Potential for US Import Ban against Boohoo and Leicester East Garment Manufacturing Industry
BACKGROUND:
Section 307 of the U.S. Tariff Act of 1930 (Act) has proven to be an effective tool in the global fight against modern slavery. Since 2016, US Customs and Border Patrol (CBP) has substantially increased the issuance of Withhold Release Orders (WROs) when information indicates that merchandise is being, or is likely to be, imported into the United States that is made in whole or in party with forced labour. CBP may issue a WRO for merchandise from a specific manufacturer or for a type of good produced in a particular location, country, or region. CBP may then detain a shipment of the relevant merchandise subject to the WRO at a U.S. port of entry. The Act may also lead to the criminal investigation of the importing party.
Currently there are 47 active WROs in place affecting various regions and industries across the globe. They include bans against the import of Chinese-manufactured hair products, garments and apparel, cotton, and computer parts; Malaysian disposable gloves and palm oil; and seafood harvested by two specified Taiwan-flagged fishing vessels and a Vanuatu-flagged fishing vessel.
In January 2021, CBP issued its first ever region-wide WRO, banning the import of all cotton products and tomato products produced in China’s Xinjiang Uyghur Autonomous Region (“Xinjiang”) with immediate effect. It is likely that the Biden administration will go even further to increase WRO activity as part of a larger US policy and commitment to combat forced labour.
BOOHOO GROUP AND EAST LEICESTER GARMENT INDUSTRY:
Early last month, news broke that Boohoo Group and the East Leicester garment industry are the subject of two petitions filed earlier this year by Liberty Shared, a Hong Kong-based anti-modern slavery NGO. Liberty Shared has a successful track record of pursuing import bans on goods tainted by forced labour into U.S. markets. The Liberty Shared petitions rely in large part of the findings and conclusions of the Boohoo-commissioned independent Levitt Report, as well as a research report prepared and published by The Centre for Social Justice and Justice and Care entitled “Parallel societies: slavery, exploitation, and criminal subculture in Leicester.”
CBP has completed its initial review of the petitions and determined there is sufficient evidence to initiate a case and investigation into both Boohoo Group and the East Leicester garment industry (excepting two companies). Among other factors, the petition cites: (1) ineffective UK government, institutions, and infrastructure; (2) deprivation, poverty, and overcrowding; (3) limitations of UK Modern Slavery Act and National Referral Mechanism; (4) lack of coordination and information sharing across the sector; (5) re-victimisation/fear of deportation; (6) lack of intelligence gathering and identification of individuals responsible for factories; (7) worker collusion, in-work poverty, and benefits fraud.
FINANCIAL AND COMMUNITY IMPACT:
Boohoo, with its sister labels Nasty Gal and Pretty Little Thing, is a major client of Leicester East factories, last year accounting for 75-80 per cent of Leicester’s garment production. With one fifth of Boohoo’s sales currently coming from the U.S., the impact of a WRO would result in severe financial losses not just for Boohoo, but for the entire Leicestershire workforce and economy. Factory conditions in Leicester may well be replicated in other garment industries across Blackpool, Burnley, Oldham and parts of Manchester. The financial impact to brands and businesses that export products into US markets would be significant and immediate.
Recent media reports and private communications reflect confusion amongst brands, industry professionals, manufacturers, and government officials and agencies as to the authority and scope of the US Tariff Act. They also suggest unawareness of the extent of the potential economic, societal, and reputational repercussion; a WRO against Boohoo/East Leicester would be the first-ever issued against a developed country in the Northern Hemisphere. The Liberty Shared petitions and WRO threat highlight the immediate need for a renewed call for action to drive out corruption and worker exploitation in the UK garment industry.
For more information, please contact Jennifer Wascak at Jennifer@justiceinfashion.com or by telephone at +44(0)7506902136.