RES-1-00-OT:RR:BSTC:CCR H318182 GFM
Donald R. Kusser
Port Director, Los Angeles/Long Beach Seaport
U.S. Customs and Border Protection
301 E. Ocean Boulevard
Long Beach, California 90802
RE: Application for Further Review; 19 U.S.C. 1307; Denial of Protest No. 270421154598;
Uniqlo Co., Ltd.; Entry 231-2840311-6; Xinjiang Production and Construction Corps; XPCC; [ ] Withhold Release Order; WRO; Forced Labor.
Dear Mr. Kusser:
This is in response to correspondence received by U.S. Customs and Border Protection ("CBP") from the law firm of Grunfeld, Desiderio, Lebowtiz, Silverman & Klestadt, concerning the detention and exclusion of certain shipments of cotton men's shirts. Said correspondence was forwarded to this office on your behalf by the Trade Remedy Law Enforcement Directorate (TRLED), Office of Trade, U.S. Customs and Border Protection ("CBP"), for our further review of the above-referenced protest and application for further review. Our decision is set forth below.
On January 5, 2021, the Port of Los Angeles/Long Beach ( "the Port") detained a shipment of cotton garments imported by Uniqlo Co., Ltd. (Uniqlo) for violating CBP's Xinjiang Production and Construction Corps ("XPCC") Withhold Release Order (WRO) which prohibits the importation of all cotton and cotton products produced by the XPCC, and its subordinate and affiliated entities, as well as any products that are made in whole or in part with, or derived from, that cotton, such as apparel, garments, and textiles.
On March 30, 2021, Uniqlo submitted a brief in response to CBP's Notice of Detention which was considered by the Port. In its April 9, 2021 response, the Port notified Uniqlo that the subject cotton garments would be excluded and that Uniqlo had 60 days from the date of that letter to export the subject merchandise from the United States under CBP supervision in accordance with 19 C.F.R. 18.25-18.27. The Port noted that if the merchandise was not exported within 60 days, it would be disposed of under CBP supervision.
In response to the exclusion, on April 19, 2021, Uniqlo filed a protest with request for an Application for Further Review (AFR), which was submitted to this office on April 23, 2021.
Whether the detained cotton garments at issue are subject to exclusion under the XPCC WRO.
LAW AND ANALYSIS
Title 19, United States Code, 1307 (19 U.S.C. 1307), provides, in pertinent part:
All goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in any foreign country by convict labor or/and forced labor or/and indentured labor under penal sanctions shall not be entitled to entry at any of the ports of the United States, and the importation thereof is hereby prohibited, and the Secretary of the Treasury is authorized and directed to prescribe such regulations as may be necessary for the enforcement of this provision.
"Forced labor", as herein used, shall mean all work or service which is exacted from any person under the menace of any penalty for its nonperformance and for which the worker does not offer himself voluntarily. For purposes of this section, the term "forced labor or/and indentured labor" includes forced or indentured child labor.
The Customs Regulations promulgated pursuant to 19 U.S.C. 1307 are found at title 19, Code of Federal Regulations, 12.42-12-45 (19 CFR 12.42-12.45). Specifically, 19 CFR 12.42(e) provides:
If the Commissioner of CBP finds at any time that information available reasonably but not conclusively indicates that merchandise within the purview of section 307 is being, or is likely to be, imported, he will promptly advise all port directors accordingly and the port directors shall thereupon withhold release of any such merchandise pending instructions from the Commissioner as to whether the merchandise may be released otherwise than for exportation.
In the detention notice issue to Uniqlo on January 5, 2021, the Port advised Uniqlo that the subject cotton garments were subject to a WRO, were being detained pursuant to 19 C.F.R. 12.42(e), and that it may export the goods to any location outside the United States (under CBP supervision) pursuant to 19 C.F.R. 12.44(a) or contend that the goods were not produced with forced labor by submitting the documentation/proof required by 19 CFR 12.43 at any time during the review process.
Timeliness of Proof of Admissibility
The subject cotton garments were detained pursuant to 19 U.S.C. 1499, for a potential violation of 19 CFR 12.42(e). As such, Uniqlo was entitled to present to CBP evidence establishing proof of admissibility under 19 CFR 12.43 within three months from the date of importation, or in the alternative, to export the goods pursuant to 19 CFR 12.44(a). Since the subject goods were imported on January 5, 2020, Uniqlo should have been allowed until April 5, 2021 to provide evidence of admissibility or export the goods. However, although Uniqlo submitted its proof of admissibility for its shipment of cotton garments on March 30, 2021 in response to CBP's detention notice, the Port responded to Uniqlo with an exclusion letter on April 9, 2021. Insofar as the Port's exclusion of Uniqlo's shipment was premature, we will address Uniqlo's April 19, 2021, protest and application for further review despite the expiration of the 3-month deadline set forth in 19 CFR 12.43(b).
