Senate Closes Loophole on Forced Labor Tied Products

Last week the U.S. Senate voted to close a loophole in the Tariff Act of 1930. This act bans goods that are produced by convict, forced or indentured labor from being imported into the U.S. Yet for more than eight decades a “consumptive demand” loophole…

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February 16, 2016
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Last week the U.S. Senate voted to close a loophole in the Tariff Act of 1930. This act bans goods that are produced by convict, forced or indentured labor from being imported into the U.S. Yet for more than eight decades a “consumptive demand” loophole allowed companies to import goods, regardless of how they were made, as long as domestic production couldn’t meet the demand.

This vote puts an end to this exception. Company goods linked to forced labor can now be turned away at U.S. points of entry. How Customs and Boarder Protection will enforce this change remains to be seen, but companies should be on alert.

As highlighted in our recent transparency report, traceability and chain of custody are important considerations for any company operating globally and eager to prevent forced labor. Undoubtedly, multinational companies will be searching for new tools and methods to ensure they can verify the origins of the products they are importing into the U.S. Only through their own verification and validation efforts will they be able to protect their brands and reduce their risk.

This recent move by the U.S. Senate is yet another example of how governments are taking the issue of forced labor in global supply chains seriously and companies should too.