International Trade > AG Trade Law > CBP Updates Regulations to Eliminate Consumptive Demand Exception to Prohibition on the Importation of Goods Made with Forced Labor
08 Jun '17

On June 8, 2017, Customs and Border Protection (CBP) published a final rule that removes the consumptive-demand exception from its regulations that implement the prohibition on the importation of merchandise that has been produced by convict, forced or indentured labor in Section 307 of the Tariff Act of 1930, as amended (19 U.S.C. 1307)(“Section 307”). Prior to the passage of the Trade Facilitation and Enforcement Act of 2015 (TFEA) in February 2016, Section 307 contained an exception that allowed for the importation of merchandise produced with forced labor if the goods were not produced in sufficient quantities in the United States to meet the consumptive demand of the United States. CBP’s final rule updates CBP’s regulations to reflect the TFEA’s amendment of Section 307 to eliminate the consumptive-demand exception.

CBP’s final rule clarifies that CBP has been enforcing the ban since its effective date on March 10, 2016, and the final rule simply updates CBP’s regulations to reflect the statutory amendment to Section 307. There was previously speculation that CBP would implement additional changes to the Section 307 enforcement procedures in Section 12.42 of the CBP Regulations. However, CBP recently indicated it needs additional experience investigating allegations and validating information provided by importers about their suppliers and supply chains before it will be ready to amend the process. Instead, the final rule contains only one minor procedural change that allows importers who are contending that merchandise was not produced with forced labor to submit proof of admissibility of merchandise to Port Directors, in addition to the Commissioner of CBP.