Admissibility of the Cotton Garments under the XPCC WRO
Uniqlo argues that because the raw cotton used to produce the subject cotton garments did not originate from XPCC or, for that matter, in China, they are not subject to the WRO, and should therefore be released. In a press release of December 2, 2020, the U.S. Department of Homeland Security announced that CBP personnel at all U.S. ports of entry "will detain shipments containing cotton and cotton products originating from the Xinjiang Production and Construction Corps (XPCC)." The press release went on to elaborate as follows:
CBP's Office of Trade directed the issuance of a Withhold Release Order (WRO) against cotton products made by the XPCC based on information that reasonably indicates the use of forced labor, including convict labor. The WRO applies to all cotton and cotton products produced by the XPCC and its subordinate and affiliated entities as well as any products that are made in whole or in part with or derived from that cotton, such as apparel, garments, and textiles.
Uniqlo has provided evidence to establish that the raw cotton used to produce the subject cotton garments was sourced from entities outside of China, (specifically three (3) cotton suppliers in Australia, Namoi Cotton Alliance, Auscott Marketing Pty Ltd., and Queensland Cotton Corporation PTY LTD, three (3) cotton suppliers in the United States, J.G. Boswell Company, Bruce Allbright Agency Inc. and Allenberg Cotton Co. (a division of Louis Dreyfus Company LLC) and one (1) cotton supplier in Brazil, Agropecuaria Maggi Ltda.); however, Uniqlo has not provided substantial evidence to establish that the entities within the XPCC that processed that cotton into the subject goods did so without the use of forced labor.
In the detention letter issued January 5, 2021, the Port indicated that evidence such as "list of production steps and production record for the yarn, including records that identify the cotton and cotton producer of the raw cotton. Transportation documents from cotton grower to yarn maker. Supporting documents related to employee's that picked the cotton, timecards or the like, wage payment receipts, and daily process reports that relate to the raw cotton sold to the yarn produce." would be required to establish that the subject goods were not produced by the use of forced labor.
However, our examination of the evidence submitted by Uniqlo reveals that it was not responsive to the Port's request and does to establish that the subject goods were not produced using forced labor. Specifically, regarding the various entities within the XPCC that processed the subject cotton garments, there are substantial deficiencies:
. [ ] Cotton yarn producer. No cotton yarn production/processing/procedures records reflecting actual cotton yarn production were submitted.
. [ ] Cotton Fabric Weaver and Dyer. No cotton fabric weaving/dying processing or production records were submitted.
. [ ] (Sewing Company which made the finished garment). No production or processing records that reflect cutting and sewing of the cotton fabric in order to make the finished garment were submitted.
. [ ] Cotton yarn spinner. No cotton yarn production processing/procedures records reflecting actual cotton yarn production were submitted.
. [ ] Cotton Yarn Spinner. No cotton yarn production/processing/procedures records reflecting actual yarn production were submitted.
. [ ] Cotton Fabric Weaver and Dyer. No weaving production or dying processing records of the cotton fabric were submitted.
. [ ] Cotton yarn Spinner. No cotton yarn production/processing/ procedures records reflecting actual yarn production were submitted.
. [ ] Cotton Yarn Spinner in China. No cotton yarn production/processing/ procedures records reflecting actual yarn production were submitted.
. [ ] Cotton Yarn Spinner. No cotton yarn production/processing/procedures records reflecting actual cotton yarn production were submitted.
. The "Cutting and Laying Up" fabric records and the Garment Inspection Daily Report of [ ] fails to provide adequate information to substantiate that the production process of the finished garments was completed by the manufacturer or their employees. Further, the records do not reflect the actual composition of the fabric.
. The certificate submitted by [ ] does not reflect the specific products produced, the parties involved, the dates of transaction, or location of the factory.
. The invoices submitted by [ ] to [ ] do not reflect a fabric composition percentage.
. The delivery note submitted by [ ] reflects a future delivery date of 10/23/2021.
. Invoices submitted by [ ] to [ ] do not reflect a fabric composition percentage.
. Code of Conduct Letter submitted by [ ], dated 08/09/2016, is not current.
Although Uniqlo has provided evidence relating to the sale, acquisition, source location, transportation, and delivery of the raw cotton used to produce the subject cotton garments, as exemplified above, it has not provided any probative evidence to establish that their imported cotton garments were not produced in part by forced labor by the XPCC.
The protestant has not established that the detained cotton garments were not produced in part by forced labor. Accordingly, the subject goods are inadmissible.
In accordance with applicable regulations set forth in 19 CFR 12.44(a), the protestant will be afforded the opportunity to export the goods.
The protest is DENIED.
Cargo Security, Carriers and Restricted Merchandise Branch
Regulations and Rulings Directorate
Office of Trade
 Uniqlo Response to Petition dated March 30, 2021 at p. 2 et seq.