[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]


                     EXPLOITATION AND ENFORCEMENT: EVALUATING 
                      THE DEPARTMENT OF HOMELAND SECURITY'S 
                      EFFORTS TO COUNTER UYGHUR FORCED LABOR

=======================================================================

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                       OVERSIGHT, INVESTIGATIONS,
                           AND ACCOUNTABILITY

                                 OF THE

                     COMMITTEE ON HOMELAND SECURITY
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 19, 2023

                               __________

                           Serial No. 118-34

                               __________

       Printed for the use of the Committee on Homeland Security
                                     

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        Available via the World Wide Web: http://www.govinfo.gov

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                     COMMITTEE ON HOMELAND SECURITY

                 Mark E. Green, MD, Tennessee, Chairman
Michael T. McCaul, Texas             Bennie G. Thompson, Mississippi, 
Clay Higgins, Louisiana                  Ranking Member
Michael Guest, Mississippi           Sheila Jackson Lee, Texas
Dan Bishop, North Carolina           Donald M. Payne, Jr., New Jersey
Carlos A. Gimenez, Florida           Eric Swalwell, California
August Pfluger, Texas                J. Luis Correa, California
Andrew R. Garbarino, New York        Troy A. Carter, Louisiana
Marjorie Taylor Greene, Georgia      Shri Thanedar, Michigan
Tony Gonzales, Texas                 Seth Magaziner, Rhode Island
Nick LaLota, New York                Glenn Ivey, Maryland
Mike Ezell, Mississippi              Daniel S. Goldman, New York
Anthony D'Esposito, New York         Robert Garcia, California
Laurel M. Lee, Florida               Delia C. Ramirez, Illinois
Morgan Luttrell, Texas               Robert Menendez, New Jersey
Dale W. Strong, Alabama              Yvette D. Clarke, New York
Josh Brecheen, Oklahoma              Dina Titus, Nevada
Elijah Crane, Arizona
                      Stephen Siao, Staff Director
                  Hope Goins, Minority Staff Director
                       Sean Corcoran, Chief Clerk
                                 ------                                

     SUBCOMMITTEE ON OVERSIGHT, INVESTIGATIONS, AND ACCOUNTABILITY

                  Dan Bishop, North Carolina, Chairman
Marjorie Taylor Greene, Georgia      Glenn Ivey, Maryland, Ranking 
Mike Ezell, Mississippi                  Member
Dale W. Strong, Alabama              Shri Thanedar, Michigan
Elijah Crane, Arizona                Delia C. Ramirez, Illinois
Mark E. Green, MD, Tennessee (ex     Yvette D. Clarke, New York
    officio)                         Bennie G. Thompson, Mississippi 
                                         (ex officio)
                  Sang Yi, Subcommittee Staff Director
           Lisa Canini, Minority Subcommittee Staff Director
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page

                               Statements

The Honorable Dan Bishop, a Representative in Congress From the 
  State of North Carolina, and Chairman, Subcommittee on 
  Oversight, Investigations, and Accountability:
  Oral Statement.................................................     1
  Prepared Statement.............................................     3
The Honorable Glenn Ivey, a Representative in Congress From the 
  State of Maryland, and Ranking Member, Subcommittee on 
  Oversight, Investigations, and Accountability:
  Oral Statement.................................................     4
  Prepared Statement.............................................    11
The Honorable Bennie G. Thompson, a Representative in Congress 
  From the State of Mississippi, and Ranking Member, Committee on 
  Homeland Security:
  Prepared Statement.............................................    12

                               Witnesses

Ms. Kimberly Glas, President and CEO, National Council of Textile 
  Organizations:
  Oral Statement.................................................    13
  Prepared Statement.............................................    15
Mr. Peter Mattis, President, Jamestown Foundation:
  Oral Statement.................................................    25
  Prepared Statement.............................................    27
Ms. Louisa Greve, Director of Global Advocacy, Uyghur Human 
  Rights Project:
  Oral Statement.................................................    29
  Prepared Statement.............................................    31
Mr. Michael Stumo, CEO, Coalition for a Prosperous America:
  Oral Statement.................................................    36
  Prepared Statement.............................................    38

                             For the Record

The Honorable Dan Bishop, a Representative in Congress From the 
  State of North Carolina, and Chairman, Subcommittee on 
  Oversight, Investigations, and Accountability:
  Article, Reuters, September 1, 2023............................    48
The Honorable Glenn Ivey, a Representative in Congress From the 
  State of Maryland, and Ranking Member, Subcommittee on 
  Oversight, Investigations, and Accountability:
  Statement of Doreen P. Greenwald, National President, National 
    Treasury Employees Union.....................................     5
  Article, NPR, February 1, 2023.................................    61

 
  EXPLOITATION AND ENFORCEMENT: EVALUATING THE DEPARTMENT OF HOMELAND 
           SECURITY'S EFFORTS TO COUNTER UYGHUR FORCED LABOR

                              ----------                              


                       Thursday, October 19, 2023

             U.S. House of Representatives,
                    Committee on Homeland Security,
                Subcommittee on Oversight, Investigations, 
                                        and Accountability,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2 p.m., in 
room 310, Cannon House Office Building, Hon. Dan Bishop 
[Chairman of the subcommittee] presiding.
    Present: Representatives Bishop, Ezell, Strong, Ivey, 
Thanedar, and Ramirez.
    Mr. Bishop. The Committee on Homeland Security, 
Subcommittee on Oversight, Investigations, and Accountability 
will come to order. Without objection, the Chair is authorized 
to declare the committee in recess at any point.
    The purpose of today's hearing is to receive testimony from 
an expert panel on efforts to prevent goods made with Uyghur 
forced labor in China from entering the United States.
    Without objection, so ordered.
    I now recognize myself for an opening statement.
    Good afternoon, and welcome to this hearing of the 
Subcommittee on Oversight, Investigations, and Accountability 
titled, ``Exploitation and Enforcement: Evaluating the 
Department of Homeland Security's Efforts to Counter Uyghur 
Forced Labor.''
    Today's hearing will look at the Department's on-going 
efforts to enforce the Uyghur Forced Labor Prevention Act. 
Enforcing the UFLPA carries with it not only U.S. economic and 
competitive interests, but also a moral issue to prevent forced 
labor.
    For the better part of the last decade, the Chinese 
Communist Party has waged a ruthless and inhuman campaign of 
repression and genocide against the Uyghur minority population 
in the Xinjiang region of western China, sending more than 1 
million people to internment camps, and denying basic liberties 
through religious persecution, forced sterilization, and other 
human rights abuses.
    The Chinese Government operates an extensive system of 
forced labor to produce key manufactured products, including 
textiles and electronics. Research has shown that the products 
of this forced labor system are deeply imbedded in global 
supply chains.
    For example, this one region is responsible for over 85 
percent of China's cotton production, and around 20 percent of 
the global cotton supply. Nearly 2 years ago, Republicans and 
Democrats in Congress worked together and passed the Uyghur 
Forced Labor Prevention Act. This law recognized the reality 
that any imports produced in Xinjiang or by entities with close 
ties to forced labor in the region, should be presumed to be 
made with forced labor and banned from entry until proven 
otherwise.
    The Department of Homeland Security enforces UFLPA through 
U.S. Customs and Border Protections inspections of cargo 
entering the United States and through the Department's 
leadership of the Forced Labor Enforcement Task Force. The 
FLETF is responsible for publishing a list of entities that the 
U.S. Government determines to be complicit in the CCP's system 
of forced labor in Xinjiang. The UFLPA is a significant 
bipartisan measure to counter the CCP's unjust and predatory 
exploitation of forced labor.
    But a law is only as good as its enforcement. Sixteen 
months after the UFLPA went into effect, the evidence shows 
that goods made with forced labor in Xinjiang continue to enter 
the U.S. homeland. Earlier this year, CBP conducted isotopic 
testing on clothing samples, and found that 15 percent of the 
items tested positive for cotton from Xinjiang.
    Meanwhile, even though 2022 U.S. textile and apparel 
imports totaled $153.2 billion under UFLPA, CBP only detained 
less than 1,000 shipments worth $39 million from June 2022 to 
the present in the textile and apparel sector. Of those 
detentions, only $8 million worth were denied entry.
    The Department needs to take a more proactive approach to 
enforcing the UFLPA. For starters, the Department has been slow 
to expand the UFLPA entity list, adding only 7 entities to the 
list in the past year. Additionally, CBP should significantly 
expand its use of isotopic testing and other supply chain 
tracing technologies to identify cotton sourced from Xinjiang, 
as well as for other trade enforcement issues.
    Small, low-value, de minimis shipments also pose a growing 
obstacle to CBP's enforcement capabilities, undermining CBP 
ability to interdict not just goods made with Uyghur forced 
labor, but also narcotics, such as fentanyl. Shippers of de 
minimis goods face less CBP scrutiny and can ship directly to 
consumers. More than 60 percent de minimis shipments come from 
China, including from direct-to-consumer clothing retailers 
that face scrutiny over their supply chain's risk of using 
forced labor in Xinjiang.
    De minimis shipments have doubled in the past 5 years 
alone, rising from $500 million in fiscal year 2019 to over a 
billion in the past year. That appears on the chart that is 
directed behind me. Acting CBP Commissioner Troy Miller 
admitted just last month, that the record volume of de minimis 
shipments makes, ``screening these shipments and ferreting out 
contraband incredibly challenging''.
    With such a flood of less scrutinized shipments arriving at 
U.S. ports of entry every day, the openings for banned imports 
and smuggled drugs to slip through CBP inspection are 
plentiful. This raises a question of the design of the relevant 
statute.
    The exploitation of Uyghur forced labor enriches Chinese 
industry at the expense of American manufacturers and workers. 
The domestic textile industry is critical for supplying 
equipment and clothing to our military and hospitals, as well 
as to our population. Rigorous enforcement of the UFLPA 
counters China's predatory trade practices, and supports 
American manufactures while keeping the CBP's forced labor 
system in Xinjiang from profiting off access to the U.S. 
market. This is an important issue that warrants Congressional 
attention as we carry out our responsibility to ensure that the 
laws passed by Congress enjoy robust and effective enforcement 
by Federal agencies.
    I want to thank our witnesses here today, and I look 
forward to hearing your testimony.
    [The statement of Chairman Bishop follows:]
                    Statement of Chairman Dan Bishop
                            October 19, 2023
    Good afternoon, and welcome to this hearing of the Subcommittee on 
Oversight, Investigations, and Accountability, titled, ``Exploitation 
and Enforcement: Evaluating the Department of Homeland Security's 
Efforts to Counter Uyghur Forced Labor.'' Today's hearing will look at 
the Department's on-going efforts to enforce the Uyghur Forced Labor 
Prevention Act (UFLPA). Enforcing the UFLPA carries with it not only 
U.S. economic and competitive interests, but also a moral issue to 
prevent forced labor.
    For the better part of the past decade, the Chinese Communist Party 
has waged a ruthless and inhumane campaign of repression and genocide 
against the Uyghur minority population in the Xinjiang region of 
western China, sending more than 1 million people to internment camps 
and severely restricting basic liberties through religious persecution, 
forced sterilization, and other human rights abuses. The Chinese 
government operates an extensive system of forced labor to produce key 
manufacturing products, including electronics and textiles. Research 
has shown that the products of this forced labor system are deeply 
embedded in global supply chains. For example, this one region is 
responsible for over 85 percent of China's cotton production and around 
20 percent of the global cotton supply.
    Nearly 2 years ago, Republicans and Democrats in Congress worked 
together and passed the Uyghur Forced Labor Prevention Act. This law 
recognized the reality that any imports produced in Xinjiang or by 
entities with close ties to forced labor in the region should be 
presumed to be made with forced labor and banned from entry until 
proven otherwise. The Department of Homeland Security enforces the 
UFLPA through U.S. Customs and Border Protection's inspections of cargo 
entering the United States and through the Department's leadership of 
the Forced Labor Enforcement Task Force (FLETF). The FLETF is 
responsible for publishing a list of entities that the U.S. Government 
determines to be complicit in the CCP's system of forced labor in 
Xinjiang. The UFLPA is a significant bipartisan measure to counter the 
CCP's unjust and predatory exploitation of forced labor. But, a law is 
only as good as its enforcement.
    Sixteen months after the UFLPA went into effect, the evidence shows 
that goods made with forced labor in Xinjiang continue to enter the 
U.S. homeland. Earlier this year, CBP conducted isotopic testing on 
clothing samples and found that 15 percent of the items tested positive 
for cotton from Xinjiang. Meanwhile, even though 2022 U.S. textile and 
apparel imports totaled $153.2 billion, under UFLPA, CBP only detained 
less than 1,000 shipments worth $39 million from June 2022 to the 
present in the textile and apparel sector, and of those detentions only 
$8 million worth were denied entry.
    The Department needs to take a more proactive approach to enforcing 
the UFLPA. For starters, the Department has been slow to expand the 
UFLPA Entity List, adding only 7 entities to the list in the past year. 
Additionally, CBP should significantly expand its use of isotopic 
testing and other supply chain tracing technologies to identify cotton 
sourced from Xinjiang.
    Small, low-value de minimis shipments also pose a growing obstacle 
to CBP's enforcement capabilities, undermining CBP's ability to 
interdict not just goods made with Uyghur forced labor but also 
narcotics such as fentanyl. Shippers of de minimis goods face less CBP 
scrutiny and can ship directly to consumers. More than 60 percent of de 
minimis shipments come from China, including from direct-to-consumer 
clothing retailers that face scrutiny over their supply chains' risk of 
using forced labor in Xinjiang. De minimis shipments have doubled in 
the past 5 years alone, rising from 500 million in fiscal year to over 
1 billion in the past year.
    Acting CBP Commissioner Troy Miller admitted just last month that 
the record volume of de minimis shipments makes quote--``screening 
these shipments and ferreting out contraband incredibly challenging.'' 
With such a flood of less scrutinized shipments arriving at U.S. ports 
of entry every day, the openings for banned imports and smuggled drugs 
to slip through CBP inspection are plentiful.
    The exploitation of Uyghur forced labor enriches Chinese industry 
at the expense of American manufacturers and workers. The domestic 
textile industry is critical for supplying equipment and clothing to 
our military and hospitals. Rigorous enforcement of the UFLPA counters 
China's predatory trade practices and supports American manufacturers 
while keeping the CCP's forced labor system in Xinjiang from profiting 
off access to the U.S. market.
    This is an important issue that warrants Congressional attention as 
we carry out our responsibility to ensure that the laws passed by 
Congress enjoy robust and effective enforcement by Federal agencies. I 
want to thank our witnesses for being here today, and I look forward to 
hearing their testimony.

