UPS Forced Labor Compliance

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS. This document is for informational purposes only. It does not constitute legal advice –
please consult with your own legal counsel for such advice. Also, do not rely on this information without performing your own research.
© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
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Note: CBP is U.S. Customs and Border Protection

Forced labor refers to situations in which
persons are coerced to work through the use of
violence or intimidation, or by more subtle
means such as accumulated debt, retention of
identity papers or threats of denunciation to
immigration authorities.
Source: Global estimates of modern slavery: forced labour and
forced marriage ILO and Walk Free Foundation, 2017

Social compliance is a continuing process in
which organizations endeavor to protect the
health, safety, and rights of their
employees, the community and
environment in which they operate, and
the lives and communities of
workers in their supply and
distribution chains. Social compliance
and social responsibility may address
concerns about labor rights for workers, fair
labor laws, harvesting and the use of
conflict minerals, and general
environmental and sustainability questions.
[Insert file name] 6
Source: https://www.smartsheet.com/social-compliance

• Globally, 25 million people in Forced
Labor.
• 4.1 million are imposed by
government authorities.
• Children make up 18% of Forced
Labor victims, some as young as 5
years old.
• 90% of all children in child labor are in the
Africa and the Asia Pacific regions.
Source: http://www.ilo.org/global/topics/forced-labour/lang--
ja/index.htm

3.4
4
3.6
2.8
2.2
1.3
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
World Asia Pacific EU & Central Asia Africa Arab States Americas
Per mille (10th of %) of population
Source: Global estimates of modern slavery: forced labor and forced marriage ILO and Walk Free Foundation, 2017

• Section 307 of the Tariff Act of
1930 (19 USC 1307) prohibits the
importation of all goods mined,
produced, or manufactured, wholly
or in part, in any foreign country by
convict labor and/or forced labor
and/or indentured labor, including
forced or indentured child labor.

Game changing legislation:
• Effective February 24th, 2016, the Trade Facilitation and Trade Enforcement Act (TFTEA)
closed the previous consumptive demand loophole.
• Countering America’s Adversaries through Sanctions Act (CAATSA), created a presumption
that “significant goods, wares, articles and merchandise mined, produced or manufactured
wholly or in part by the labor of North Korean nationals or citizens” are forced labor goods in
violation of 19 USC 1307 and prohibited from entry in the U.S.
Sources: https://www.cbp.gov/trade/trade-enforcement/tftea
https://www.cbp.gov/newsroom/national-media-release/cbp-combats-modern-day-slavery-passage-countering-america-s

• CAATSA puts a new twist on the Forced Labor regulations
• With N. Korea labor allegations, there is a presumption of forced labor
• Importer must produce clear and convincing evidence to prove otherwise
• CAATSA allows CBP to deny entry, seize and or refer to ICE or HSI for criminal prosecution.
• e-Allegations Online Trade Violation Reporting System
• Permits anonymous reporting of alleged violations
Sources: https://www.cbp.gov/newsroom/national-media-release/cbp-combats-modern-day-slavery-passage-countering-america-s
https://apps.cbp.gov/eallegations CBP.gov

• To date CBP has blocked approximately
15 shipments due to possible use of
forced labor.
• CBP is sending importers requests for
information (CF28s).
 ACE / CEE impact
• UN Security Council voted to require UN
members to send all North Korean
nationals earning income in their
jurisdictions back to North Korea by Dec.
22nd, 2019
Sources: https://internationaltradetoday.com, Jan 12,
2018 (Today’s Top News);
The Diplomat, December 12,2017;
New York Times December 22, 2017:
CF28: Customs Form 28.

1. Preventive measures in place
1.E.g., due diligence policy
2.E.g., internal audits
2. Disclosure information
1.Who are the manufacturers
2.Who are the buyers
Note: Manufacturers can respond directly
[Insert file name] 13
Note: CF28 = Customs Form 28
Source: Actual CBP 28 forms received by UPS Customs Brokerage
from UPS clients

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• Whether you are aware of all manufacturers or suppliers in your supply chain and
whether or not your company have a due diligence policy regarding whether the
manufacturers/suppliers are free from forced labor
• If your company has examined the risks of forced labor in compliance with 19 USC 1307
and or performed internal audits to ensure no forced labor is involved
• Are audits documented and shared with CBP?
• What enhancements were enacted if you have identified there are indications that there may be forced
labor?
• How to distinguish if North Korean labor is involved
Source: Actual CBP 28 forms received by UPS Customs Brokerage from UPS clients

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• Lists of your manufacturers and suppliers, including contact information
• Names of company buyers
• Documentation from your manufacturers /suppliers indicated that their goods are free from
the use of forced labor to make them
• Sample employee contracts or paychecks between your manufacturer and their employees
• Whether your manufacturers or suppliers use workers through third party labor brokers
and do the workers have to any fees back to the broker
• Migrant workers
• Minimum age requirements of employees

• Make sure to properly document when comments are coming directly from the manufacturer or
supplier
• Notate “answer provided and attested to by manufacturer and/or supplier”
• Provide manufacturer/supplier contact info
• Please note exporters or producers may respond directly to CBP in order to protect business
confidential information if necessary.
• Commercial information provided to CBP will be treated as privileged/confidential. (See 19 CFR
103.35 for additional information.)
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1. Utilize CBP’s recently updated Informed Compliance
Publication: “What Every Member of the Trade Community
Should Know: Reasonable Care”
• Recommendations to minimize chances that imported goods are
produced using forced labor.
2. Read CBP’s seven fact sheets on various topics related to
forced labor,
• Includes Forced Labor – Importer Due Diligence.
3. Review CBP’s "Forced Labor" webpage, which includes a list
of active withhold release orders and findings.
Sources:
https://www.cbp.gov/document/publications/reasonable-care
https://www.cbp.gov/trade/trade-community/programs-outreach/convict-importations

4. Review U.S. Department of Labor’s (DOL) list of high risk
commodity/country pairs at DOL List of Products
5. Update your SOP’s to reflect the recommendations and
best practices that you wish to employ. Socialize the
program throughout your enterprise.
6. Consult with your attorney or a trade consultant should
you receive a CF28 related to forced labor.

• List of products with their source
countries which it has a reasonable basis
to believe are produced by forced or
indentured child labor.
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https://www.dol.gov/ilab/reports/child-labor/list-of-
products/index-country.htm

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CONSULTING SERVICES MANAGED SERVICES
COMPLIANCE CONSULTING PROCESS MANAGEMENT
TRADE CONSULTING ASSISTANCE WITH BROKER/FORWARDER
MANAGEMENT
TARIFF ENGINEERING ASSISTANCE WITH FTA (FREE TRADE
AGREEMENT) MANAGEMENT
SECURITY INITIATIVES CONSULTING POST-ENTRY MANAGEMENT
FTA FEASIBILITY EVALUATIONS DATA MANAGEMENT
CLASSIFICATION MANAGEMENT
ASSISTANCE WITH IMPORT/EXPORT LICENSE
MANAGEMENT
ASSISTANCE WITH DENIED-PARTY SCREENING
MANAGEMENT

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UPS Forced Labor Compliance

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