CBP Ruling Finds Auditor Report Is Insufficient to Show No Forced Labor Used

An importer of garments that were detained by CBP due to the suspected involvement of North Korean nationals in the production was unable to sufficiently show forced labor wasn't used, CBP said in a recently released ruling dated March 5. The use of North Korean labor is considered to be forced labor under the Countering America’s Adversaries Through Sanctions Act (see 1711070046). The ruling marks the first one directly focused on forced labor since 2002 (see 2001070033), according to CBP's rulings database.

Poof Apparel made two entries in December last year of garments and textiles made by Dandong Huayang Textiles and Garments Co. and both were detained at the Port of Newark, New Jersey, soon after, CBP said. “On January 8, 2021, CBP requested that Poof submit updated responses to the CBP Form 28 questions Poof had previously submitted to CBP in 2017 as well as documentation detailing how Dandong Huayang employees are recruited, identification cards and payroll records or other proof of payment,” it said. “Poof submitted this information requested by CBP on January 14, 2021. The port excluded the entries on January 22 and 26, 2021 as prohibited merchandise.” The company then “protested the exclusion of the two shipments requesting accelerated disposition of its protest and [application for further review].”

The CAATSA and forced labor statute requires “clear and convincing evidence” to prove to CBP that forced labor is not being used in production, CBP said. “Accordingly, an importer who wishes to import merchandise that is subject to the rebuttable presumption under CAATSA Section 321 carries the burden to overcome the presumption by providing information that meets the clear and convincing standard,” it said. The importer provided to CBP “a Worldwide Responsible Accredited Production (WRAP) report which has determined that the manufacturer, Dandong Huayang, uses Chinese nationals and photocopies of employees’ Chinese (national) Resident Identity Cards,” the agency said.

CBP was skeptical of the report's conclusions “considering the auditors only interviewed 10 out of the 49 workers during the audit,” it said. The report also included inconsistences between it and the protest at CBP, the agency said. CBP also noted that some pictures provided to the agency include pictures of boxes of personal protective equipment. Those boxes are “identical to images of PPE boxes featured in The Guardian’s November 2020 exposé of North Korean forced labor used in Dandong Province factories in the production of PPE coveralls,” it said.

As additional evidence, the company “provided photocopies of the Dandong Huayang workers Resident Identity Cards, which indicate the [workers’] ethnicities as Han or Mongolian,” CBP said. “As these ethnic designations are only for Chinese citizens, the protestant argues that the workers cannot be North Korean nationals. The majority of the photocopies of the worker’s identification cards are either too dark or overexposed to be able to discern the authenticity of the cards.” CBP denied the protest because the company didn't establish “clear and convincing evidence that the detained garments, manufactured by Dandong Huayang, were not produced with forced labor,” the agency said.