    Mr. Bishop. I now recognize the Ranking Member, the 
gentleman from Maryland, Mr. Ivey for his opening statement.
    Mr. Ivey. Thank you, Mr. Chairman, and thank you for 
calling this hearing. I appreciate the fact that you did this.
    Just in my review in preparation for this hearing myself, 
it appears that additional oversight is going to be important 
here. In reviewing the statute, I saw that there are many 
reports that are generated, or required to be generated by the 
statute, but I don't know that either they are being generated 
or we are reviewing them as closely as we should. I think this 
is a big step in the right direction, so I greatly appreciate 
that.
    I want to apologize to the witnesses for the light turnout 
in the hearing room today. As you may know, the House is a 
little distracted with some internal matters. But I assure you, 
it doesn't reflect on the importance of the matter that we're 
here to hear your testimony about.
    I want to talk in a couple of tranches here. One is with 
respect to the Uyghurs. But I also have an interest in the some 
of the issues that are going on in Africa. Although, I believe 
there are some links there as well with respect to forced 
labor. The goods might be a little bit different, but I think 
the moral issue and the economic issue is very similar, and the 
need for the United States to step in and address it, whether 
it's in China or Africa or wherever is important as well.
    With respect to this issue, just in reviewing the statute, 
there's a couple things that I wanted to raise, and I'll have a 
chance to ask you some questions about it, but I'll just flag 
it now. The first is, as the Chairman mentioned, I don't know 
if there's many prosecutions of these cases as one might 
inspect, or the interceptions.
    I've got a criminal prosecution background, so I might have 
a little bit of a different perspective. You all might need to 
give me some guidance on that. But it does appear that there 
have been interceptions of shipments where forced labor goods 
have been included in those, and the new testing methods, I 
think, have reflected that to some extent.
    But I do wonder about next steps, whether there's an 
effort, or the ability, frankly, to take it beyond that point 
with respect to sanctions. Just in reviewing the sanctions 
section here, there's language about asset blocking for 
example, and I did notice that there are shipments that can be 
sent back, I suppose, or not allowed into the country.
    But I wasn't clear on whether we had the ability to 
actually seize and forfeit what was shipped over because it 
would seem to me that if we really want to send a message that 
this is unacceptable, seizure is the way to do it as opposed to 
just sending it off to some other place where they can then 
still make money off the illegal goods.
    Second, I know there's issues about the definitions that 
allow companies or allow the United States to put some of these 
companies on the list, where they get their rebuttable 
presumption in making a determination about whether this 
specific company is going to get the kind of extra oversight 
that it should based on where these goods are coming from.
    I thought that was important in two ways: One is, the de 
minimis issue that the Chairman just raised. If we are seeing 
shipments--and again, this might be my limited understanding of 
how this is working, but I believe it's an $800 cutoff. If 
we're seeing multiple items that are falling under the $800 
amount--and I recognize that there's a limit--I'll come to this 
in a moment--limited enforcement capability just from boots on 
the ground with respect to funding that Government has on this 
front, but if we're finding multiple examples of these de 
minimis items, is there a way to aggregate those so that we can 
still pursue sanctions against these companies that are 
shipping it?
    If not--I believe also the de minimis number was raised 
from $200 to $800. I understand why. There's a limit to how 
much can be inspected and the like, just sheer manpower. But 
that might also mean that if there's individual shipping, like 
especially by, say, email ordering or electronic requests, that 
there's a way to circumvent the law that was put in place 
simply by just sending it in smaller amounts. So if that's a 
correct reading, I'd like to get your thoughts in how we can 
address that.
    With respect to the manpower issue, we've gotten a letter 
from the National Treasury Employees Union. Doreen Greenwald, 
who's the national president sent it, and I'd like to make this 
part of the record without objection.
    Mr. Bishop. Without objection, so ordered.
    [The information referred to follows:]
Statement of Doreen P. Greenwald, National President, National Treasury 
                            Employees Union
                            October 19, 2023
    Chairman Green, Ranking Member Thompson, distinguished Members of 
the committee, thank you for the opportunity to provide this testimony. 
As president of the National Treasury Employees Union (NTEU), I have 
the honor of leading a union that represents 29,000 Customs and Border 
Protection (CBP) Officers, Agriculture Specialists and trade 
enforcement and compliance specialists who are stationed at 328 air, 
sea, and land ports of entry across the United States and 16 
PreClearance stations throughout the world.
    CBP's mission at the ports of entry includes, but is not limited 
to, combating human smuggling, countering illicit drugs, and 
facilitating the lawful flow of trade and travel, to ensure our 
national and economic security. CBP employees at the ports of entry are 
the second-largest collectors of revenue in the Federal Government, 
collecting almost $112 billion in duties, taxes, and fees in fiscal 
year 2022. In addition, CBP Office of Field Operations (OFO) personnel 
are on the front line of illegal narcotics interdiction. CBP seizures 
of fentanyl have been escalating for several years, increasing by more 
than 200 percent over the last two fiscal years. In fiscal year 2022, 
CBP seized approximately 14,700 pounds of fentanyl Nation-wide, 
permanently removing these drugs from the illicit supply chain, keeping 
them out of our communities and denying drug trafficking organizations 
profits and critical operating capital.
    Our air, sea, and land ports are in desperate need of more CBP 
employees at the ports of entry to reduce wait times for international 
travelers and cargo shippers, improve the interdiction of illegal drugs 
and illicit goods, and handle the processing of migrants seeking 
asylum. According to CBP's most recent publicly-released workload 
staffing models, the agency needs to hire at least 1,750 CBP Officers, 
250 Agriculture Specialists, and 154 non-uniformed Trade Specialists to 
address staffing needs at the ports of entry. These staffing shortages 
have led to Specialists longer wait times at border crossings, 
increased workloads, overtime for personnel and temporary duty 
assignments (TDYs) to Southwest Border ports that exacerbate staffing 
shortages at other ports.
    Unfortunately, the House fiscal year 2024 DHS appropriations bill 
would only provide funding to hire 150 CBP Officers to serve at 
Southwest Border ports of entry does not begin to meet the staffing 
needs at the ports of entry Nation-wide either to process legal 
international trade and travel vital to the U.S. economy or to stop 
deadly fentanyl and other contraband from crossing through U.S. ports 
of entry. Inadequate funding for these CBP employees shortchanges our 
economic growth and our national security.
    CBP non-uniformed trade personnel, including Entry Specialists, 
Import Specialists, Paralegal Specialists that determine and assess 
fines, penalties, and forfeitures, Customs Auditors and Attorneys and 
other trade compliance personnel, are the front line of defense against 
illegal imports and contraband. These employees enforce over 400 U.S. 
trade and tariff laws and regulations to ensure a fair and competitive 
trade environment pursuant to existing international agreements and 
treaties, as well as stem the flow of illegal imports, such as illicit 
opioids, pirated intellectual property and counterfeit goods, and 
contraband such as child pornography, illegal arms, weapons of mass 
destruction, and laundered money. These CBP employees also collect 
revenue--processing more than $3.35 trillion in total import value of 
goods and collecting almost $112 billion in total revenue in fiscal 
year 2022.
    Along with facilitating legitimate trade and enforcing trade and 
security laws, CBP trade personnel are responsible for preventing entry 
of illegal transshipments; goods with falsified country of origin; 
goods that are misclassified; and goods produced by forced labor. CBP 
implements Section 307 of the Tariff Act of 1930 (19 U.S.C. 1307) 
through issuance of Withhold Release Orders and findings to prevent 
merchandise produced in whole or in part in a foreign country using 
forced labor from being imported into the United States, as well as the 
Uyghur Forced Labor Prevention Act (UFLPA) (Pub. L. 117-78), that 
prohibits the importation of goods into the United States manufactured 
wholly or in part with forced labor in the People's Republic of China, 
especially from the Xinjiang Uyghur Autonomous Region, or Xinjiang. 
Since the UFLPA went into effect through May 29, 2023, CBP stopped more 
than 4,000 shipments of goods valued at over $1.3 billion for 
enforcement action review.
               trade enforcement and compliance staffing
    When CBP was created in 2003, it was given a dual mission of not 
only safeguarding our Nation's borders and ports from terrorist 
attacks, but also the mission of regulating and facilitating 
international trade. CBP is responsible for collecting import and 
antidumping and countervailing duties and ensuring importers fully 
comply with all applicable laws, regulations, quotas, Free Trade 
Agreement (FTA) requirements, and intellectual property provisions.
    Customs revenues are the second-largest source of Federal revenues 
collected by the U.S. Government after tax revenues, and that revenue 
funds other Federal priority programs. NTEU is deeply concerned with 
the lack of resources, both in dollars and workforce, being devoted to 
CBP's trade functions. Lack of sufficient focus and resources not only 
costs the U.S. Treasury in terms of customs duties and revenue loss, 
but also costs American companies in terms of lost business to unlawful 
imports.
    CBP needs sufficient trade personnel to ensure compliance with and 
enforce trade laws. In addition to ensuring that there are enough 
personnel to manage the growth in trade and complexity, CBP non-
uniformed trade personnel need to be trained and become experts in both 
modern business practices and in traditional competencies such as 
classification, valuation, compliance, and enforcement.
    In fiscal year 2022, CBP added only 65 new positions across its 
trade enforcement enterprise to support UFLPA efforts. This included 
hiring new CBP officers, import specialists, trade analysts, auditors, 
intelligence analysts, investigators, attorneys, and support staff. The 
increased enforcement scope of the UFLPA, however, has highlighted 
resource gaps for CBP to sustain consistent UFLPA operations across the 
328 ports of entry, 10 Centers of Excellence and Expertise, field 
offices, and headquarters.
    According to CBP's most recent Resource Optimization Model (ROM) 
for Trade issued in 2021, there are 2,349 CBP revenue occupations 
personnel onboard, 154 positions short of the CBP revenue staff 
authorized by Congress. These occupations include Import (937), Entry 
(395), Fines, Penalties and Forfeiture (84), National Import (89) and 
International Trade Specialists (197), Customs Auditors (321), 
Attorneys (111) and Chemists (106).
    By law, CBP must submit to Congress its Trade ROM every 2 years. It 
is our understanding that CBP has not yet provided its fiscal year 2023 
Trade ROM to Congress and NTEU urges the committee to request CBP to 
provide fiscal year 2023 Trade ROM to the Committees on Ways and Means 
and Finance as soon as possible.
    Continuing staffing shortages, inequitable compensation, and lack 
of mission focus are the main reason experienced CBP commercial 
operations professionals at all levels, who long have made the system 
work, are leaving, or have left the agency. Further, more than 25 
percent of CBP Import Specialists will retire or be eligible to retire 
within the next few years.
    When Congress created the DHS, the House Ways and Means and Senate 
Finance Committees included Section 412(b) in the Homeland Security Act 
(HSA) of 2002 (Pub. L. 107-296). This section mandates that ``the 
Secretary [of Homeland Security] may not consolidate, discontinue, or 
diminish those functions . . . performed by the United States Customs 
Service . . . on or after the effective date of this Act, reduce the 
staffing level, or reduce the resources attributable to such functions, 
and the Secretary shall ensure that an appropriate management structure 
is implemented to carry out such functions.''
    In October 2006, Congress enacted the Security and Accountability 
For Every (SAFE) Port Act (Pub. L. 109-347). Section 401(b)(4) of the 
SAFE Port Act directed the DHS Secretary to ensure that requirements of 
section 412(b) of the HSA (6 U.S.C. 212(b)) are fully satisfied. CBP 
satisfied this statutory requirement by freezing the number of 
``maintenance of revenue function'' positions at the level in effect on 
the date of creation of the agency in March 2003. As you know, CBP was 
created by the merger of the former U.S. Customs Service, the 
Immigration and Naturalization Service, and the Animal, Plant, Health 
Inspection Service. In March 2003, the number of commercial operations 
employees at the former U.S. Customs Service was significantly less 
than prior to 9/11.
    In March 2003 when CBP stood up, there were only 984 Import 
Specialists on board. That is 265 Import Specialist positions less than 
the 1998 base total, and 505 less than the fiscal year 2002 Import 
Specialists optimal staffing level. A significant reduction in the 
number of ``maintenance of revenue function'' positions had occurred at 
the U.S. Customs Service between 9/11 and March 2003 when CBP was 
established. Section 412(b) of the HSA reflected Congress' concern 
regarding this diminishment in the number of customs revenue function 
positions versus customs security function positions at the U.S. 
Customs Service and fears that erosion in revenue functions would 
continue and be exacerbated in the future by its merger into CBP.
    Even though CBP complied with the letter of Section 401 (b)(4) of 
the SAFE Port Act, it appears to NTEU that CBP views the ``March fiscal 
year 2003 Staff On-Board'' numbers ``maintenance of revenue function'' 
positions, including vital trade facilitation and enforcement positions 
as Entry and Import Specialists, as a staffing ceiling rather than a 
floor. CBP did not even achieve that threshold number of Import 
Specialists positions in fiscal year 2021. As stated in the fiscal year 
2021 ROM, the HSA threshold for import specialists is 984 positions; in 
fiscal year 2021, there were only 937 positions onboard.
    Despite the significant investment in forced labor trade 
intervention, prevention and enforcement, the number of CBP's non-
uniformed trade personnel has not materially increased since CBP was 
established in 2003 even though inbound trade volume multiplied 32 
times between fiscal year 2003 and fiscal year 2023.
        trade act of 2002 and cbp synthetic opioid interdiction
    CBP plays a leading role in addressing the Nation's opioid 
epidemic--a crisis that is getting worse, as the deadly chemical 
fentanyl is being manufactured in China and is either funneled through 
Mexico or sent by mail and express consignment operators directly to 
addresses in the U.S. International mail facility (IMF) and express 
consignment carrier environments account for approximately 19 percent 
of the illicit drug seizures at the ports of entry in fiscal year 2022.
    Under Section 343 of the Trade Act of 2002 (Pub. L. 107-210) as 
amended, and under the SAFE Port Act, CBP has the legal authority to 
collect Electronic Advance Data (EAD) provided by air, sea, and land 
commercial transport companies, including Express Consignment Carriers 
and importers. In the postal environment, bilateral agreements 
regarding EAD between the U.S. Postal Service (USPS) and foreign postal 
operators have increased CBP's ability to target high-risk shipments. 
Additionally, the Synthetics Trafficking and Overdose Prevention (STOP) 
Act (Pub. L. 115-271) requires that DHS prescribe regulations requiring 
the USPS to transmit advance electronic information for international 
mail to CBP consistent with the statute. Currently, USPS provides EAD 
from more than 129 foreign postal services, and CBP utilizes EAD to 
actively target international mail shipments at 7 IMFs.
    For cargo arriving by aircraft, express consignment operators are 
required to provide EAD to CBP prior to the scheduled arrival of 
express cargo in the U.S. Express consignment operators accept items 
for delivery to the United States at points of sale in foreign 
countries and maintain control of items until they are delivered to the 
addressees.
    Analysis of EAD is one of the tools that helps CBP identify threats 
in inbound international express cargo items and includes the sender's 
name and address, recipient's/consignee's name and address, contents' 
description, number of pieces, and total weight. Express consignment 
operators found in violation of these requirements are subject to a 
penalty. EAD requirements were to be implemented by CBP in three 
phases.
    Phase 1 required electronic manifests to CBP for international 
travel 4 hours prior to arrival and for Canada, Mexico, the Caribbean, 
parts of Central and South America at wheels up. However, every day 
these manifests are inaccurate with countless overages, which are 
shipments that are not included on the manifest. In other words, an 
overage is an un-manifested, unknown shipment which is in violation of 
the law. A manifested shipment may have 1 or 500 overages, but the 
highest penalty for overages is $5,000, and this penalty is routinely 
mitigated to $50 for a first violation and $100 for subsequent 
violations.
    Phase 2 required express consignment operators to provide quality 
shipper/consignee data. These addresses should show that the packages 
are received from legitimate businesses/addresses and are delivered to 
legitimate businesses/addresses. If not, the express consignment 
operator is subject to a penalty.
    In 2007, CBP drafted the Phase 3 implementation plan, but to date 
has not implemented it. Phase 3 would allow CBP Officers to impose a 
monetary penalty for incorrect manifest descriptions and false value 
declarations. Without implementation of Phase 3, CBP Officers cannot 
penalize carriers for bringing in items manifested as one thing that 
turn out to be another. Many of these shipments are not concealed well 
and are often simply mislabeled. For example, narcotic chemicals may be 
labeled car parts or supplement powder, and CBP cannot impose a penalty 
for this type of mislabeling.
    GAO reports that express consignment operators have reported that 
``they are able to individually scan each item upon arrival, providing 
an opportunity to identify and set aside express cargo targeted for CBP 
inspection based on EAD.'' (GAO-17-606, page 29). However, CBP Officers 
tell NTEU that this is not the case for overages that arrive 
unmanifested or for mislabeled packages. These CBPOs report that 
express consignment operators rely on Phase 1 electronic manifests to 
be accurate when they frequently are not. Also, when first rolled out, 
Trade Act violations were required to be reported to HQ. That is no 
longer the case.
    Also, according to GAO, ``although CBP has been using EAD to target 
express cargo for inspection since approximately 2004, it has not 
evaluated whether this method results in benefits relative to other 
methods of choosing express cargo . . . for inspection'' (GAO-17-606, 
page 28.)
    For these reasons, NTEU recommends that Congress direct CBP to 
provide a report on an annual basis on the individuals and companies 
that violate the Trade Act to the Senate Committee on Ways and Means 
and Finance. This report should include the violator's name; the 
violation committed; the port of entry/location through which the items 
entered; an inventory of the items seized including description of the 
item and quantity; place of origination including address of the 
violator; the amount in penalties assessed by CBP for each violation by 
violator name and port of entry/location; the amount of penalties that 
CBP could have levied for each violation by violator name and port of 
entry/location and the rationale for negotiating down the penalty for 
each violation by violator name and port of entry/location.
    Congress, by requiring CBP to report this useful information on 
violators and violator penalty assessments, would enhance CBP's 
interdiction of prohibited items from entering the United States 
through express consignment operators.
    Last, even though accurate and reliable advance information is 
critical to CBP's targeting efforts to ascertain legitimate shipment 
transactions from those involved in illegal and illicit business 
transactions utilizing the U.S. Postal Service and private carriers, 
the ability to assess penalties for violations of Section 343 of the 
Trade Act is equally important. Penalties are routinely mitigated to a 
fraction of the full penalty and are just considered the cost of doing 
business.
    For example, at one express consignment port of entry where 
penalties had previously been mitigated to 1 percent of the maximum 
penalty, they have recently been mitigated to 10 percent. In 2023 to 
date, 97 penalties were assessed at that port for a total of 
$1,821,098. Of these 97 penalties, 42 were Trade Act violations. But 
many ports do not have as robust a penalty effort as this express 
consignment hub because of staffing limitations. It is unclear to what 
extent the original Trade Act penalties were mitigated from the 
original penalty amount and how much could have been collected in 
penalty if not mitigated. A penalty is not an effective deterrent if it 
is mitigated to a token amount that is just seen as the cost of doing 
business.
                            recommendations
    The more than 29,000 CBP employees represented by NTEU are proud of 
their part in keeping our country free from terrorism, our 
neighborhoods safe from drugs, and our economy safe from illegal trade, 
while ensuring that legal trade and travelers move expeditiously 
through our air, sea, and land ports. These men and women are deserving 
of more resources to perform their jobs better and more efficiently.
    Therefore, NTEU urges the committee to:
   support fiscal year 2024 funding for additional CBP 
        Officers, Agriculture Specialists, and non-uniformed CBP trade 
        operations personnel;
   support legislation to authorize increased funding for much 
        needed non-uniformed CBP trade operations personnel;
   support legislation to authorize increased funding through 
        appropriations for critically short-staffed CBP Officers at the 
        ports of entry;
   support implementation of the Uyghur Forced Labor Prevention 
        Act;
   support a requirement for CBP to provide a report on an 
        annual basis on the individuals and companies that violate the 
        Uyghur Forced Labor Prevention Act and the Trade Act of 2002 to 
        the House Committee on Ways and Means and Senate Committee on 
        Finance; and
   support legislation to end the mitigation of Trade Act 
        penalties.
    Thank you for the opportunity to submit this statement for the 
record to the committee on their behalf.

