Lars-Erik Hjelm Quoted by Bloomberg on New Forced Labor Statutes

Akin Gump international trade partner Lars-Erik Hjelm was quoted in the Bloomberg article “Customs Importers Should Keep Watchful Eye on Supply Chains,” which reports that some importers run the risk of detention of goods as well as reputational harm if their products are suspected of being produced with forced labor.

Under a recently enacted law, imports made with forced labor are no longer allowed into the United States. An earlier loophole allowed such imports in order to meet consumptive demand.

Hjelm said China has historically been the focus of enforcement under the statute, but past enforcement is not a guarantee of what will happen in the future. He cited the example of a recent petition filed by Alternative Turkmenistan News and International Labor Rights Forum targeting the import of cotton goods from Turkmenistan, the world’s seventh largest cotton exporter.

There is a recourse process, Hjelm said, that allows importers to challenge a decision by U.S. authorities not to allow goods into the country. If the importer is unsuccessful, however, it could lead to seizure and forfeiture as well as damage to one’s reputation.

As for how clear the newly amended statute is, Hjelm said, depends on “which side of the fence you sit.” Those advising importers who might be caught in the cross hairs of an investigation favor keeping the current regulations intact, he said, as the regulations put a high degree of the burden on Customs officials. On the other hand, Hjelm noted, U.S. Immigration and Customs Enforcement could amend its regulations to implement a more liberal standard that would please non-governmental organizations and human rights organizations.

“Clearly Customs could change the regulations,” Hjelm said, adding that importers may challenge any attempt to change the due process considerations in the current regulations. He added that Customs is due to issue a report on enforcement of the new statute this month.