Santos Discusses Increased Customs Enforcement of Forced Labor Laws on CNBC’s “Last Call”

Partner Angela Santos discussed the impact to businesses from increased enforcement by US Customs & Border Protection of forced labor laws under the Uyghur Forced Labor Prevention Act, which prohibits the import of goods produced or sourced in the Xinjiang region of China.

Angela said, “I’ve spoken to executives, CFOs, CEOs, and also their investors and their boards because they’re concerned about this. These forced labor laws could cost companies millions of dollars between preparing and conducting the due diligence and hiring new staff to handle this.”

She added that she deals with forced labor issues every day, with some clients having received detentions. 

“They just don’t know if their supply chain includes goods produced with forced labor,” she said. “With regards to addressing the detentions, it can be extremely expensive and time consuming to get goods released.”

Angela noted that when goods are detained, companies receive limited information from customs officials.

“Often the company does not know how problematic the material or level is,” she said. “A company needs to provide chain-of-custody documents for every single tier of the supply chain.”

Historically, companies generally only had relationships with their first-tier suppliers, so acquiring “chain-of-custody documents” is challenging. 

“It is a huge burdensome task for companies and can be really problematic for small- and medium-sized companies that don’t have those kinds of resources,” she said.

However, Angela said that pulling out of China is not the answer.

“Many companies are still reliant on China for their supply chain. China is not the only place where forced labor is allegedly occurring,” she said. “So, shifting out of China may not be the solution for everybody.”

Read the full article here. Watch the video here.


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