On June 24, 2021, U.S. Customs and Border Protection (CBP) issued a Withhold Release Order (WRO) against Hoshine Silicon Industry Co. Ltd. – a silica manufacturing company located in China’s Xinjiang Uyghur Autonomous Region (XUAR) – and its subsidiaries on the basis of forced labor in the entity’s manufacturing practices. The WRO instructs CBP personnel at all U.S. ports of entry to detain silica-based products as well as materials and goods derived or produced from silica by Hoshine and its subsidiaries. During a press conference held today, CBP indicated that direct imports of these products over the past 2.5 years accounted for approximately $6 million dollars. Notably, the WRO would also apply to polysilicon, which is a derivative of silica and a major component in solar panels, electronics, and other related goods. CBP indicated that downstream products accounted for approximately $150 million dollars of imports over the last 2.5 years.
The WRO was issued after an investigation into silica-based products imported from the Xinjiang region identified the following 2 of 11 possible indicators of forced labor in the company’s production process:
- Restriction of movement
- Intimidation and threats
This WRO is the latest in a continued series of actions from the United States to exclude goods suspected of utilizing forced labor from its supply chains. CBP’s forced labor investigations have produced six WROs in Fiscal Year 2021 – including a WRO on cotton and tomatoes from the entire Xinjiang region and another against Chinese fishing fleet Dalian Ocean Fishing Co., Ltd. Additionally, 8 of the 13 WROs issued in Fiscal Year 2020 were on products made by forced labor from China.
WROs are issued by the U.S. government when information reasonably but not conclusively indicates goods were made in whole or in part using Forced Labor. Merchandise detained under a WRO order must be exported immediately or a substantial submission made that provides specific information showing that the goods were not made with forced labor. To obtain a release of any shipment that has been subjected to a WRO, a certificate of origin along with this detailed statement regarding the merchandise’s production and supply chain origin must be submitted to CBP. Currently, there is no standard of review for CBP to use in evaluation these submissions and CBP makes a determination on a case-by-case basis. However, pending legislation (H.R.1155 – Uyghur Forced Labor Prevention Act), if passed, proposes a clear and convincing standard of review similar to CAATSA Section 321.
The Press Release is available here.
For more information on actions addressing WRO submissions, social responsibility, and forced labor audits, contact our team and see previous posts below.