Are US Companies Starting to Feel the Repercussions of New Anti-Slavery Regulations?

Jul 13, 2016 3:45 PM ET

For decades, the US border customs agents have overlooked section 307 of the 1930 Tariff Act, which prohibited goods from entering the US made with the use of forced labor. Earlier in 2016, President Obama signed the Trade Facilitation and Trade Enforcement Act of 2015. Before the Trade Facilitation Act, US border customs agents had overlooked section 307, as long as domestic production could not meet the demand for the imported products to the US. While there is much still in the air about the exact enforcement terms, companies are now starting to feel the repercussions of poor visibility into their supply chains, through the new Trade Facilitation Act.

According to Baker & Mckenzie, it has yet to be determined how deep in the supply chain section 307 will affect. Section 307 may apply to several tiers of companies supply chains, or may apply only to direct suppliers, but this brings to light a larger issue. Companies who are not in control of their supply chains, or do not have adequate visibility into several tiers of their supply chain may run into serious trouble as section 307 moves forward.

Baker & Mckenzie went on to highlight that q1 and q2 of 2016 saw a “resurgence of section 307 enforcement actions,” and in the past four months, there have been 3 withhold release orders for products entering the US without proper anti-slavery identification.

Border agents are cracking down and demanding more information about products origins. Companies with international supply chains should be aware of these recent developments, and dedicate resources to anti-slavery efforts to ensure their products are ethically sourced and don’t have any issues entering the US. There are many resources companies can use when looking into this matter. Source Intelligence teamed up with for a recent webinar to breakdown emerging forms of Modern Day Slavery, and best practices behind mitigating slavery in the supply chain. To see the webinar on demand, click here. There are also many resources on the Source Intelligence website including other webinars, and whitepapers that break down industry specific guidelines. Also, be sure to check out the Source Intelligence blog for updates on regulations and industry news.