    Mr. Ivey. This raises issues about staffing, frankly. The 
issue here is--I'll just read a couple of it. We can come back 
to this when we get to the questioning, but that the increase 
in trade has been significant. I'll just read this paragraph, 
``Despite the significant investment in forced labor trade 
intervention, prevention, and enforcement, the number of CBP's 
non-uniformed trade personnel has not materially increased 
since CBP was established in 2003, even though inbound trade 
volume multiplied 32 times between fiscal year 2003 and fiscal 
year 2023.''
    I wanted to get a sense--and this might not be your inside 
information. We might have to ask the CBP about it, but is that 
what you're seeing? You know are they understaffed? Are there 
things that we need to do as Congress to provide additional 
resources so that they have the bodies to do the work?
    Then with respect to the process. I noticed here there's a 
Forced Labor Enforcement Task Force, and this is the group 
that's tasked with sending the reports to Congress, I think, 
and the making determinations about who goes on this entity 
list is my sense of it. I was kind-of wondering if--because 
we're hearing that that might be too many cooks in the kitchen, 
I guess, is a way to put it.
    Normally in a criminal prosecution, you have the people 
that do the investigation work, and they bring it to 
prosecutors who then make a decision about whether there's 
enough evidence to move forward or not. Doing this by a 
committee of 7 might be a little large. Also I'm worried that 
if there are too many people making this determination, maybe 
we're getting fewer enforcement actions than we should.
    I say that in part because I see this rebuttable 
presumption language that's in the statute, which one would 
think would make it much easier to pursue these sorts of 
enforcement actions than in a typical court circumstance. 
Normally, the Government would have the burden of showing that 
you had materials in here that had slave labor included. But at 
least in this particular context, there seems to be a 
rebuttable presumption that shifts the burden to the people who 
are sending the items here to the United States.
    It seems like that would be a heavy burden to me that could 
only be overcome by clear and convincing evidence. If that's 
the case, you know, I'd like to get your sense of why we're not 
seeing more enforcement actions. Is it the structure that we 
put in place? Is it the staffing issue? Is there something else 
going on?
    Then let me move on--I appreciate your indulgence giving me 
the time to get through these issues. I appreciate it.
    The Democratic Republic of Congo--and I apologize, I know 
this isn't necessarily what you came to talk about--but just in 
other hearings I've participated in, I know that they've got an 
issue with respect to forced labor too. It appears to be 
elements that are going into batteries, for example, or other 
high-tech materials.
    But a lot of the structure sounds similar to what may be 
going on with what we're told has been going on with the 
Uyghurs, individuals who are being forced into labor, 
essentially enslaved. In some instances, they're getting paid, 
but not much. Dangerous working conditions, for example, when 
they're mining cobalt. Children. That's right. Some as young as 
6. I'll make articles available for that record too.
    But it struck me as sort-of two pieces that I wanted to 
raise with this particular group. One is, that this links back 
to China. Apparently China owns a lot of these mines that are 
in these African countries that are using the slave labor 
there. So it made me wonder, is there ability for China to 
circumvent the structure that was put in place with the statute 
just by, you know, off-shoring it, basically?
    Then the other issue I was wondering about is the statute 
speaks specifically about the Uyghurs, and I know that there 
are other laws that govern other countries, but I don't know if 
they are as aggressive as this one, frankly, and as far-
reaching.
    So my question on that front would be: Does Congress need 
to do more to address this type of activity across the board? 
Not that we want to, you know, neglect what's going on with the 
Uyghurs and China. But if there are other issues of this going 
on in other countries, we need to address for the reasons the 
Chairman mentioned in the same way.
    So, with that, Mr. Chairman, I appreciate the opportunity 
to give the opening statement. I look forward to your 
testimony.
    [The statement of Ranking Member Ivey follows:]
                 Statement of Ranking Member Glenn Ivey
                            October 19, 2023
    Thank you, Mr. Chairman, and thank for calling this hearing. I 
appreciate the fact that you did this.
    Just in my review in preparation for this hearing myself, it 
appears that additional oversight is going to be important here. In 
reviewing the statute, I saw that there are many reports that are 
generated, or required to be generated by the statute, but I don't know 
that either they are being generated or we are reviewing them as 
closely as we should. I think this is a big step in the right 
direction, so I greatly appreciate that.
    I want to apologize to the witnesses for the light turnout in the 
hearing room today. As you may know, the House is a little distracted 
with some internal matters. But I assure you, it doesn't reflect on the 
importance of the matter that we're here to hear your testimony about.
    I want to talk in a couple of tranches here. One is with respect to 
the Uyghurs. But I also have an interest in some of the issues that are 
going on in Africa. Although, I believe there are some links there as 
well with respect to forced labor. The goods might be a little bit 
different, but I think the moral issue and the economic issue is very 
similar, and the need for the United States to step in and address it, 
whether it's in China or Africa or wherever is important as well.
    With respect to this issue, just in reviewing the statute, there's 
a couple things that I wanted to raise, and I'll have a chance to ask 
you some questions about it, but I'll just flag it now. The first is, 
as the Chairman mentioned, I don't know if there's many prosecutions of 
these cases as one might inspect, or the interceptions.
    I've got a criminal prosecution background, so I might have a 
little bit of a different perspective. You all might need to give me 
some guidance on that. But it does appear that there have been 
interceptions of shipments where forced labor goods have been included 
in those, and the new testing methods, I think, have reflected that to 
some extent.
    But I do wonder about next steps, whether there's an effort, or the 
ability, frankly, to take it beyond that point with respect to 
sanctions. Just in reviewing the sanctions section here, there's 
language about asset blocking for example, and I did notice that there 
are shipments that can be set back, I suppose, or not allowed into the 
country.
    But I wasn't clear on whether we had the ability to actually seize 
and forfeit what was shipped over because it would seem to me that if 
we really want to send a message that this is unacceptable, seizure is 
the way to do it as opposed to just sending it off to some other place 
where they can then still make money off the illegal goods.
    Second, I know there's issues about the definitions that allow 
companies or allow the United States to put some of these companies on 
the list, where they get their rebuttable presumption in making a 
determination about whether this specific company is going to get the 
kind of extra oversight that it should based on where these goods are 
coming from.
    And I thought that was important in two ways: One is, the de 
minimis issue that the Chairman just raised. If we are seeing 
shipments--and again, this might be my limited understanding of how 
this is working, but I believe it's an $800 cutoff. If we're seeing 
multiple items that are falling under the $800 amount--and I recognize 
that there's a limit--I'll come to this in a moment--limited 
enforcement capability just from boots on the ground with respect to 
funding that Government has on this front, but if we're finding 
multiple examples of these de minimis items, is there a way to 
aggregate those so that we can still pursue sanctions against these 
companies that are shipping it?
    If not--I believe also the de minimis number was raised from 200 to 
800. I understand why. There's a limit to how much can be inspected and 
the like, just sheer manpower. But that might also mean that if there's 
individual shipping, like especially by, say, email ordering or 
electronic requests, that there's a way to circumvent the law that was 
put in place simply by just sending it in smaller amounts. So if that's 
a correct reading, I'd like to get your thoughts in how we can address 
that.
    With respect to the manpower issue, we've gotten a letter from the 
National Treasury Employees Union. Doreen Greenwald, who's the national 
president sent it, and I'd like to make this part of the record without 
objection.

    Mr. Bishop. I thank the Ranking Member for his careful 
preparation and interest in the issue and even the expanded 
sort-of notion of what this subcommittee ought to be looking 
at.
    I also welcome Ms. Ramirez, and I'll say that other Members 
of the committee are reminded that opening statements may be 
submitted for the record.
    [The statement of Ranking Member Thomas follows:]
             Statement of Ranking Member Bennie G. Thompson
                            October 19, 2023
    I am pleased that we are holding this subcommittee hearing today to 
shine a spotlight on the administration and enforcement of the Uyghur 
Forced Labor Prevention Act (UFLPA).
    UFLPA was necessary to combat the horrific genocide and crimes 
against humanity perpetrated by the People's Republic of China against 
the Uyghur population. This minority group has been systematically 
persecuted for decades, but in recent years the Chinese government has 
forcibly detained over 1 million ethnic Uyghur people and other Muslims 
in reeducation centers, using threats, violence, and fear to force them 
into accepting employment in labor-intensive industries.
    Ensuring that U.S. consumers are not unwittingly supporting human 
rights violations by purchasing goods made wholly or in part using 
forced labor from the Xinjiang region of China is truly an issue of 
bipartisan importance. I look forward to hearing from the witnesses 
today about the on-going implementation of this relatively new law, and 
what more can be done to achieve full compliance.
    I expect that some of what we may hear today will be critical of 
how the Department of Homeland Security (DHS) has not yet done enough 
to prevent the importation of goods made with forced labor, which in 
turn undercuts the competitiveness of American companies who abide by 
the law. It is critical that we help ensure that American companies 
that do not engage in human rights violations can fairly compete in the 
global marketplace and are not unduly disadvantaged.
    However, it's important to note that, by passing UFLPA, Congress 
has asked DHS, and Customs and Border Protection (CBP) in particular, 
to quickly establish new policies and procedures in addition to hiring 
hundreds of new employees to carry out this important work. It will 
take time for DHS to fully develop the manpower and expertise needed to 
inspect and halt every shipment that contains goods made with forced 
labor, but that does not mean that the Department isn't committed to 
the goals of the Act.
    Since the beginning of 2022, the Department has created and 
implemented a strategy which establishes that ending forced labor is a 
moral, economic, and national security priority for DHS. As of last 
month, CBP has stopped over 5,000 shipments of goods valued at over 
$1.8 billion for review and consequently denied entry into the United 
States for over 2,300 shipments. Additionally, DHS has created and 
published a list of entities known to utilize forced labor, and the 
Department has participated in adjudications with companies that may 
object to their inclusion. Ensuring that the companies on this list 
meet the criteria and are not unfairly included takes time and careful 
consideration.
    As companies grapple with the new requirements of UFLPA and 
discover ways to evade the intent of the law, it will be essential for 
DHS to have continued support from Congress. Whether that requires more 
funding to bolster CBP's trade enforcement and DHS's expansion of the 
entities list, or new restrictions on what can and cannot be imported, 
Members on this committee and others must remain engaged. It remains 
critically important that we uphold American values by fully enforcing 
this Act and meeting these challenges head on.
    I look forward to hearing what recommendations our witnesses have 
today for improving the implementation of UFLPA. I also hope we can 
hold a subsequent hearing with witnesses from DHS and CBP to hear 
directly about the challenges they are facing and how this committee 
can best support their vital work on prohibiting the import of goods 
made with forced labor.

    Mr. Bishop. I'm pleased to have a distinguished panel of 
witnesses before us today on this very important topic. I ask 
that our witnesses please rise and raise your right hand.
    Do you solemnly swear that the testimony you will give 
before the Committee of Homeland Security of the U.S. House of 
Representatives will be the truth, the whole truth, and nothing 
but the truth, so help you God?
    Let the record reflect that the witnesses have answered in 
the affirmative. Thank you. You may resume your seats, and I 
would now like to formally introduce our witnesses.
    Ms. Kimberly Glas is the president and CEO of the National 
Council of Textile Organizations. She is also a commissioner on 
the U.S. China Economic and Security Review Commission.
    Mr. Peter Mattis currently serves as president of the 
Jamestown Foundation, and is a former Senate-appointed staff 
director of the Congressional Executive Commission on China.
    Ms. Louisa, Greve--is that how I pronounce your name?
    Ms. Greve. Greve.
    Mr. Bishop. Ms. Louisa Greve is the director of global 
advocacy for the Uyghur Human Rights Project.
    Mr. Michael Stumo is the CEO of the Coalition for a 
Prosperous America, an organization which represents domestic 
producers and workers across the U.S. economy. I thank all of 
the witnesses for being here.
    I now recognize Ms. Kimberly Glas for 5 minutes for her 
opening statement.

