurt. At the same time, a cotton test alone, no matter how definitive its result, will not be enough to secure a release of cargo.
“You still have to go through your supply chain traceability,” Hoxie said. “It’s going to make your tracing documentation that much stronger, but one test by itself is not going to clear the cargo.”
This is one of the questions CBP answers in the guide’s FAQ section. Another is whether CBP does its own testing. It does, but only on a limited basis where it identifies risk. (Translation: Don’t ship stuff to customs and say, “Hey, can you do a test for me,” he said.) Isotopic testing is also not a legal requirement, Hoxie said. Nor should it be considered more than one component of an importer or manufacturer’s supply chain tracing and risk management program.
Companies need to continually evaluate risk because flagging forced labor isn’t going to be a “yes/no kind of thing,” he said. “It’s going to be a risk mitigation strategy and making sure you do your due diligence.”
The little things
CBP needs additional help from Congress to be able to do its job, said Felicia Pullam, executive director of the Office of Trade Relations at CBP’s Office of the Commissioner. It was a “big deal “when the number of shipments making their way into the United States through the de minimis trade exemption hit 1 billion in fiscal year 2023. And while 2024 isn’t over yet, estimates project somewhere in the neighborhood of 1.4 billion sub-$800 packages.
“That’s something where we do need changes to happen to be able to handle this,” she said. “So we are very optimistic and very supportive of the dialog that’s happening right now on Capitol Hill. I know there’s a lot of congressional interest in that issue, and the administration was very supportive of that, too.”
Pullam said there are tools the agency can improve to allow it to collect more information from the right parties. Third-party sellers and online marketplaces like Shein and Temu didn’t exist when many tariff classifications were set in 1993. Tacking on something like a $2 fee to de minimis items or increasing penalties on “loophole” violations could help CBP invest in scanning technology or increase the personal resources it needs to handle these overwhelming volumes. The Biden administration is also working on new rules to exclude certain shipments, such as those subject to Section 301 tariffs, from the exemption.
This would be particularly apt for the holiday season, since the “entry of low-value shipments” is being called ELVS (pronounced “elves”) for short, though she “can’t take credit for that,” Pullman said.
At the same time, there are limits to what CBP can do under the law, such as with recycled materials that might fall under the UFLPA because a portion of their blended fibers might have hailed from Xinjiang.
“The simple answer is, I implement the law, I don’t make the law,” Hoxie said. “It’s not my favorite but it’s true. And in this space, we’ve really gone over the law as much as we can, and there’s no exception for recycled materials. And so that’s the guidance we’ve been given from the legal department. It’s not something that we can change through policy or regulation.”
It’s not only cotton that’s affected but also aluminum, which is also heavily recycled, he said. What CBP cares about is whether importers or manufacturers can trace those materials to their source, which is more likely the case for post-industrial versus post-consumer textiles.
Still, CBP has been talking to organizations such as Accelerating Circularity to look for possible solutions that could help, rather than hinder, the green transition.
“I think that helped with setting a base level of understanding about what is recycling and what are different options with recycling?” Pullam said. “And then, what can we build so that we’re compliant with the law, but we also are not sending a negative message about recycling?”
