Department of Labour guidelines
Companies without a social compliance programme
Companies with a social compliance programme

As part of its response to the changes regarding forced labour enforcement brought about by the Trade Facilitation and Trade Enforcement Act (TFTEA) 2015,(1) US Customs and Border Protection (CBP) is proposing to compel members of the Customs Trade Partnership Against Terrorism (CTPAT) to maintain a social compliance programme to help to combat forced labour in supply chains.


Section 307 of the Tariff Act 1930 (19 USC § 1307) prohibits the importation of merchandise that is mined, produced or manufactured, wholly or in part, in any foreign country by forced or indentured child labour – including forced child labour. Such merchandise is subject to exclusion and seizure and may lead to the criminal investigation of the importer. The TFTEA repealed the 'consumptive demand' clause in 19 USC Section 1307. The clause had allowed the importation of certain forced labour-produced goods if the goods were not produced "in such quantities in the United States, as to meet the consumptive demands of the United States". This has led to increased enforcement by the CBP.

Certain provisions of the Countering America's Adversaries Through Sanctions Act, which became effective 21 September 2017, also provide impetus to the concept of expanding the CTPAT to require a social compliance programme that will focus on preventing goods manufactured by forced labour. The relevant provisions established a presumption that when there is credible information that goods are produced using North Korean labour, such labour should be considered forced labour, regardless of where the labour is located. Thus, the goods are prohibited from being imported into the United States, and the burden of proof to establish that North Korean forced labour was not involved in the production of the goods is on the importer.

The CTPAT was started after 9/11 in November 2001 to fight terrorism by creating customs-to-business partnerships aimed at securing supply chains and facilitating low-risk trade. The advertised benefits of membership include:

  • trade facilitation;
  • fewer inspections; and
  • less wait times at the border.

The CTPAT is a voluntary partnership under the direction of the CBP's cargo enforcement administration, under which compliant trusted traders that are certified and validated members with secure and efficient supply chains are entitled to reduced screening of their imported cargo.

Department of Labour guidelines

Under the CTPAT proposal, the CBP would require members to maintain a specific social compliance monitoring system using established Department of Labour guidelines. A 'social compliance system' is defined by the department as an "integrated set of policies and practices through which a company seeks to ensure maximum adherence to the elements of its code of conduct that cover social and labor issues". The department avers that "a social compliance system that enables oversight and control over every actor in every supply chain is challenging" because companies' "supply chains are long and complex, with a large number of links from their immediate suppliers back to the farms or mines where raw materials are sourced". Under the proposal, CTPAT eligibility would be based on whether the CBP has verified the existence of a robust social compliance programme.

Under the proposal, a successful social compliance programme must meet the following seven criteria according to the CBP:

  • engage stakeholders and partners;
  • assess risks and impacts;
  • develop a code of conduct;
  • communicate and train across the supply chain;
  • monitor compliance;
  • remediate violations; and
  • disclose and report performance.

All the components must be met according to the Department of Labour guidance, because:

a system without all components – for example, an auditing system that operates in isolation from communication and training, remediation and other measures – is very likely not to be sufficient to address challenging labor issues that can arise in global supply chains.

Companies without a social compliance programme

Under the CTPAT's new forced labour strategy, a company without a social compliance programme will be forced to publicly disclose this information. This appears to contrast with the CBP's policy of not disclosing a company's participation in the CTPAT. Moreover, a forced labour violation would be grounds for removal from the CTPAT.

Companies with a social compliance programme

On the other hand, companies with validated social compliance programmes will receive:

  • prior notification from the CBP of companies and commodities with a high risk of supply chain forced labour violations;
  • prior notification of hold release orders and an opportunity to prepare exculpatory evidence, with expedited verification of the evidence provided; and
  • reduction in the post-release enquiries relating to forced labour supply chain due diligence.

Further, participants will be excluded from the universe of imports considered high-risk unless specific actionable information is furnished against the importer.


It remains to be seen whether the CTPAT will be accepted by the industry. The Commercial Operations Advisory Committee had recommended to the CBP that it allow companies "the option of opting in or opting out of the Forced Labor component of the future CTPAT Trade Compliance program". The CTPAT has not yet indicated how it will audit or graduate and assist companies to ensure strict compliance.

The Department of Labour further identified a social compliance system as part of a company's broader approach to corporate social responsibility. The CTPAT therefore seems to be requiring corporate social responsibility as a specific element of continued membership.

While the CBP has been encouraging importers to use the department's guidance since the TFTEA changes, this proposal shows that the CBP is increasing its focus on enforcement.

It also presents a template of factors of a successful programme that the CBP may use as a measuring stick going forward.

For further information on this topic please contact Teresa Polino or David Salkeld at Arent Fox LLP by telephone (+1 202 857 6000) or email ([email protected] or [email protected]). The Arent Fox LLP website can be accessed at


(1) Enacted on 24 February 2016.