STATEMENT OF KIMBERLY GLAS, PRESIDENT AND CEO, NATIONAL COUNCIL 
                    OF TEXTILE ORGANIZATIONS

    Ms. Glas. Chairman Bishop, Ranking Member Ivey, and Members 
of the committee, thank you for the opportunity to testify at 
this critical hearing on behalf of the U.S. textile industry 
and its 540,000 workers across our supply chain.
    The U.S. industry and our regional allies have been a 
direct victim of aggressive predatory trade practices by China, 
costing millions of jobs and making once-bustling towns across 
the United States a graveyard of factories. Our industries are 
survivors, thrivers, innovators, sustainability chiefs, and we 
are strategic supply chain making life-saving PPP when the 
country needed it the most, and a proud supplier of 8,000 
different products to our U.S. military.
    Today, our industry is facing unparalleled demand 
destruction as a direct result of negative market forces 
exacerbated by anemic customs and trade law enforcement. 
Chinese cotton from Xinjiang is flooding the global 
marketplace, making its way onto our doorsteps and into our 
closets. As a result, American textile plants have been forced 
to idle equipment, lay off workers, while some companies have 
been put out of business entirely. We need urgent action and 
attention, and we appreciate this hearing today.
    Twenty percent of the world's cotton is grown in Xinjiang 
made with forced labor. Seventy-two percent of all Chinese 
cotton apparel or textiles utilizes Xinjiang cotton. This 
banned cotton is also a major source of inputs throughout 
Asia's textile and apparel supply chain, much ultimately 
destined for the U.S. marketplace. So how much of this banned 
cotton is being stopped?
    U.S. imports of textile apparel and footwear in 2022 
totaled 184 billion, but only 39 million in shipments were 
detained for possible UFLPA violations over the last 15 months. 
To put it in context, that's a mere 2/10 of a single percentage 
point of total imports. Shockingly, despite cotton production 
increasing in Xinjiang since UFLPA became enacted, enforcement 
for textile has actually decreased over the last year, both for 
UFLPA and in our free trade agreement countries where the 
Chinese are trying to hide some of their cotton.
    We advertise these figures on the CBP website. You may as 
well put up a billboard to China and the trade cheaters that 
say, Come on in, we aren't really looking. De minimis, I'd 
rename this the forced labor, U.S. job destroyer, black market, 
we don't really look, superhighway. Once used exclusively by 
U.S. travelers bringing personal items home from abroad, the de 
minimis provision has been weaponized by Chinese e-commerce and 
other sites to send 3 million packages to the United States 
each day, and it's estimated half of these packages are textile 
and apparel.
    These packages bypass inspections, duties, and penalties. 
De minimis means minimal inspection. In 2016, we had 150 
million of these packages. Today, we are on record for 1 
billion individual packages containing forced labor goods, 
counterfeits, fentanyl, largely un-inspected and receiving VIP 
express treatment making de minimis the world's greatest black 
market. Astonishingly, legalized by the U.S. Government to 
offshore industries.
    One billion packages are not de minimis to U.S. 
manufacturers, U.S. workers, retailers, and our free trade 
agreement partners who are being displaced from the U.S. 
marketplace. UFLPA is impossible to enforce with this loophole. 
When a fire is out of control, you don't look for more data to 
examine the fire. You throw Niagara Falls at it.
    In terms of our recommendations, Congress must get 
aggressive on oversight of Customs enforcement. You must bring 
up CBP officials and ask them the hard questions, ask them for 
the metrics, ask them to put out a public roadmap on stepped-up 
enforcement activity so everyone in the world understands we're 
taking an aggressive posture related to this.
    We also have to step up our penalties. We have to close the 
de minimis loophole. There are tools in the toolbox right now 
that the administration has, through executive authorities and 
rulemakings, to close the de minimis loophole. We need to ask, 
why aren't you? Congress needs to work on a long-term solution 
on de minimis, but we can stop the bleeding right now. We need 
to utilize the UFLPA entity list more robustly to deter the 
fraudulent illegal trade.
    In closing, American manufacturers and especially the 
American textile industry competes against Chinese companies, 
Chinese government, and unfortunately, our own Government when 
we fail to effectively enforce our U.S. trade law. Who in our 
Government would vote to allow China to ship billions each year 
un-inspected, duty-free to the United States? What a gift.
    Who would condone the packaging and exporting of dangerous 
products to our marketplace, including products like fentanyl? 
Who would approve of the flooding of our market with subsidized 
products often made with forced labor? Yet, that is the de 
facto polity of the U.S. Government when we take a weak posture 
toward customs enforcement, an aggressive enforcement plan 
coupled with a set of rational revisions to the outdated, and 
now extremely dangerous loopholes in our trade law would 
prevent the discontinuation of this devastation. But Congress 
and the Executive branch need to act now.
    I thank you for the committee's leadership on these 
incredibly important issues, and our industry depends on these 
solutions.
    [The prepared statement of Ms. Glas follows:]
                  Prepared Statement of Kimberly Glas
                            October 19, 2023
    Chairman Bishop and Ranking Member Ivey, thank you for the 
opportunity to testify on this subject that is so important to our 
Nation and to the U.S. textile industry and our workers.
    My name is Kimberly Glas, and I am president and CEO of the 
National Council of Textile Organizations (NCTO), a not-for-profit 
trade association established to represent the entire spectrum of the 
United States textile production chain, from base fibers to finished 
sewn products, as well as supplier sectors that have a stake in the 
prosperity and survival of the U.S. textile industry. We serve as the 
voice of the U.S. textile industry and represent over 150 member 
companies. I also have the honor of serving as an appointed 
commissioner to the bipartisan U.S.-China Economic and Security Review 
Commission, although I am not appearing before you today on behalf of 
the Commission.
    The U.S. textile sector is an extremely diverse, technically 
advanced, and highly capital-intensive industry that involves a multi-
stage production chain. This domestic production chain is comprised of 
the following: suppliers in the cotton, wool, and man-made fiber 
sectors; yarn and fabric manufacturers; textile home furnishings 
producers; dyers, printers, and finishers; and our customers in the 
U.S. apparel, home furnishings, automotive, aerospace, construction 
materials, energy exploration, and other end-use industries.
    This vital domestic textile industry is an important component of 
the U.S. economy with production found in every region of the country. 
The industry provides much-needed jobs in rural areas and has 
functioned as a springboard for workers out of poverty into good-paying 
jobs for generations. The breadth, scope, and manufacturing 
capabilities of the industry are unparalleled--the industry has 
invested $21 billion over the past 10 years in the latest innovations 
on sustainability and production capabilities. This focus on innovation 
enables the industry to create hundreds of thousands of products 
including apparel, industrial textiles, military uniforms, and other 
defense applications. The U.S. textile industry is a strategic supply 
chain, as exemplified by its heroic efforts to convert machinery 
overnight to manufacture life-saving PPE as supply chains broke down 
abruptly at the outset of the pandemic.
    The U.S. textile sector further bolsters the national economy as a 
consumer of billions of dollars of inputs and support services, such as 
machinery, telecommunications, technology services, and numerous other 
products needed to manufacture textiles. According to the U.S. 
Department of Commerce, every job directly supplied by the U.S. textile 
sector provides three additional jobs throughout the economy. As such, 
direct and indirect employment supplied by the U.S. textile industry is 
responsible for nearly 2.4 million jobs Nation-wide. Additional details 
related to the U.S. textile industry are provided below:
U.S. Textile Industry Key Facts
   The U.S. textile industry supply chain--from fibers to 
        apparel and other sewn products--employed 538,000 workers in 
        2022. One textile job supports 3 other jobs in the United 
        States.
   The U.S. industry is the third-largest exporter of textile-
        related products in the world. Fiber, textile, and apparel 
        exports combined were $34.0 billion in 2021.
   The U.S. textile industry invested $20.9 billion in new 
        plants and equipment from 2012 to 2021.
   The domestic textile industry is critical to our national 
        security in that it supplies more than 8,000 different products 
        to the U.S. military.
   The United States is the world leader in textile research 
        and development, with the U.S. textile complex developing next 
        generation textile materials such as conductive fabric with 
        anti-static properties, electronic textiles that can monitor 
        heart rate and other vital signs, antimicrobial fibers, 
        lifesaving body armor, and new fabrics that adapt to the 
        climate to make the wearer warmer or cooler.
    According to a recent study by North Carolina State University's 
Wilson College of Textiles, the national economic impact of textile 
investment is substantial. Thirteen jobs are created for every $1 
million increase in U.S. textile production. That means if only 5 
percent of textile imports were converted to onshore production ($6.5 
billion), 84,500 new U.S. jobs would be created.
    The vital domestic supply chain is seeing demand destruction due to 
several factors. These issues have been compounded by insufficient 
customs enforcement. There are a multitude of predatory trade practices 
hurting the industry, including a loophole in U.S. trade law known as 
``de minimis'' shipments, the rampant undervaluation of goods, import 
fraud, and forced labor in supply chains.
                    introduction: enforcement is key
    I am honored to join a panel of respected experts to review how a 
lack of focused, aggressive enforcement of our trade laws is failing to 
combat forced labor practices that the Uyghur Forced Labor Prevention 
Act (UFLPA), which passed overwhelmingly in the House and Senate with 
broad bipartisan support, was designed to address. This substantial 
lack of enforcement is profound, allowing forced labor products to 
stream into the United States directly from China and other locations 
virtually undetected and without recourse.
    My testimony will focus on current supply chains, the lack of 
customs enforcement of UFLPA for our sector and its implications to 
domestic manufacturers and U.S. workers, and what Congress and the 
administration can immediately do to stem this disastrous economic tide 
while also addressing the profound human rights abuses impacting 
China's Uyghur population. I will also underscore that the de minimis 
trade loophole makes UFLPA enforcement virtually impossible and in fact 
rewards goods made with slave labor with preferential duty-free status. 
It is hurting our industries and undermining all manner of trade 
enforcement efforts. We greatly appreciate the committee holding this 
hearing today, and we want to be an active partner with you on 
immediate follow-up steps from this hearing.
    I will also provide an overview of global textile and apparel 
supply chains so that the subcommittee can better understand how China 
undermines them by producing and exporting tainted products and discuss 
at length how a failure to enforce our trade laws fuels forced labor 
practices and U.S. manufacturing job losses.
China's Rise to Dominance in Global Textile and Apparel Production
    To infiltrate global supply chains with forced labor products at 
scale, China first had to achieve dominance in this sector. Starting in 
the mid-1990's, China emerged as a large-scale predatory force 
benefiting from virtually limitless government programs intended to 
ensure that China's textile industry captured world markets and 
displaced foreign competitors and workers. China leveraged the Asian 
financial crisis of the late 1990's to steeply devalue its currency and 
slash prices for textile and apparel exports by 30-80 percent virtually 
overnight. China paired its persistent currency devaluation with heavy 
industrial subsidies to its state-owned factories, which has shrouded 
market forces, undervalued the true cost of its products, and displaced 
virtually all competitors.
    These economic factors were compounded by a series of U.S. policy 
decisions that devasted U.S. textile and apparel manufacturing and our 
trade partners' operations in the Western Hemisphere. These trade 
liberalization policies included allowing China's non-market economy to 
join the World Trade Organization (WTO) and enter into permanent normal 
trade relations with the non-market economy of Vietnam. Arrangements at 
the WTO that limited overproduction and dumping of textiles and apparel 
were also phased out, creating an opportunity to fill rising global 
demand for apparel with cheap, government-subsidized product from China 
and its Asian supply chain partners.
    China's rise came at the direct expense of the United States, as 
these gains led to a sharp decline in U.S. textile and apparel output 
and employment, with far-reaching implications for our trade and 
preference program partners in the Western Hemisphere. Despite an 
unprecedented increase in global apparel consumption from 1997-2009, 
U.S. textile and apparel production declined by 61 percent, employment 
decreased by a staggering 69 percent, exports fell by 15 percent, and 
the U.S. trade deficit for textile and apparel products increased by 82 
percent. At the same time, Chinese textile and apparel exports have 
exploded, making China the dominant player in the global market. From 
1992-2016, Chinese textile and apparel exports to the world grew by a 
staggering 910 percent, skyrocketing from $26.4 billion to $266.3 
billion.\1\ In fact, China's share of the world's textile and apparel 
trade quadrupled, growing from 9.5 percent in 1992 to 38.3 percent in 
2016.
---------------------------------------------------------------------------
    \1\ World Integrated Trade Solution (WITS).
---------------------------------------------------------------------------
    Further fueling China's dominant global position in the textile and 
apparel sector is the fact that many key competitors in China are 
state-owned enterprises, including companies owned by the People's 
Liberation Army. Moreover, China is the world's leading purveyor of 
illegal trade practices designed to unfairly bolster a blatantly 
export-oriented economy. These predatory practices take many forms, 
from macroeconomic policies that grant across-the-board advantages to 
their manufacturers to industry specific programs intended to 
monopolize global markets in targeted areas.
    It has also come to light that China's abuses include the 
exploitation and genocide of an estimated 800,000 to 1.8 million Uyghur 
Muslims in China's Xinjiang Uyghur Autonomous Region (XUAR) and beyond, 
where forced labor camps are an integral part of cotton, textile, and 
apparel production. The country also actively ignores its duty to 
maintain any basic labor or environmental standards in manufacturing, 
resulting in rampant pollution and workplace safety hazards throughout 
its textile production chain.\2\ China also continues to massively 
undervalue its products to maintain its leading position in the market, 
slashing prices on its apparel exports by an inexplicable 17.3 percent 
between 2020 and 2021, despite the imposition of 301 tariffs, at a time 
when consumer prices across-the-board rose by 4.2 percent.\3\
---------------------------------------------------------------------------
    \2\ See: News Article.
    \3\ BLS CPI Summary; September 14, 2021.
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Impact on U.S. Trade Partners in the Western Hemisphere
    Of course, China's predatory trade practices have had a massive 
adverse impact not only on U.S. manufacturers and workers, but also 
directly on our valued political and economic allies in the Western 
Hemisphere, contributing to economic instability and outward migration. 
Despite promises of preferred access to our consumer market through 
free trade agreements (FTAs), our trading partners find themselves at a 
distinct disadvantage to China's aggressive trade tactics.
    As the United States was poised to finalize the Dominican Republic-
Central America Free Trade Agreement (CAFTA-DR) and enable the region 
to compete for the U.S. consumer apparel market against a rising China, 
the major developments noted above--China's adoption of deplorable 
trade and economic tactics and the liberalization of U.S. trade 
policy--served to directly counteract that opportunity. These events 
negatively impacted investment, sourcing, and production decisions in 
the CAFTA-DR region, which was not equipped to compete with the 
aggressive, predatory policies and practices employed by the Chinese 
Communist Party.
    Despite those enormous challenges, the CAFTA-DR agreement has been 
a strong and critical co-production chain for our collective industry 
sectors. As an example, CAFTA-DR is the top destination for U.S. 
textile exports, accounting for 80 percent of all U.S. spun yarn and 94 
percent of U.S. cotton yarn exports last year. This is a critical co-
production chain, along with the United States-Mexico-Canada (USMCA) 
Agreement, because we have strong trade agreements that have rules to 
incentivize the use of U.S. and regional components to gain duty-free 
access and thereby promote critical investments. If we didn't have 
these rules, we would provide a backdoor to China and others non-
signatories that compete unfairly--and we would see this strategic 
industry evaporate virtually overnight.
The Biden-Harris Administration's Call to Action
    In 2021, to combat China's threat to the vibrant textile and 
apparel co-production chain in the Western Hemisphere and this trade 
predator's adverse impact on our output and employment, the 
administration announced a public-private effort to drive investment 
and create economic opportunities in Central America through a ``Call 
to Action'' initiative.
    Our industry was immediately supportive, and since the start of the 
effort, the CAFTA-DR supply chain has attracted $2 billion in 
investment, including significant investments in both Central America 
and the United States by American textile companies. Our hemispheric 
trade platform requires a dependable business environment and stable 
workforce throughout the production chain. Sufficient economic and 
employment opportunities must exist for workers both at home and 
abroad, for which our industrial sector plays a critical role. The 
damage that China inflicts on the U.S. textile industry and our Central 
American and USMCA co-production partners is one of the root causes of 
outward migration that absolutely must be addressed.
    We regret that what was once excitement and optimism in our 
industry for the promise of increased production, cooperation, and 
growth in this hemisphere just a few short months ago has taken a 
substantial turn. A lack of adequate customs and trade enforcement has 
compounded the effects of China's on-going predation to lead to a 
historic level of demand destruction for textiles and apparel in this 
hemisphere that threatens the industry's vitality. The situation has 
reached a tipping point where a large portion of U.S. textile 
production and employment, as well as the broader Western Hemisphere 
textile and apparel co-production chain, is threatened if enforcement 
activity is not ramped up immediately.
    As our industry has made massive capital investment to support 
export and production opportunities in our free trade agreements, those 
dollars become worthless if the integrity of our FTAs is not 
aggressively protected by our customs enforcement and investigative 
bodies. With your immediate help and the administration's support, we 
believe we can help stem this tide.
                         part i: supply chains
    Today, China is the global leader in cotton production and apparel 
manufacturing, as well as Asia's central sourcing hub for raw cotton 
fibers and other cotton and synthetic textile inputs such as yarns and 
fabrics. Powerhouse apparel producers in Asia, like Vietnam, Cambodia, 
Bangladesh, and others, source massive quantities of their textile 
inputs from China or through a Chinese supply chain. As previously 
mentioned, China's supply chains are mostly devoid of labor and 
environmental standards and rife with non-market practices like state-
owned enterprises, government subsidies, and forced labor.
    By contrast, Western Hemisphere supply chains feature the United 
States as the central hub for textile inputs, supported by FTAs that 
demand adherence to strong rules of origin and high labor and 
environmental standards, reciprocal market access, customs inspections, 
and other key requirements. In return, regional producers enjoy duty-
free access to the lucrative U.S. consumer market.
China's Forced Labor Textile and Apparel Supply Chains
    Unfortunately, China's supply chains are inextricably linked to the 
country's use of Uyghur forced labor in Xinjiang. China's XUAR region 
is a major cotton, textile, and apparel production center, accounting 
for 90 percent of China's total annual cotton crop and 20 percent of 
the entire world's cotton production, according to USDA.\4\ Further, 
roughly 20 percent of the cotton fiber that China's textile industry 
consumes is imported; that means around 72 percent of cotton products 
produced in China contain Xinjiang cotton. This cotton further taints 
finished textile and apparel products produced by countries throughout 
China's Asian supply chain.
---------------------------------------------------------------------------
    \4\ See: https://www.ers.usda.gov/amber-waves/2022/december/shift-
in-geography-of-china-s-cotton-production-reshapes-global-market/.


    Furthermore, Xinjiang cotton production has increased since the 
passage of the UFLPA--meaning these forced labor supply chains are 
unknowingly hanging in our closets and delivered to our doorsteps and 
undermining domestic manufacturers.
    At the same time, China is also a major purchaser of U.S.-grown 
cotton. As a result, it is commonplace for fibers, yarns, and fabrics 
from various countries of origin to be indiscriminately mixed at all 
stages of the production process, concealing and diluting the source 
and proportion of forced labor inputs found in a final garment. These 
harms are not limited only to cotton products but extend to cotton-
synthetic blends and other synthetic textiles as well. Due to the 
amount of cotton produced in the XUAR, and China's dominant position as 
a fiber, yarn, and fabric supplier for its own apparel production and 
apparel production throughout Asia, we can logically deduce the sheer 
impact China's forced labor practices have on Asian apparel production 
overall.
    To combat China's systematized use of forced labor in cotton, 
textile, and apparel production, Congress passed the UFLPA, which bans 
the importation of any product linked to Xinjiang and forced labor 
practices. Because the XUAR region provides the overwhelming majority 
of China's cotton and also supplies processed textile components, 
China's entire cotton textile and apparel supply chain is not only 
linked to forced labor but is dependent on these abhorrent practices. 
Since so much of China's textile and apparel industry is directly 
reliant on XUAR forced labor, we expected to see immediate impacts on 
this sector as a result of UFLPA's implementation last June.
    But what are we seeing instead? Since XUAR cotton production has 
increased, we should be asking where this massive quantity of cotton is 
going. Similarly, XUAR textile and apparel production has not abated. 
Where are those inputs and finished garments going? These products are 
banned from entering the United States, which remains the single 
largest export market in the world for Chinese-made textile and apparel 
products. Despite the heightened level of scrutiny, UFLPA enforcement 
reports show that these products are not being stopped in significant 
numbers at our borders--at least not in proportion to the expected 
volume of tainted trade. Undoubtedly, a very large portion of the 
billions of dollars of Chinese textile and apparel exports that enter 
the United States each year through direct shipment via ``de minimis'' 
entry, are still accessing our market even though they are in violation 
of UFLPA. For other portions of this trade, Chinese importers employ a 
myriad of ways to creatively disguise and obfuscate supply chains, 
reducing supply chain transparency and integrity.
    U.S. Customs and Border Protection (CBP) enforcement for UFLPA 
within our sector has been anemic and clearly not a priority. CBP has 
detained a mere $14 million in goods so far this year based on the data 
available through August--that is a decrease from last year. These 
statistics are published on the CBP website--advertising to those who 
want to skirt the rules that the United States Government is inspecting 
this trade at such a minimal level that you can import these products 
with virtually zero risk of detection.
    Several readily-available avenues currently exist to disguise a 
product's supply chain, allowing for easy circumvention of UFLPA, our 
FTAs, and other U.S. trade laws. Among these are the dilution or mixing 
of forced labor products with clean products, transshipping banned 
products through a third-party country, exploiting de minimis access, 
undervaluation/dumping, misclassification, and money laundering. These 
and other tactics are heavily exploited by producers in China and other 
Asian markets, and I will review a few of these in more detail below.
    In any case, with the massive quantities of banned goods produced 
in China, coupled with UFLPA's rebuttable presumption that any products 
linked to Xinjiang are the product of forced labor, we should see 
massive amounts of Chinese products, both shipped directly and through 
secondary markets, regularly stopped at our borders. As I will discuss 
in greater detail, the sheer volume of China's access to our market, 
combined with a miniscule level of UFLPA seizures in the textile and 
apparel sector leads to the conclusion that CBP efforts in this area 
are completely indefensible to date.
                          part ii: enforcement
    The large amount of duties collected on textiles and apparel 
(typically around 40 percent of regular duties collected by CBP) 
provides a hefty incentive for bad actors domestically and around the 
world to cheat the system and circumvent our trade laws. The situation 
has had a devastating impact on U.S. textile production and employment, 
as well as the broader Western Hemisphere textile and apparel co-
production chain. This wide-spread damage will persist if enforcement 
activity is not ramped up immediately to address China's use of forced 
labor and other banned practices.
    Included below are some examples of alarming trade data trends and 
declining enforcement statistics that help paint the picture of what 
industry is currently facing.
Enforcement of UFLPA
    UFLPA enforcement in the textile and apparel sector has been 
declining despite this sector being at the forefront of the problem. As 
noted earlier, with 20 percent of global cotton being produced in the 
XUAR and 72 percent of cotton products made in China containing 
Xinjiang cotton, we should be seeing stopped shipments at a much higher 
rate than is occurring.
   For scale, total U.S. imports of textile, apparel, and 
        footwear totaled $184 billion in 2022, and only $39 million in 
        shipments were detained for possible UFLPA violations over the 
        last 15 months--representing a mere two-tenths of a single 
        percentage point of apparel imports.
   When reviewing CBP's reported UFLPA activity in the textile 
        and apparel sector, we find the average number of UFLPA reviews 
        per month is down 50 percent by value ($1.7 million vs $3.5 
        million) and 24 percent by shipment count (53.8 vs 70.4) in 
        2023 compared to 2022.
   Although UFLPA specifically identifies cotton as a high-
        priority sector, other sectors have seen much greater levels of 
        scrutiny by CBP. From June 2022 through August 2023, CBP has 
        subjected 2,412 shipments of electronics equating to $1.5 
        billion to UFLPA reviews. By contrast, only 923 shipments of 
        textiles, apparel, and footwear equating to a mere $39 million 
        were reviewed for UFLPA. In July, CBP detained 6 shipments of 
        apparel from Nicaragua for suspected UFLPA violations--a first 
        for a Western Hemisphere FTA country. This highlights the 
        importance of taking a closer look at CAFTA-DR shipments for 
        FTA compliance.
Current CBP Testing Statistics and Findings
    From December 2022 to May 2023, CBP tested a total of 86 samples of 
apparel and footwear with 15 percent coming back testing positive for 
Xinjiang cotton. Reportedly, CBP has an exclusive contract with Oritain 
to conduct this testing and has paid the company $1.3 million dollars 
for UFLPA cotton testing to date.\5\ CBP was allocated $101 million to 
enforce bans on forced labor products. This raises questions as to why 
more testing is not being conducted to ensure compliance with UFLPA 
since the resources have already been allocated, and why CBP has not 
requested more resources from Congress to employ isotopic testing more 
broadly and more aggressively. Further, the fact that Oritain is the 
sole supplier of isotopic testing to the U.S. Government points to a 
potential conflict of interest, given that the company reportedly has a 
client relationship with Shein, the multi-billion dollar Chinese e-
commerce company well-documented for its poor labor and environmental 
practices and ties to Xinjiang cotton. At the very least, CBP should be 
utilizing more companies who can ramp up isotopic testing and other 
technology platforms to better enforce this trade.
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    \5\ See: https://www.reuters.com/markets/commodities/us-customs-
finds-garments-made-with-banned-chinese-cotton-documents-2023-09-01/.


Section 321 De Minimis Tariff Waivers
    These tainted forced labor products are coming directly to our 
doorsteps through de minimis shipments. Nearly 3 million de minimis 
shipments are coming into the United States each day, largely 
uninspected and tariff-free because of an unintended loophole in our 
trade law. These shipments are at high risk of not only violating UFLPA 
but also containing counterfeits or dangerous fentanyl or posing other 
dangers to consumers. By definition, these packages are deemed to 
represent an amount of trade that is too minimal for CBP to review or 
collect any tariffs on, including China 301 penalties. The United 
States received more than 1 billion individual packages claiming de 
minimis preferences in fiscal year 2023, an increase of nearly 700 
percent from the 150 million packages that entered via de minimis in 
2016. This is no longer ``minimal trade,'' and de minimis should be 
renamed ``de maximus'' trade given the overwhelming volume. De minimis 
makes it impossible to enforce UFLPA and rewards China and others with 
a de facto free trade agreement with no strings attached.
    This exponential growth in de minimis imports is the direct 
consequence of faulty CBP rulings that have allowed mass distributors, 
such as Shein, Temu, Amazon, and others, to facilitate millions of 
direct duty-free, and virtually uninspected de minimis shipments each 
day. Last year, Bloomberg published a report by Sheridan Prasso who had 
isotopic testing performed on two batches of cotton products from 
Shein, whose entire multi-billion-dollar business was created by de 
minimis. Bloomberg reported that ``first batch of Shein garments, which 
included pants and a blouse, matched both Xinjiang samples with only 
slight variations,'' while the second batch showed higher variations of 
isotopes, but well ``within the range that indicates a very likely 
Xinjiang origin.'' Another item was determined to contain XUAR cotton 
mixed with other materials, while content for another was misclassified 
entirely.\6\
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    \6\ See: https://www.bloomberg.com/news/features/2022-11-21/shein-
s-cotton-clothes-tied-to-xinjiang-china-region-accused-of-forced-labor.
---------------------------------------------------------------------------
    It defies basic common sense to pretend that the billions of 
dollars in these duty-free shipments transacted each day are actually 
``de minimis.'' They are not de minimis to U.S. manufacturers who are 
seeing a substantial erosion of market share; U.S. workers who are 
losing their jobs; small Main Street brick-and-mortar retailers who can 
no longer compete with cheap forced labor products; and FTA partners 
who are being displaced from the U.S. market.
    As a result, under the U.S. de minimis tariff waiver system China 
and everyone else effectively has FTA access to the United States for 
products under $800. This access is a pure gift and comes with no rule 
of origin requirements, reciprocal market access, or labor or 
environmental standards. To put this another way, under our de minimis 
program, the United States provides duty-free, direct-to-consumer FTA 
access for all Chinese products, including those made with forced 
labor, that are priced under $800. China does not offer other countries 
the same generous program, maintaining its own de minimis level at a 
mere $7.
    To be clear, this arrangement is directly benefiting the Chinese 
government's forced labor regime in the XUAR. CBP reports that China 
and Hong Kong are the top two sources for de minimis shipments and 
estimates that half of all de minimis packages entering the United 
States contain textiles and apparel, the production of which has 
pervasive linkages to Xinjiang. The de minimis forced labor loophole is 
severely undermining businesses, our FTAs, and our ability to enforce 
our laws regarding forced labor products entering the U.S. marketplace.
    Last time I checked, UFLPA did not have an exemption for forced 
labor products that are routed to the United States via de minimis 
rather than through a formal customs entry. We may well ask why CBP is 
not doing more to enforce UFLPA regarding de minimis shipments.
Free Trade Agreement False Origin Claims
    Beyond UFLPA evasion and out of control de minimis shipments, we 
are also confronting a lack of customs enforcement of our FTA rules. 
The United States has an elaborate system of FTAs that provide certain 
trading partners with lucrative duty-free benefits. In the textile 
sector, these benefits are tied to a yarn-forward rule of origin, 
mandating for most textile and apparel items that production steps from 
the yarn stage forward must be conducted in the FTA region.
    The FTA system is defrauded when importers claim FTA tariff-free 
treatment even though the finished item is comprised of yarn or fabric 
sourced from China or another non-FTA country. This is often 
accomplished by falsifying documents showing that textile inputs were 
sourced from a legitimate textile manufacturer in the United States.
    Trade statistics reveal that the CAFTA-DR region is importing 
billions of dollars of textile inputs (yarns and fabrics) from sources 
outside of the trade bloc, namely Asia. Major textile exporters in Asia 
including China report sending 875 million kilograms of yarns and 
fabrics valued at $6.3 billion to the CAFTA-DR countries and Mexico in 
2022. That is a 33 percent increase by value and a 111 percent increase 
by quantity from 2018's pre-pandemic levels. Unit values also dropped 
38 percent over this time frame. As the CAFTA-DR region is largely 
oriented around producing duty-free apparel destined for the U.S. 
market, logically these imported textiles are likely finding a backdoor 
entry point to the United States through this FTA region, and similar 
concerns exist with USMCA.
    For example, the renegotiated USMCA free trade agreement included 
an updated provision that requires all pocketing fabric used in apparel 
to originate in the FTA region, produced by either the United States, 
Mexico, or Canada. This rule went into effect in two stages, with a 
partial implementation beginning January 1, 2022 and all remaining 
products requiring regional, yarn-forward compliant pocketing as of 
January 1, 2023. Previously, pocketing fabric was permitted to 
originate from any global supplier. Despite U.S. pocketing fabric 
manufacturers having a clear understanding of the market and ramping up 
production in anticipation of this new requirement, to date there has 
been a dearth of orders for pocketing fabric or pocketing yarn for the 
nearly $3.2 billion \7\ worth of apparel entering the United States 
from Mexico annually. CBP has been unable or unwilling to aggressively 
address this issue and as a result workers are being laid off.
---------------------------------------------------------------------------
    \7\ U.S. Department of Commerce; OTEXA Major Shippers Report.
---------------------------------------------------------------------------
    Sadly, this is in keeping with trends our industry has been 
monitoring that show FTA enforcement for textiles has declined 
substantially in recent years. In fiscal year 2022, CBP's illegal 
transshipment verifications, which incredibly can now be conducted 
``on-line,'' resulted in a total of 38 semi-virtual and on-site 
inspection visits. This compares to a total of 139 on-site visits CBP 
conducted in fiscal year 2018, which reflects CBP activity in a pre-
pandemic year. In addition, commercial fraud penalties levied were just 
$2.5 million for fiscal year 2022 compared to $19 million in fiscal 
year 2018. When CBP does pull product for lab testing, they report a 50 
percent discrepancy rate in the samples, indicating that 
misrepresentations are prevalent.
    Noting the adverse impacts that subpar or non-existent enforcement 
has on a U.S. business that invests in American manufacturing with the 
promise of increased production and export markets, it would be better 
to have no FTA than to have an FTA that is not enforced.
                            recommendations
    As an innovative and dynamic domestic industry, American textile 
manufacturers can compete against the best in the world when we can do 
so on a level playing field and under the right economic conditions, 
which are currently fueling a manufacturing slowdown in the U.S. 
textile sector that I represent. Unfortunately, despite the fact that 
the United States has strong rules of origin in our FTAs, a robust ban 
on forced labor products, and an entire agency tasked with customs 
enforcement, the playing field today is so unbalanced. This is 
compounding the economic challenges the industry is facing, and 
creating a serious threat for U.S. textile manufacturers, unlike 
anything many have weathered before. We urge Congress to take immediate 
action to address the roots of this severe problem and we need the 
committee's direct intervention.
Congress Must Get Aggressive on Oversight of Customs Enforcement
    Over the past 20 years or so, the focus at CBP has become 
increasingly oriented toward trade facilitation--in other words, 
ensuring that trade is frictionless and enforcement is minimal. This is 
a major shift from previous years, when customs enforcement was housed 
under the jurisdiction of Treasury, prior to the formation of the 
Department of Homeland Security (DHS). As DHS's founding was predicated 
on the need for increased border security, it is not a surprise that 
enforcement of trade laws seems to have shifted much lower on the list 
of CBP's priorities.
    However, as I have demonstrated above, CBP's inability to conduct 
adequate enforcement has real consequences here in the United States--
with communities devastated by manufacturing facilities closing--and 
throughout this hemisphere where apparel production is a top employment 
sector. If current trends are allowed to continue, manufacturing and 
job destruction in the United States caused by insufficient enforcement 
will in turn put 2 million Western Hemisphere apparel jobs in jeopardy. 
When workers in our FTA partner countries lack employment 
opportunities, they will seek those opportunities elsewhere, resulting 
in increased outward migration and pressure on our border.
    We strongly recommend the Congressional committees undertake an 
aggressive posture toward oversight of enforcement of UFLPA and our 
customs laws. Congress can play a key role in lighting a fire under 
customs enforcement officials and demanding results--and should require 
CBP officials to testify regularly to the committee on its activities 
and outcomes. The industry and recent letters from Congressional 
leaders have requested the White House publicly announce an aggressive 
plan for stepped-up UFLPA enforcement and FTA enforcement and use its 
statutory authority to close the de minimis loophole. We need the 
committee to amplify this urgency and hold CBP accountable because of 
the implications to our domestic supply chains that are under direct, 
urgent threat now.
Congress Must Aid American Lives and Human Rights by Closing the De 
        Minimis Forced Labor Loophole
    Today's hearing has highlighted that fentanyl entering the United 
States via de minimis is killing our communities. This is an economic 
fire, a health fire, and human rights fire--and we need it extinguished 
immediately. In a similar vein, Chinese forced labor products are 
killing jobs in our rural communities where many textile facilities 
operate; to say nothing of the deplorable conditions under which 
oppressed Uyghurs are forced to slave to produce clothes for pennies 
and wealth for China. Congress must ensure that UFLPA is enforced to 
the greatest extent possible--and this means shutting down ``China's 
FTA'' through de minimis. There have been many bipartisan voices who 
have underscored the severity of this loophole including:

``This is a free trade agreement with China.''--Ways and Means Chairman 
Jason Smith.
``It puts American businesses at a competitive disadvantage while 
flooding American consumers with undoubtedly harmful products.''--Ways 
and Means Trade Subcommittee Ranking Member Earl Blumenauer.

    Due to a lack of UFLPA enforcement on de minimis shipments, China's 
forced labor products enjoy better access to the U.S. market than 
products from any of our FTA partners. Think of that: billions of 
dollars' worth of Chinese apparel, tainted by forced labor, getting VIP 
treatment on its way straight to our front doors at the expense of 
workers and manufacturing in the United States and our critical 
regional supply chains. We must stop China's forced labor regime and 
support American companies and workers who are being exploited as a 
result.
    Congress must do everything it can to close this gaping loophole, 
including holding high-profile hearings, advancing robust legislation, 
pressing the administration to initiate rulemaking, and utilizing every 
other tool at its disposal. Further, Congress needs to push the 
administration to use its authorities to close the de minimis loophole 
given how wildly out of control the situation has become. The 
administration has such authority under existing executive authorities 
and rulemaking processes, but has not utilized them to date. We urge 
the committee to weigh in aggressively with the administration on this 
matter. We can't emphasize this point enough.
    We strongly encourage the committee to hold U.S. Customs and Border 
Protection accountable and call CBP before the committee:
   Utilize the UFLPA Entity List More Robustly as a 
        Deterrent.--The UFLPA Entity List is designed to stop market 
        access to the United States for facilities utilizing forced 
        labor products. Yet, only 27 entities have been identified 
        overall, and for our sector--only a handful of entities have 
        been added to the list from the world's largest textile- and 
        apparel-producing nation utilizing XUAR cotton in 72 percent of 
        its output. As a result, this is not a significant deterrent if 
        the administration is not naming more entities who are in non-
        compliance. Why has the administration underutilized this 
        resource?
   Make Withhold Release Orders Substantially More Effective.--
        Our Withhold Release Order process is broken and ineffective to 
        deter problematic trade. It simply names a company/entity 
        utilizing forced labor and banning that entity from market 
        access to the United States. Given the pervasiveness of the 
        cotton supply chain--to make a WRO substantially more 
        effective, we must expand the WRO tool substantially.
   CAFTA-DR/USMCA/FTA Compliance.--Given the massive influx of 
        yarns and fabrics from Asia that have been imported into CAFTA-
        DR and USMCA countries, likely falsifying origin, why has CBP 
        inspections for these items declined so substantially over the 
        past 5 years?
   Isotopic Testing.--Congress allocated $101 million for UFLPA 
        enforcement. To date, based on a Reuters report, CBP has only 
        utilized $1.3 million in funding. Why is CBP not utilizing this 
        resource more and other tools to mitigate this trade? How is 
        CBP ensuring that there is not a conflict of interest in 
        utilizing only one isotopic testing company that has specific 
        client relationships outside of the Government contract? 
        Furthermore, why is CBP not utilizing more companies that can 
        provide DNA analysis on cotton and other methodologies that 
        could help with more effective enforcement? In addition, why is 
        CBP not utilizing isotopic testing on garments at U.S. retail 
        to determine origin? What statute prohibits CBP from conducting 
        that kind of testing?
   Stepping-up Inspections and Penalties, and Providing a 
        Strategic Roadmap to Industry on Aggressive, Proactive Efforts 
        Moving Ahead.--We will continue to experience substantial 
        demand destruction due to the current lack of an effective, 
        public, stepped-up enforcement strategy for textiles and 
        apparel under UFLPA on shipments from China and other secondary 
        Asian suppliers, and also in our FTAs. We simply don't have 
        time to waste and would encourage the committee to ensure CBP 
        is publishing an accountability plan on enforcement activities 
        with metrics, and ensure it is leveraging all its authorities 
        to step up penalties in this sector.
    Furthermore, we strongly support the recent Senator Tillis-Senator 
Brown-led letter \8\ asking the administration to immediately convene a 
top-level interagency working group to develop and announce an 
aggressive action plan for textiles and apparel enforcement, given the 
economic consequences facing both our industry and our trade partners 
in the Western Hemisphere. This plan must include substantially-
increased enforcement for UFLPA and FTA inspection/verification, plus 
using executive authorities on de minimis to stop this harmful trade. 
We would strongly appreciate the committee weighing in with the 
administration on this high-priority request.
---------------------------------------------------------------------------
    \8\ See: Senator Brown-Tills Letter.
---------------------------------------------------------------------------
    Simply put, we need your help in amplifying this urgent need. We 
think this hearing is an important step and we look forward to being an 
active partner with you in any way possible to advance your efforts.
                               conclusion
    For far too long we have permitted China to set the global agenda, 
undermining U.S. values and ideals and harming our workers and trading 
partners in the Western Hemisphere. With Congress' help, we can shut 
down express U.S. access for forced labor products, hold China 
accountable for its unfair trade practices that undermine U.S. and 
regional competitiveness, and end the exploitation of the Uyghur people 
through a systematic slave labor regime.
    Not only are we failing to stop forced labor trade that Congress 
explicitly acted to address through UFLPA, but it is being rewarded 
with duty-free access under the de minimis provision of our trade law. 
What was once an obscure administrative tool afforded by Congress to 
CBP to improve efficiency for travelers, de minimis has become a 
superhighway for illicit goods as a result of ineffective rulemaking 
and a lack of adequate Congressional oversight.
    I thank you for the opportunity to testify today and for the 
committee's attention to these critical issues. I look forward to 
answering your questions and working with you in the weeks and months 
ahead to ensure better enforcement of UFLPA and other trade laws.

    Mr. Bishop. Thank you, Ms. Glas.
    I now recognize Mr. Peter Mattis for 5 minutes for his 
opening statement.

   STATEMENT OF PETER MATTIS, PRESIDENT, JAMESTOWN FOUNDATION

    Mr. Mattis. Thank you, Chairman Bishop, and thank you 
Ranking Member Ivey for your time and attention to this issue.
    It's almost 3 years since the Congressional Executive 
Commission on China held a hearing on what was taking place in 
Xinjiang and the Uyghur genocide and the forced labor issue. 
Here we are today discussing the implementation of what was a 
very long process to get legislation introduced and passed. 
Thank you for your time and attention to this. And to the 
issue--the question of oversight.
    The Uyghur Forced Labor Prevention Act was designed to help 
address part of genocide being committed by the People's 
Republic of China ruled by the Chinese Communist Party. Forced 
labor contributes to this genocide by reducing and diluting the 
Uyghur population in Xinjiang Uyghur Autonomous region, 
dispersing families, and as Nicole Koholor of the Holocaust 
Museum pointed out, separating Uyghur men and women, and 
keeping them apart for extended periods of time.
    The rebuttable presumption is the core of this bill, and it 
has two parts: The first was drawing the line around the 
Xinjiang Uyghur Autonomous region, recognizing that if you 
can't get in and look and inspect, then you can't have any 
confidence about what is being done. U.S. companies started 
reporting to the U.S. Government and later to the U.S. Congress 
really is the spring and summer of 2018, that their inspectors 
were being detained and not given access to facilities there.
    But the core part of the--another piece of this was going 
after the participants in the labor transfer programs, because 
if we just drew a line around the Xinjiang Uyghur Autonomous 
region, we would have inadvertently created an incentive for 
Beijing to accelerate its genocide and to further depopulate 
the Uyghur region by moving them out of the Xinjiang Uyghur 
Autonomous region. You had to have both parts of this to work 
in tandem.
    The lion's share of this burden was handed to the Forced 
Labor Enforcement Task Force created by USMCA agreement, the 
FATF. To date, I think you'll notice that there have been 27 
entities, plus their subsidiaries, put on this. But similar to 
the points that Ms. Glas made about de minimis loophole and the 
gap between sort-of the universe of what could be and the 
universe of what actually is inspected is similar in this case.
    A research group at Sheffield Hallam University, led by 
Laura Murphy, identified at least 55,000 entities that could be 
put on the entity list, and yet, we have 27. How much is being 
missed? How many de minimis shipments? How many in cotton? How 
many in all of the other materials that have not yet 
necessarily been prioritized? CBP is starting to look at PVC 
pipes. But what about rayon? What about apparel products that 
don't have any cotton in them? What else is there?
    Because as CDC uncovered, and as researchers affiliated 
with Louisa Greve's organization have found there is a full 
range of consumer products. It's not just apparel. It's in 
polysilicon. It's in electronics. It could very well be in your 
iPhone, or any other sort of mobile phone you carry. So if we 
don't make the entity list part of this, we're simply not 
taking care of the intent of the law, and we're creating bad 
incentives, or perverse incentives, that we want it to work 
against.
    So to this end, I think we need to be thinking about what 
are ways in which the process can be eased and smoothed out? So 
as Mr. Ivey noted, it's possible that there's too much of a 
process within the FATF, that it's an interagency process to 
get to yes, rather than an interagency process to stop 
nominations.
    I think we should assume that U.S. Government departments 
that would nominate an organization for inclusion on the entity 
list are going to do their due diligence and are responsible 
stewards of public trust. To that end, I think any FATF member 
that would nominate an organization for inclusion on the entity 
list or labor transfer program, that it should be approved and 
added to the entity list within 14 days unless there's 
convincing evidence to refute that nomination.
    Any other U.S. Government department should have the power 
to make that nomination, and it should probably have a longer 
time line, say 30 to 60 days. NGO's also can help, but I don't 
think you can have that kind of automatic inclusion. But the 
Uyghur Forced Labor Prevention Act explicitly notes the role 
that NGO's have in providing information to the U.S. Government 
to better enforce this law.
    Second, I know that this is not necessarily Homeland 
Security jurisdiction, but it's worth keeping in mind: you 
mentioned the sanctions piece. The Uyghur Forced Labor 
Prevention Act modified the Uyghur Human Rights Policy Act to 
add forced labor as a concern. But to date, just like all the 
other aspects of the UHRPA, there have been no sanctions that 
have been provided under this. It seems like this would be a 
tool that would be useful even where entity lists or withhold 
release orders may not work.
    Last, I'll just say that there seems to be an issue with 
China competence across the U.S. Government. If DHS researchers 
are trying to use Google Translate to hunt down things related 
to these entity listings, we've got to do a better job and 
we've got to think about the resourcing, whether it is in terms 
of both Government capability and the support for this 
competency in the private sector that can be used to support 
these concerns.
    Thank you very much.
    [The prepared statement of Mr. Mattis follows:]
                   Prepared Statement of Peter Mattis
                            October 19, 2023
    The Uyghur Forced Labor Prevention Act (Pub. L. 117-78) was written 
to address one aspect of the Chinese Communist Party's (CCP) on-going 
genocide of the Uyghur people--a situation that has been recognized as 
genocide by both the Trump and Biden administrations. Evidence 
continues to accumulate showing that the CCP has a systematic policy to 
subjugate Uyghurs and others of Turkic or non-Han ethnicities in the 
Xinjiang Uyghur Autonomous Region (XUAR). A core component of that 
policy is forced labor. Forced labor contributes to the genocide as 
part of Beijing's policies to reduce and dilute Uyghur population and 
eradicate Uyghurs' cultural identity by separating families, dispersing 
Uyghurs across the People's Republic of China (PRC), and increasing Han 
migration to the region. The driving purpose behind the law was that 
Americans should not be complicit in this genocide, nor should the CCP 
be allowed to profit from it.
    To fulfill that purpose, the Uyghur Forced Labor Prevention Act 
created a ``rebuttable presumption'' that goods made in the XUAR or 
made with raw materials produced in the XUAR and by companies 
participating in PRC coercive labor transfer programs that moved 
Uyghurs outside of the XUAR to work would be considered made with 
forced labor and ineligible for import into the United States. The 
PRC's use of large-scale and systemic forced labor in the region and 
practice of preventing routine monitoring and due diligence in the XUAR 
and other places that use Uyghur forced labor meant that previous 
practices related to identifying forced labor products (and other 
supply chain risks) were insufficient. It was simply not possible to 
identify specific locations where forced labor was employed and trace 
those products or materials through the supply chain to the United 
States.
    The Uyghur Forced Labor Prevention Act places a large burden on the 
Forced Labor Enforcement Task Force (FLETF). The FLETF was authorized 
by the USMCA Implementation Act and officially established by Executive 
Order 13923. The Secretary of Homeland Security chairs the FLETF, and 
other members include representatives from the Department of State, the 
Department of the Treasury, the Department of Justice, the Department 
of Labor, and the Office of the United States Trade Representative. The 
Secretary also can invite other relevant parts of the U.S. Government, 
such as the National Security Council, to participate.
    The law required FLETF to hold a public comment period and conduct 
a public hearing to ensure consultation with the private sector and 
civil society as part of its process for drafting an implementation 
strategy. The Uyghur Forced Labor Prevention Act mandated that the 
strategy for ensuring the rebuttable presumption was enforced included, 
among others, recommendations for U.S. Customs and Border Protection, 
guidance for importers on how to keep their supply chains clean, and a 
plan for working with civil society and private-sector organizations on 
enforcement.
    The FLETF also has responsibility for maintaining the entity lists 
created under the Uyghur Forced Labor Prevention Act. The entity lists 
were created, because the PRC's labor transfer programs moved Uyghurs 
outside the XUAR. Drawing a line around the XUAR for the rebuttable 
presumption would not have been enough and would have created the 
unintended incentive for Beijing to move Uyghurs out of the XUAR, where 
their coerced work product would not be subject to the rebuttable 
presumption. Such an unintended incentive for the PRC to depopulate the 
XUAR, especially of its Uyghur population, arguably would have 
accelerated the genocide. The entity lists were intended to create a 
mechanism to which FLETF members could identify programs and 
participants whose use of Uyghur forced labor should make them subject 
to the rebuttable presumption.
    This task, however, appears to be beyond the capacity of the FLETF. 
As I understand the original purpose of the FLETF, it was never 
intended to serve as an operational interagency body. Executive Order 
13923 states that participating agencies will need to fund their own 
related staff work. Combatting forced labor has been U.S. policy since 
1930, so one could be forgiven for lacking sympathy for officials at 
the FLETF members complaining about a lack of budget and personnel. But 
resources identify priorities. In sum, the Uyghur Forced Labor 
Prevention Act gave elements of the policymaking and enforcement to a 
body that was never intended or sufficiently resourced to be an active 
operational element of the interagency process.
    The Uyghur Forced Labor Prevention Act entity lists are a critical 
element of fulfilling the law's intent, because, absent an effort to 
create a comprehensive listing of these coercive labor transfer 
programs and participating entities, the U.S. Government is creating an 
inadvertent incentive for the CCP to accelerate the genocide and 
depopulate the XUAR of its Uyghur and other Turkic or Muslim 
minorities. Both parts of the rebuttable presumption need to be 
operative. The more comprehensive these lists become, the more guidance 
is available for companies on with whom to partner and for U.S. Customs 
and Border Protection on where to focus their efforts.
    However, only 27 unique entities and their subsidiaries have been 
added to the entity list since June 2022 when the rebuttable 
presumption went into effect and the FLETF's strategy was delivered. 
Nearly a full year passed before 2 entities and 8 of their subsidiaries 
were added to the entity list on June 12, 2023. An additional 2 
entities were added on August 1, 2023, and 3 more on September 26, 
2023. This relatively small number of entities barely scratches the 
surface of potential listings. A research team led by Laura Murphy of 
Sheffield Hallam University identified roughly 55,000 companies that 
likely or certainly warrant being on the entity lists. Moreover, many 
of the entities among these 27 companies already were subject to 
Withhold Release Orders that prevented their goods from entering the 
United States.
    The gap between the 27 entities listed and the 55,000 entities that 
probably should be listed also suggests that enforcement of the Uyghur 
Forced Labor Prevention Act, more broadly, suffers from a similar gap 
in enforcement. U.S. Customs and Border Protection is stopping a great 
deal of goods, but how much is entering the United States through the 
de minimis channel? How much of the seafood being imported should be 
subject to the rebuttable presumption? How much of the goods or 
materials made in or sourced from the XUAR enter the United States 
through third countries?
    At least some of the problems in building out the entity lists come 
from a lack of resources, particularly related to knowledge, skills, 
and access related to researching PRC-related topics. Much of the 
research necessary to support this work requires Chinese-language 
ability and the ability to access websites, corporate records, 
commercial databases, and other relevant information on the other side 
of the Great Firewall. Beijing's information crackdown on due diligence 
and consulting firms as well as more effective tools for tracking and 
blocking the activities of foreign users of the PRC internet has raised 
the bar for researchers even higher.
    In light of the above framing, as a concerned individual 
representing my own views, I would make the following recommendations 
for improving the FLETF's ability to guide the enforcement of the 
Uyghur Forced Labor Prevention Act and on implementation of the act 
more generally:
   The White House and the Secretary of Homeland Security must 
        signal to the interagency that expanding the entity lists 
        appropriately and comprehensively is a priority. The lists were 
        intended to be a responsive tool rather than the cumbersome 
        legal process for a Withhold Release Order. The demand signal 
        is important for setting day-to-day priorities, and it must 
        come from the top.
   In next year's budget cycle, Congress and the Biden 
        administration should work on identifying the budgetary and 
        personnel requirements to better staff FLETF so that it can 
        fulfill its mandate effectively.
   To improve implementation of the entity list process, an 
        interagency process should be required only for removing or 
        blocking the addition of entities. Instead, any FLETF member 
        should be able to nominate an entity for inclusion, and, unless 
        the FLETF chair provides evidence to refute the addition of the 
        nominated entity or labor transfer program within 14 days, then 
        they will be added to the entity list.
   Relatedly, other U.S. Government agencies that are not FLETF 
        members also should be able to nominate entities for automatic 
        inclusion after a set period of time to allow the task force to 
        review. In this case, a longer time line to refute should be 
        considered, perhaps 30 to 60 days.
   Although it would be advisable to include non-governmental 
        organizations in this process, the potential for abuse to stall 
        the entity list process requires more careful consideration 
        than simply setting a time line.
   The Uyghur Forced Labor Prevention Act amends the Uyghur 
        Human Rights Policy Act (Pub. L. 116-145) to include 
        involvement in forced labor as one of the sanctionable 
        offenses. The sanctions authorities under the Uyghur Human 
        Rights Policy Act have not been used on a single PRC or CCP 
        official in any of the categories, much less involvement in 
        forced labor as provided by the Uyghur Forced Labor Prevention 
        Act. Instead of requiring the State Department to report to 
        Congress when actions are taken--creating a disincentive for 
        U.S. officials in the Executive branch who do not want to go 
        through the process of releasing a report to Congress to take 
        action--Congress should require reports every 60 days that 
        these sanctions authorities go unused. These reports for why 
        authorities are not used should be required, given prevalence 
        of forced labor and the Department of State's determination 
        that genocide is occurring. As long as those two conditions 
        hold, inaction should trigger Congressional oversight.
   The lack of PRC-related research skills and capabilities 
        among the FLETF members, particularly in those departments 
        without a traditional foreign policy focus, suggests the need 
        for a larger effort to build ``China competence'' and 
        capabilities across the U.S. Government that can be leveraged 
        across the Government.
   Congress should create a new open-source information and 
        intelligence organization to collect, process, and exploit 
        publicly- and commercially-available information. The nature of 
        the PRC and CCP systems require the sprawling and overlapping 
        central, provincial, and local structures to communicate many 
        objectives and guidance out in the open. Open-source research 
        has been the foundation for much of the global conversation 
        about the Uyghur genocide and forced labor. The PRC, however, 
        is getting much better at restricting access and shutting off 
        access to researchers who look at sensitive topics. The United 
        States needs a professional, Government-scale effort rather 
        than relying on hobbyists and individual researchers for such 
        work.
   Congress should invest in expertise building inside and 
        outside the U.S. Government. Researching sensitive topics, like 
        human rights abuses, requires a great deal of knowledge, and 
        the number of people inside or outside Government who can 
        perform this work are much smaller than Americans should be 
        comfortable with. Although the growth of private companies 
        doing some of this work is welcome, they profit from 
        (rightfully) keeping their information and tools proprietary. 
        The U.S. Government and public interest is best served by 
        information that can be discussed publicly. I have not read a 
        single one of the various U.S.-PRC competition bills over the 
        past three Congresses that has made investments in developing 
        expertise and language skills at sufficient scale. This stands 
        in stark contrast to the early Cold War, when the White House 
        and Congress understood the need for building a broad base of 
        public and private-sector expertise.

    Mr. Bishop. Thank you, Mr. Mattis.
    I now recognize Ms. Greve for 5 minutes for her opening 
statement. Did I get that right this time?

STATEMENT OF LOUISA GREVE, DIRECTOR OF GLOBAL ADVOCACY, UYGHUR 
                      HUMAN RIGHTS PROJECT

    Ms. Greve. Thank you both so much for the opportunity to 
testify. The passage of the Uyghur Forced Labor Prevention Act 
in December 2021 was truly occasion for hope for Uyghur 
Americans, and for the Uyghur Diaspora more broadly around the 
world that there was actual economic leverage being brought to 
bear through just one aspect of the genocide consuming their 
people.
    I want to emphasize the incremental nature of the 
implementation of this bill. The law required a strategy to be 
published after 6 months. This is a relatively fast and short 
turnaround time to provide the strategy for a complicated set 
of enforcement that is different from previous methods of 
enforcing the import ban under U.S. law.
    Several of the things that are coming along step by step, 
including adding additional targeted sectors from cotton, 
tomatoes, and polysilicon to include, as well, all kinds of 
minerals, including the cobalt and the lithium that are 
required for the renewables. Just last week, we have two 
entirely new sectors identified by NGO reporting, C4ADS issued 
a report on all mining in Xinjiang and the Xinjiang region, 
which implicated through ownership and trade ties over 200 
global corporations and including publicly-traded companies 
that are traded in our own retiree funds.
    The last one is seafood. So let me give you the headline. 
It's a bit shocking. The name of the report is, ``The Uyghurs 
Forced To Process The World's Fish.'' The report from the Ocean 
Outlaw Project found that Uyghurs subjected to forced labor in 
the processing plants on land are processing, ``much of the 
seafood sent to America and Europe.'' This doesn't--this 
includes fish that may be advertised as local catch, but then 
it's processed in China and then sent back out. Extremely 
concerning.
    Other sectors include luxury vinyl flooring, automotive, 
and the list goes on. This does take time to implement, but 
there is a partnership not only as contemplated in the law but 
in CBP and FATF's own outreach to CSOs. There is a clear 
commitment to receive information from the public, from 
researchers, such as Dr. Laura Murphy, there's a dedicated 
email address, which I have to say is not very normal in my 
experience with Government agencies.
    So we all need to take advantage of that, and then we need 
CBP and FATF to do their part to process the information. I do 
believe there's a capacity issue with China's language ability 
and staffing. Transparency is something that has been improving 
and needs further oversight and encouragement to continue. 
There is now a UFLPA data dashboard. It contains information 
about the shipments stopped. This didn't used to exist at all. 
So thanks to global concern about Uyghurs, and NGO and 
Congressional concern, this transparency is much stronger with 
this data dashboard.
    Let me move to de minimis as a huge black hole. I would 
suggest that the solution to ensure that if the amount cannot 
be lowered, if there is resistance because of the intention to 
ease normal trade, at a minimum, Congress should ensure that 
countries where there is a high risk of forced labor, 
especially state-imposed forced labor--it's a state policy. 
That entire country needs to realize that their business 
interests will be hurt because they will not have access to 
this no tariff, and low inspection channel. There are bills. 
There's a Senate bill, and there's also a bicameral bill called 
the Import Security and Fairness Act, which will do just that.
    I'd also like to recommend that Congress press CBP on 
greater transparency on non-ocean shipping. People may not be 
aware that shipments into the United States through railroad 
and air are not provided to the public in the same way. Ocean 
shipping manifests are provided, and then we have private-
sector data aggregators that put that information up. Then 
NGO's and market competitors in the American market can see 
where the shipments are coming and provide e-allegations and 
give tips to the Government about where there may be violations 
of the forced labor import ban. That's totally missing for air, 
road, and rail.
    We've already talked about the entity list, certainly this 
is urgent. Then, finally, penalties. We are unaware of any 
penalties being imposed for any importer that is knowingly 
benefiting or providing false information to CBP in rebutting 
the presumption of forced labor, and it's urgent. Any law that 
is seriously being enforced should also come with penalties for 
violators.
    Then finally, we have a strong--a real issue with the 
reexports. We need data on what reexports are happening after a 
detention inspection and then denial of entry. We also need 
active diplomacy, which is in Section 4 of the law that 
involves more than one entity, not just the State Department, 
but also our enforcement agencies to make sure that other 
countries don't become the dumping ground for Uyghur forced 
labor.
    Thank you.
    [The prepared statement of Ms. Greve follows:]
                       Statement of Louisa Greve
                            October 19, 2023
    I'd like to begin by thanking Subcommittee Chairman Dan Bishop and 
Ranking Member Bennie Thompson for the opportunity to testify at this 
important hearing.
    About UHRP: The Uyghur Human Rights Project (UHRP) promotes the 
rights of the Uyghurs and other Turkic Muslim peoples in East 
Turkistan, referred to by the Chinese government as the Xinjiang Uyghur 
Autonomous Region, through research-based advocacy. UHRP was founded in 
2003 as a project of the Uyghur American Association and became an 
independent nonprofit organization in 2016.
    UHRP is a member of the Steering Committee of the Coalition to End 
Forced Labour in the Uyghur Region, a global coalition of Uyghur civil 
society organizations, trade unions, anti-modern-slavery, and anti-
human-trafficking organizations.
    My testimony addresses the following topics:
   Incremental nature of UFLPA implementation enforcement steps
     Strategy published 6 months after enactment, as required 
            under the law (June 21, 2022)
     On-going additions of targeted sectors, including 
            agricultural products and aluminum, with future 
            examinations of mineral and seafood sectors expected
     Transparency: CPB's ``UFLPA data dashboard'' launched 9 
            months after law went into effect
     New tracing tools: $7.8 million contract with Sayari 
            announced in November 2022
     First-ever CBP Forced Labor Technical Expo, over 2 days in 
            March 2023.
   Enforcement challenges, weaknesses and recommendations:
     Addressing de minimis ``black box''
     Need for transparency on rail, road, and air imports
     Slow pace of additions to the UFLPA Entity List and 
            challenges of interagency coordination among 7 agencies in 
            the Forced Labor Enforcement Task Force (FLETF)
     Penalties for ``knowingly benefiting'' from forced labor 
            imports
     Ensuring our trading partners do not become ``dumping 
            grounds'' for Uyghur forced-labor goods--urgency of 
            progress in Europe, Canada & Mexico, Japan, and others.
      incremental nature of uflpa implementation enforcement steps
Strategy published 6 months after enactment, as required under the law
    The UFLPA required DHS, as the lead agency of the seven-agency 
Forced Labor Enforcement Task Force (FLETF), to report to Congress a 
strategy for enforcement, no later than 6 months after enactment. The 
strategy was duly published on (June 21, 2022). Credit is due for on-
time publication of the Strategy within this tight time frame for 
standing up a new type of enforcement. As a region-wide WRO at the 
subnational level rather than national level and covering every input 
at every step of the supply chain down to raw materials (mining, 
agriculture, and industrial processing), this is a challenging mandate 
for implementation.
On-going additions of targeted sectors
    The strategy explicitly contemplated adding additional product 
sectors to the original list of high-risk industries (see next page), 
as new research and new data emerges over time. Since implementation, 
new industries such as agricultural products and aluminum have been 
publicized as being at high risk of Uyghur forced labor. UHRP urges and 
expects that on the basis of two new reports this month, CBP will now 
heighten scrutiny of the mineral and seafood sectors.
   In January 2023, at least one law firm published a notice 
        about CBP targeting of aluminum, which the firm noted as a new 
        sectoral target. (Trade Compliance Flash: Prepare for CBP's 
        UFLPA Enforcement Against Aluminum Products).
   Also in January 2023, CBP published an article highlighting 
        detention and examination of fruit at the ports of Newark, 
        Oakland, and Los Angeles, in which CBP credited NGO reporting 
        for conducting research enabling CBP to take action (UHRP's 
        August 2022 report, Fruits of Uyghur Forced Labor: Sanctioned 
        Products on American Grocery Store Shelves).\1\
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    \1\ Available at: https://www.google.com/
url?sa=t&source=web&rct=j&opi=89978449&url=- https://uhrp.org/wp-
content/uploads/2022/09/Red-Dates-Report-Formatted_PI_2022-08-27-
FINAL.pdf&-ved=2ahUKEwjyhpHAo6KHAxUEMlkFHZmFCH4QFnoECBoQAQ&usg=AOv- 
Vaw0aA2xpXsxBBk1lssfAqPr.


   An explosive new report published 10 days ago finds that 
        Uyghurs are subjected to forced labor for ``processing much of 
        the seafood sent to America and Europe. The report finds that 
        ``at least 10 large seafood companies in China have used more 
        than a thousand Uyghur workers since 2018. During that time, 
        those companies shipped more than 47,000 tons of seafood--
        including cod, pollock, shrimp, salmon, and crab . . . '' 
        (October 9, 2023, Outlaw Ocean Project, The Uyghurs Forced to 
        Process the World's Fish. Media exclusive in The New Yorker.)
   Two days later, the C4ADS research institute published a 
        report on mining, including gold, mapping ``the relationships 
        between Xinjiang Uyghur Autonomous Region-based mines reliant 
        on forced labor and global networks of finance and trade--
        including hundreds of American companies and the index fund 
        portfolios of several major asset management firms.'' (October 
        11, 2023, Fractured Veins--C4ADS).
   For links to 27 NGO and U.S. Government reports to date, on 
        a variety of sectors from solar to automotive to luxury vinyl 
        flooring, see the ``reports'' page collated by the Coalition to 
        End Forced Labour in the Uyghur Region.
        
        
Transparency
    CPB's ``UFLPA data dashboard'' was launched 9 months after the law 
went into effect. This is a major step forward. Previously, information 
on UFLPA enforcement, and enforcement of forced-labor WROs and the 
Section 307 forced-labor import-ban generally, was provided in monthly 
enforcement updates published on the CBP website, which were irregular 
and sometimes appeared after long delays. In contrast, the Uyghur 
Forced Labor Prevention Act Statistics/U.S. Customs and Border 
Protection page is promptly updated each month, and contains far 
greater detail. It reveals, for example, that $1.8 billion in goods 
have been targeted for detention and examination since the law went 
into effect.
    It would be even more useful if all shipment-origin countries were 
to be included, rather than only the top 5. Currently, the top 5 
countries are Malaysia, Viet Nam, China, Thailand, and Mexico, with all 
other origin-countries grouped under ``Other.''
    In addition, it would be extremely useful if it provided a more 
detailed breakdown of goods, akin to the level of specificity in the 
June 21, 2022 table. For example, solar panels are included in the 
``Electronics'' category, making it impossible for importers, and for 
watchdog groups, to determine which sectors and products are indeed 
being stopped at the ports.
New tracing tools
    The private-sector commercial risk intelligence firm Sayari 
announced in November 2022 a $7.8 million CBP contract. According to 
the Sayari press release, the contract will support CBP ``mitigation of 
ongoing global supply chain risks and ensure major U.S. corporations 
comply with import regulations, including new directives like the 
Uyghur Forced Labor Prevention Act (UFLPA).''
    It could be useful for Congress to request an update from CBP on 
the usefulness of new tools such as the Sayari platform, and the impact 
of these tools on CBP's operations and effectiveness.
Tools for private-sector supply chain tracing and UFLPA compliance
    In March 2023, CBP organized the first-ever Forced Labor Technical 
Expo, a 2-day event in Washington. Nineteen for-profit firms gave 
presentations about their services related to importers' compliance 
with the U.S. import ban and UFLPA's rebuttable presumption. Such 
services range from supply chain tracking software to DNA testing of 
raw materials and use of AI to identify high-risk links in supply 
chains. DHS and CBP officials delivered remarks emphasizing the Federal 
Government's commitment to eradicate forced labor in U.S. markets, as 
part of a global need to stop forced labor anywhere in the world.
    Several of the firms have also proactively offered briefings to 
nonprofits campaigning for an end to Uyghur forced labor and an end to 
corporate complicity. It would be useful for Congress to commission 
research, perhaps from CRS, to understand the nature of these services 
and their impact on compliance.
Addressing the de minimis ``black box''
    As the UHFP Board Chair, Nury Turkel, testified in a Ways and Means 
Committee hearing in May, CBP officials' remarks at the CBP Trade 
Facilitation and Cargo Security Summit in April revealed a series of 
problems with CBP's capacity to police ``de minimis'' entries valued at 
$800 or less. CBP data show that in 2022, less than half of de minimis 
shipments included data either through ``Type 86 entry'' or the 
``Section 321 data pilot program.''
    Sal Ingrassia, former port director at the JFK Airport, which sees 
about one-third of the de minimis entries to the United States, said 
that while the agency is glad brokers are providing Harmonized Tariff 
Schedule codes in the Type 86 test, ``we still have a lot of 
concerns,'' because CBP is finding the data is often not correct. 
According to an article in International Trade Today, CBP found ``some 
type of violation'' in 25 percent of shipments examined:

``Ingrassia said ports identified de minimis shipments to examine and 
reported to the de minimis working group what they learned. `One-
quarter of what we looked at had some type of violation,' he said. `It 
was alarming to see we had so many violations.' He said a large number 
of the violations were either an HTS misclassification `or unmanifested 
merchandise in the shipment, meaning that we had an e-commerce package 
or shipment with three items in it. Only one item was declared. That's 
a real problem for us when we're talking about entry Type 86.' . . . 
Ingrassia asked rhetorically: `How can we run a system like entry Type 
86 without having correct information?' ''

    In addition, in 25 percent of cases, CBP was simply unable to 
locate packages identified for inspection. These are the cases where 
CBP had asked companies to hold packages for inspection and then 
discovered that packages had already been released before CBP could 
inspect them.
    A third issue was raised by Brandon Lord, executive director of 
CBP's Trade Policy and Programs Directorate, who seemed to imply that 
CBP will require fewer data in the future, not more, saying that CBP 
will ``mandate way less'' than the combined data elements used in the 
Type 86 test and the Section 321 data pilot, according to International 
Trade Today. In a later interview with International Trade Today, Mr. 
Lord said that ``de minimis'' is not a ``loophole''. CBP Trade Policy 
Director: de Minimis Is No Loophole (April 24, 2023)
    The fourth question that should be examined by Congress is how CBP 
handles transshipment coming from a third country and not the country 
of origin--such as Canadian warehouses. Some members of the importing 
business community apparently favor the creation of a new arrangement, 
such as ``Free Trade Zones'' in third countries, to warehouse goods 
that could later be sold to consumers under the de minimis threshold. 
It is important that any such new arrangements do not worsen gaps in 
enforcement of forced-labor and other trade laws in relation to de 
minimis shipments.
    The Los Angeles Field Office reportedly handles about a third of 
the national volume of de minimis packages. At the April Summit, the 
director of this office discussed a test operation that flagged ``quite 
a few shipments'' as non-compliant and pointed to the need for 
``advanced data'' to flag shipments for enforcement, including health 
and safety risks, infringements on intellectual property or are of 
interest to other Partner Government Agencies, including narcotics and 
other contraband, and of course forced-labor goodies.
    Finally, it is encouraging that Congressional statements and 
letters are beginning to grapple with the implications of breakneck 
market growth of direct-to-consumer shipping of cheap goods from China 
by Shein, Temu, and similar companies. According to the US-China 
Security and Economic Review Commission, Shein has a ``dominant'' place 
in the ``fast fashion sector, surging past Tiktok, Instagram, and 
Twitter to briefly become the most downloaded app in the United States 
in May 2022. The April 2023 US-China Security and Economic Review 
Commission report cites heightened risks of ``exploitation of trade 
loopholes; concerns about production processes, sourcing relationships, 
product safety, and use of forced labor; and violations of intellectual 
property rights.'' The brief raises the alarm about the race by other 
Chinese e-commerce platforms to copy this model, highlighting the 
``risks and challenges to U.S. regulations, laws, and principles of 
market access.''
    In sum, according to International Trade Today's reporting, CBP is 
facing capacity issues in enforcing U.S. trade laws for de minimis 
entries. In 2022:
   One-half were shipped with zero digital data provided to 
        U.S. customs authorities.
   One-quarter of those flagged for inspection were never 
        inspected because the importer failed to comply with the order 
        to hold the items for inspection, and
   one-quarter of those inspected at JFK airport had ``some 
        type of violation.''
    I associate myself with Nury Turkel's conclusion that it is hard to 
believe that Congress intended for the ``de minimis'' provision, which 
has the singular intent of waiving tariffs on small shipments, to 
result in spotty or non-existent policing of Congress's black-letter 
prohibitions on the importation of fake, dangerous, and forced-labor 
goods. It is past time for Congress to re-examine the assumption behind 
raising the threshold from $200 to $800 in the Trade Facilitation and 
Trade Enforcement Act of 2015.
Need for transparency on rail, road, and air imports
    UHRP joined 37 other watchdog and advocacy groups calling for 
greater transparency in import data. Our Open Letter to CBP on Trade 
Data Transparency, published in October 2022, urged CBP to institute 
disclosure of air, road, and rail manifests, in addition to maritime 
vessel manifests. CBP and FLETF have repeatedly stated and demonstrated 
their appreciation of independent reports on supply chain risks on 
forced labor.
    For this partnership to be effective, and to ensure that actionable 
data can be provided by U.S. private-sector firms affected by unfair 
competition as well as by research NGO's, public disclosure by CBP of 
import data other than ocean shipping is vital.
Slow pace of additions to the UFLPA Entity List
    Following the 20 original entities named in the Enforcement 
Strategy on June 21, 2022, it was not until June 2023 that FLETF 
announced the first additions. UHRP said in a public statement that we 
were disappointed by this small number, more than a year after the law 
went into effect. As UHRP said at the time, ``The entity list is key to 
public messaging: perpetrators of Uyghur forced labor do not have 
access to U.S. consumers. Strong language on enforcement isn't enough--
naming the companies is essential.'' As of today 8 entities have been 
added, for a total of 28.
    UHRP, along with many other research organizations, have submitted 
substantial data which government agencies have not yet acted on. UHRP 
has utilized the channels for public input created by FLETF, including 
a dedicated email address ([email protected]) as well 
as the e-allegations portal. We have urged FLETF to make use of this 
intensive research by substantially expanding the entity list.
    The Entity List faces particular challenges in adding entities due 
to the multi-agency structure of FLETF. Lawyers in all seven agencies 
are part of the review, and if a vote must be taken, a majority must 
sign off before an entity is added. The bureaucratic nature of this 
process appears to be an obstacle to decisive action. I am aware of 
progress in designating many months after publication of the Strategy, 
designated staff in the agencies focused on Entity List decisions, and 
sincerely hope that the pace will continue to pick up.
Penalties for ``knowingly benefiting'' from the importation of goods 
        produced with forced labor
    Vigorous implementation of any law requires agencies administering 
that law to not only provide clear guidance on compliance, but also to 
impose penalties in any cases of willful violations or knowing 
provision of inaccurate or false information. It would be useful for 
Congress to seek further information from DHS and CBP about their 
strategy for deterring willful or knowing evasion.
    For example, UHRP urges the imposition of penalties on the 
importers of Xinjiang Production and Construction Corps (XPCC). The 
XPCC was placed under Global Magnitsky sanctions on July 31, 2020, and 
UHRP published a report on XPCC imports in August 2022 (Fruits of 
Uyghur Forced Labor: Sanctioned Products on American Grocery Store 
Shelves). Therefore, there is no room for doubt that importers should 
have been on notice that goods from the XPCC are illegal to import 
(since all financial dealings with the XPCC are prohibited). Yet it 
would appear that importers continued to bring in XPCC goods at least 
until the CBP detentions of multiple shipments at the ports of Newark, 
Oakland, and Los Angeles at some point between August 2022 and 
publication of the CBP magazine article on the detentions, in January 
2023.
    The 2023 UFLPA Implementation Strategy Update (Updates to the 
Strategy to Prevent the Importation of Goods Mined, Produced, or 
Manufactured with Forced Labor in the People's Republic of China Report 
to Congress, July 26, 2023, Department of Homeland Security, Office of 
Strategy, Policy, and Plan) mentions the question of prosecution in two 
places:
Fruits of Uyghur Forced Labor: Sanctioned Products on American Grocery 
                             Store Shelves

    (1) ``CCHT will send viable referrals of allegations against those 
        identified as high-priority sectors pursuant the UFLPA to HSI 
        field offices to pursue criminal investigation and Federal 
        prosecution, as appropriate.'' (p. 10)
    (2) ``to identify and investigate individuals and entities who are 
        knowingly importing or benefiting from the importation of goods 
        produced with forced labor.'' (p. 13)

    To date, DHS has not provided any updates about whether such 
investigations have been pursued. Nor has CBP announced any civil 
penalties regarding importers.
Ensuring our trading partners do not become ``dumping grounds'' for 
        Uyghur forced-labor goods--urgency of progress in Europe, 
        Canada & Mexico, Japan and others
    UHRP has a number of questions about how CBP, DHS, the State 
Department, USTR, and other agencies are coordinating in their efforts 
with other countries, a mandate contained in Section 4 of the UFLPA. We 
are looking for answers to questions such as the following: How best 
for civil society to feed in and/or amplify the U.S. agenda with policy 
makers in other countries, where NGO's and trade unions have partners 
with capacity to mobilize awareness & sense of urgency. All our efforts 
to point to forced labor as an actionable arena in Southeast Asia, 
Japan, etc, run into the response: ``we can't risk trade retaliation.'' 
Is there a plan to help govts act jointly, to overcome their fear of 
China's retaliation? What is the progress under the the U.S.-Japan Task 
Force on forced labor (under USTR) going to do anything? What are the 
outcomes and plan for operationalizing the repeated G7 commitments on 
this issue? What is the U.S. (and allies') agenda to fix the ILO's and 
UNGP's blind spots on how state-imposed forced labor requires a wholly 
different approach than nonpolitical, corrupt/illegal forms of forced 
labor, especially in the context of China's constellations of 
interlocking atrocity crimes?

    Mr. Bishop. Thank you, Ms. Greve.
    I now recognize Mr. Michael Stumo. Is that how you 
pronounce your name, sir?
    Mr. Stumo. Yes, sir.
    Mr. Bishop. Mr. Stumo for 5 minutes for his opening 
statement.

  STATEMENT OF MICHAEL STUMO, CEO, COALITION FOR A PROSPEROUS 
                            AMERICA

    Mr. Stumo. Chairman Green, Ranking Member Ivey, and 
honorable Members, my name is Michael Stumo. I'm the CEO of the 
Coalition for a Prosperous America. CPA is proud to be the 
Nation's leading bipartisan organization representing 
exclusively domestic producers and workers across many 
industries. I appreciate the testimony of my fellow panelists. 
I largely agree. I'm going to supplement in a little different 
way.
    You--this committee's been rightly worried about narcotics 
coming through the Southern Border, but I will focus on the 
forced labor goods, the narcotics, and the contraband that 
comes into our mailboxes through the de minimis loophole. CBP 
said this regarding de minimis: ``Illicit opioids can now be 
purchased on-line from the comfort of one's home. Opioids 
entering the country through express consignment or 
international mail have a substantial higher purity level than 
the opioids entering the Southwest Border''.
    On a typical day, 26,000 customs officers admit 107,000 
goods shipments through normal entry. These entries have 
paperwork prepared by licensed Customs brokers who are 
responsible for maintaining the integrity of our ports and 
complying with over 500 laws governing merchandise entry. But 
thanks to the de minimis loophole, an additional 2 to 3 million 
shipments per day enter our ports. These shipments arrive by 
mail and express shipper without sufficient data, without 
inspection, or a broker's involvement. They are overwhelming 
our Customs officers.
    De minimis has been weaponized by our adversaries abroad, 
including China, and exploited by transnational criminal 
organizations. Express shippers and a handful of e-commerce 
platforms that profit from it are the primary defenders. 
Whether an express shipper or a Customs broker has the right to 
import is crucial. Customs brokers are as, CBP says, trained 
and licensed, ``to act as forced multipliers in combating fraud 
and other schemes against the government''.
    Customs brokers have a duty to know their customer and to 
know what is the imported package on ships, trucks, and 
airplanes. If they facilitate imports that contain fentanyl or 
other unlawful goods, they can lose their license and their 
livelihood. Express shippers and postal services, on the other 
hand, just pick up sealed packages with addresses and 
information filled out by China post, regular citizens, or 
criminal organizations.
    De minimis was originally a rational administrative 
exception. It allowed Customs officers to waive low-valued 
mailed gifts or knickknacks purchased by travelers. But in 
1994, Customs changed its de minimis rules to eliminate the 
need for a broker for the commercial shipments. Now, if China 
post, for example, merely declares the value is less than 800 
in China, not here, it is de minimis eligible. This allows 
consignees like FedEx, DHL, U.S. Postal Service, and express 
shippers to import merchandise without inspection or a trained 
broker.
    Thirty years later, the result has been a massive lawless 
disaster that destroys U.S. businesses, enriches forced labor 
purveyors, and enables undetected delivery of the most potent 
fentanyl shipments. Criminal organizations and citizens can and 
do order contraband, including fentanyl, on-line then sit back 
and wait for the postman or the UPS delivery women to deliver 
the package to their door from Mexico or China.
    According to the State Department, most shipments originate 
in China with suppliers who use international mail 
consolidators to mask the origin of the shipments. Most U.S.-
based traffickers utilize invalid addresses, relying on the 
large volume of e-commerce parcels from China and meetings of 
concealment.
    Congress rightly passed the UFLPA to address forced labor 
of Chinese goods. There are improvements that Congress should 
make to the Act, which I cover in detail in my written 
testimony. But the de minimis loophole makes a mockery of the 
Act. China's Shein and Temu have built enormous businesses 
around de minimis. Their fast-fashioned goods are rife with 
forced labor cotton and other materials, but not inspected. The 
sheer volume of Shein and Temu goods are forcing U.S. stores 
and textile companies to close, or lay off employees right now. 
Tellingly, Shein and Temu do not sell any goods in China.
    The problem will get worse. TikTok is now launching its own 
e-commerce platform. The de minimus loophole is ungovernable 
lawlessness. My organization estimates 188 billion de minimis 
goods came in last year. Some say we just need a bit more 
shipment data. That has been tried and failed. It will always 
fail. No country uses de minimis like we do, and many 
effectively ban it. De minimis should be ended or dramatically 
restricted. China should be barred. The Biden administration 
can fix this with Executive action, and Congress can do so with 
legislation.
    Thank you.
    [The prepared statement of Mr. Stumo follows:]
                  Prepared Statement of Michael Stumo
                            October 19, 2023
                              introduction
    The rise of Shein and Temu have laid bare the limitations of U.S. 
Department of Homeland Security (``DHS'') forced labor enforcement 
actions to date.
    On January 13, 2021, U.S. Customs and Border Protection (``CBP'') 
issued a Withhold Release Order (``WRO'')\1\ against all cotton 
products produced in China's Xinjiang Uyghur Autonomous Region.\2\ This 
WRO included apparel and all other cotton-downstream products 
``produced outside the Xinjiang region that incorporate these 
inputs.''\3\ Acting DHS Secretary Ken Cuccinelli said ``DHS will not 
tolerate forced labor of any kind in U.S. supply chains.'' And on 
December 8, 2021, 427 Members of the U.S. House of Representatives 
passed a resolution condemning the on-going genocide and crimes against 
humanity being committed against Uyghurs and members of other religious 
and ethnic minority groups by the People's Republic of China.\4\ 
Finally, on June 21, 2022, the Uyghur Forced Labor Prevention Act 
(UFLPA) went into effect.
---------------------------------------------------------------------------
    \1\ WROs are the legal instrument CBP uses to stop the importation 
of goods made in-whole or in-part with forced labor, which were 
prohibited by Section 307 of the Smoot Hawley Tariff Act of 1930 (19 
U.S.C.  1307).
    \2\ CBP Issues Region-Wide Withhold Release Order on Products Made 
by Slave Labor in Xinjiang (Jan. 13, 2021), available at https://
www.cbp.gov/newsroom/national-media-release/cbp-issues-region-wide-
withhold-release-order-products-made-slave.
    \3\ Id.
    \4\ H. Res. 317--Condemning the on-going genocide and crimes 
against humanity being committed against Uyghurs and members of other 
religious and ethnic minority groups by the People's Republic of China. 
117th Congress (2021-2022)
---------------------------------------------------------------------------
    Nonetheless, during this same time period, fast-fashion giant 
Shein's market valuation rose over tenfold to $66 billion as of May 
2023.\5\ In the first half of 2022, Shein ``eclipsed Amazon in the 
U.S.--with 22.4 million Shein downloads versus 22 million for 
Amazon''.\6\ Earlier this year, Temu, a new ecommerce platform linked 
to one of China's top retailers, aired repeat ads during the Super Bowl 
and became ``the most downloaded app in the United States, surpassing 
Amazon and Walmart.''\7\ Temu's valuation is now estimated at $100 
billion.\8\
---------------------------------------------------------------------------
    \5\ Vanessa Romo, ``Shein invited influencers on an all-expenses-
paid trip'', NPR, June 30, 2023, available at https://www.npr.org/2023/
06/30/1184974003/shein-influencers-china-factory-trip-backlash.
    \6\ Emily Dreibelbis, ``Shein Unseats Amazon as Most Downloaded US 
Shopping App'', PC Mag, July 19, 2022, available at https://
www.pcmag.com/news/shein-unseats-amazon-as-most-downloaded-us-shopping-
app.
    \7\ Michelle Toh, ``New online superstore surpasses Amazon and 
Walmart to become most downloaded app in US'', CNN, February 19, 2023, 
available at https://www.cnn.com/2023/02/16/tech/temu-shopping-app-us-
popularity-intl-hnk/index.html.
    \8\ Chelsey Cox, ``Retailers Shein and Temu violate U.S. tariff law 
and evade human rights reviews on imports, House report says'', CNBC, 
June 22, 2023, available at https://www.cnbc.com/2023/06/22/shein-temu-
evade-us-tariff-and-human-rights-law-on-imports-house-report.html.
---------------------------------------------------------------------------
    Shein and Temu's tremendous success comes in spite of wide-spread 
acknowledgement of their flouting of CBP's WRO and the UFLPA.\9\
---------------------------------------------------------------------------
    \9\ See, e.g., U.S.-China Economic and Security Review Commission, 
Issue Brief: Shein, Temu, and Chinese e-Commerce: Data Risks, Sourcing 
Violations, and Trade Loopholes. April 14, 2023 (``Shein cotton apparel 
sourcing practices appear to be in direct violation of the Uyghur 
Forced Labor Prevention Act.''), available at https://www.uscc.gov/
sites/default/files/2023-04/Issue_Brief-Shein_Temu_and_Chinese_E-
Commerce.pdf. See also U.S. House Select Committee on the Chinese 
Communist Party, Fast Fashion and the Uyghur Genocide: Interim 
Findings. June 22, 2023, available at https://
selectcommitteeontheccp.house.gov/media/reports/fast-fashion-and-
uyghur-genocide-interim-findings (``Key Finding 2: Temu's business 
model, which relies on the de minimis provision, is to avoid bearing 
responsibility for compliance with the UFLPA and other prohibitions on 
forced labor while relying on tens of thousands of Chinese suppliers to 
ship goods direct to U.S. consumers.'')
---------------------------------------------------------------------------
    Simply put, the credibility of the United States is on the line.
forced labor enforcement actions against merchandise from china need to 
                 be country-wide, not entity specific.
    In 2015, Congress repealed the ``consumptive demand'' clause of the 
long-standing ban on forced labor imports. This clause provided an 
exception to the ban if comparable U.S. products were unavailable or 
domestic production failed to meet demand.\10\ Repealing this clause 
was good, as it removed the only material statutory barrier to 
enforcing the prohibition of forced labor imports.
---------------------------------------------------------------------------
    \10\ See CBP, ``Repeal of the Consumptive Demand Clause'', CBP 
Publication 2130-0316, available at https://www.cbp.gov/sites/default/
files/assets/documents/2016-Oct/Fact%20Sheet%20-
%20Repeal%20of%20the%20Consumptive%20Demand%20Clause.pdf.
---------------------------------------------------------------------------
    In 2018, CBP issued two WROs. The first, on March 5, 2018, was 
against products from a specific Chinese corporate entity: Huizhou Mink 
Industrial Co. Ltd.\11\ However CBP's second WRO, issued on May 5, 
2018, applied to ``All Turkmenistan Cotton or products produced in 
whole or in part with Turkmenistan cotton.''\12\ As Shawn MacDonald, 
head of Verite, a non-profit focused on labor and human rights abuses, 
told Reuters at the time, ``This signals an important change in how CBP 
is approaching their authority.''\13\
---------------------------------------------------------------------------
    \11\ CBP Withhold Release Orders and Findings, available at https:/
/www.cbp.gov/trade/forced-labor/withhold-release-orders-and-findings.
    \12\ Id.
    \13\ Sebastian Malo, ``U.S. bans imports of slave-picked cotton 
from Turkmenistan'', Reuters, May 24, 2018, available at https://
www.reuters.com/article/us-usa-trafficking-turkmenistan-idUSKCN1IP3UB.
---------------------------------------------------------------------------
    The difference between these two WROs is night and day. The first 
WRO merely punishes a specific corporate entity, while the second WRO 
properly holds the sovereign--in this case, Turkmenistan--accountable 
for forced labor operations within its territory.
    And from an execution perspective for CBP, the two WROs are also 
worlds apart. Concealing the involvement of a specific corporate actor 
early in the supply chain is trivial, but concealing the entire country 
of origin of a product or input is an order of magnitude more 
difficult.
    In DHS's lead-up to the implementation of the UFLPA, the Coalition 
for a Prosperous America (CPA) stressed these points. In our March 10, 
2022 comment to DHS's Forced Labor Enforcement Task Force (FLETF),\14\ 
CPA pointed to statements from Chinese authorities that China would not 
allow the policing of its supply chains, rendering entity-specific 
investigations futile. When a foreign government actively obstructs 
forced labor investigations, CPA believes that at a minimum, WROs 
should apply against the entire relevant product class from that 
country, not just specific corporate entities. CPA pointed to the 
Turkmenistan WRO as the appropriate model.
---------------------------------------------------------------------------
    \14\ CPA Public Comment Letter Regarding Implementation of The 
Uyghur Forced Labor Prevention Act, March 14, 2022, available at 
https://prosperousamerica.org/cpa-public-comment-letter-regarding-
implementation-of-the-uyghur-forced-labor-prevention-act/.
---------------------------------------------------------------------------
    Unfortunately, CPA's recommendations were rejected by DHS when they 
released their Report to Congress, ``Strategy for the Uyghur Forced 
Labor Prevention Act.'' Upon publication of the FLETF Report, CPA 
issued a press release stating:

``The Report acknowledges that the `PRC government engages in genocide 
and crimes against humanity' more than once, but everything that 
follows in the strategy report ensures that the PRC government is 
undisturbed and that importers can continue to source from China with 
confidence, regardless of actions by the regime there.''\15\
---------------------------------------------------------------------------
    \15\ CPA Statement on Implementation of Uyghur Forced Labor 
Prevention Act, June 24, 2022, available at https://
prosperousamerica.org/cpa-statement-on-implementation-of-uyghur-forced-
labor-prevention-act/.
---------------------------------------------------------------------------
    CPA was right. DHS's forced labor approach was guaranteed to fail, 
and it has.
    If CBP had issued the same WRO for Chinese forced-labor cotton that 
it had for Turkmenistan--i.e., country-wide instead of confined to a 
specific region or set of corporate entities--then Shein and likely 
Temu would not exist in the United States today, or at best would be 
trivial actors. For CBP, denying entry of cotton apparel products 
shipped from China can be nearly automatic. But forcing CBP to link the 
shipment's merchandise to a specific corporate entity or direct 
shipment from a specific region within China doomed enforcement from 
the start. This point will be expanded upon below.
    Finally, it should be noted that the UFLPA's rebuttable presumption 
is entirely consistent with country-wide WROs. Indeed, CBP has already 
done so using the underlying forced labor authority in Section 307 of 
the Tariff Act of 1930. On November 1, 2019, CBP issued a WRO for 
``Tobacco produced in Malawi and products containing tobacco produced 
in Malawi'', but subsequently excluded three corporate entities who 
demonstrated that their Malawi tobacco products were not made in part 
with forced labor.
    There is nothing stopping DHS from taking the same approach for 
China as it has for Turkmenistan and Malawi. DHS should do so, issuing 
country-wide WROs for the relevant product class where there is a 
forced labor finding.
    dhs enforcement strategies are meaningless thanks to de minimis
    Regular Imports versus De Minimis: It is imperative to understand 
the distinction in customs law between formal and informal entry on the 
one hand (aka, ``normal imports''--anything import not arriving with de 
minimis treatment), and de minimis entry on the other (aka, lawless 
imports). De minimis imports are lawless because they allow vendors 
completely beyond our jurisdiction to ship directly to American 
households.
    Strategies that have merit for formal and informal entry are 
inevitably completely undermined by de minimis. Country-wide WROs will 
be extremely effective for regular imports, but more easily avoided if 
entered via de minimis.
              background: where did de minimis come from?
    In fiscal year 2022, U.S. Customs and Border Protection (CBP) 
processed more than $3.35 trillion worth of imported goods, an 
astonishing increase of 19.5 percent over the prior year. However, 
$3.35 trillion is an undercounting of imports. Unfortunately, not even 
CBP knows the total value. That's due entirely to de minimis. De 
minimis is one of the three types of ``consumption entry'', a term CBP 
uses for imported merchandise for use in United States commerce. The 
other two types of consumption entry are ``formal entry'' (required for 
merchandise $2,500 and over) and ``informal entry'' (available for most 
merchandise valued at less than $2,500). Our $3.35 trillion tally 
includes formal and informal entry, but not merchandise imported via de 
minimis.\16\
---------------------------------------------------------------------------
    \16\ Josh Zumbrun, ``The Tiny Loophole That Understates the Trade 
Deficit With China'', WSJ, June 17, 2022, available at https://
www.wsj.com/articles/the-tiny-loophole-that-understates-the-trade-
deficit-with-china-11655458201.
---------------------------------------------------------------------------
    This is because de minimis is an ungovernable break in our customs 
controls, where over 2 million shipments per day enter the United 
States with little to no scrutiny. Most arrive without digital data, 
offering only a word or two written on the package to give a hint as to 
what's inside. It would take an army of investigators to even attempt 
to inspect these shipments.
    CBP is flagging the problem in their own muted manner, warning in 
March 2023: ``The overwhelming volume of small packages and lack of 
actionable data impacts CBP's ability to identify and interdict high-
risk shipments that may contain narcotics, merchandise that poses a 
risk to public safety, counterfeits, or other contraband.''\17\
---------------------------------------------------------------------------
    \17\ https://www.cbp.gov/sites/default/files/assets/documents/2023-
Mar/NGF%20E-Com- merce%20Task%20Issue%20Paper%20March%202023.pdf.
---------------------------------------------------------------------------
    We know that the majority of de minimis shipments are shipped 
directly from China and Hong Kong, but after that, it gets murky. The 
next largest origin country is Canada, but due to the lack of data on 
de minimis shipments, we do not know the merchandise country of origin 
for most of those shipments from Canada.
    Examining the development of the de minimis fiasco offers a 
foundation for understanding other negative customs policies that 
frustrate Congressional expectations in issues such as product safety, 
narcotics laws, and forced labor laws.
                  why congress created ``de minimis''
    When goods are brought into the country, the law says the customs 
officers must record merchandise's value, catalog its importation by 
way of an ``Entry'' form and ``Entry Summary'', and collect any 
applicable tariffs and taxes. If Customs law did not make an exception 
to this requirement for trivial items, however, Customs officers would 
be forced to do the assessment for every little souvenir or knick-knack 
brought in from abroad. Imagine being asked for copies of receipts for 
the snow-globe and t-shirt you brought back from Paris while standing 
in the customs line at the airport. Nobody wants that.
    This is why, in 1938, Congress created the ``De Minimis'' rule. 
``De Minimis'' is Latin for ``too trivial or minor to merit 
consideration''. It was added as Section 321 to the Tariff Act of 1930, 
codified in the U.S. Code at 19 U.S.C. Sec. 1321. The law's opening 
line states its purpose: ``to avoid expense and inconvenience to the 
Government disproportionate to the amount of revenue that would 
otherwise be collected.''
    Crucially, this is the reason merchandise imported via de minimis 
is admitted ``free of duty and of any tax''--because no entry was 
assessed to begin with. The assumption was that any revenue gained 
would not be worth the officer's time at performing the assessment. 
This clearly no longer holds true.
    To this day, 19 U.S.C. Sec. 1321 is titled ``Administrative 
exemptions''. This is yet another clear indicator that Congress never 
intended de minimis to be a channel for import commerce consisting of 
millions of packages per day. And it is why it is appropriately called 
a ``loophole'', one that was enabled not by Congress but by regulatory 
rulemaking, as will be discussed below.
             the three different types of de minimis entry
    Congress created three separate types of de minimis entry covering 
two different scenarios, and a catch-all. They are still enumerated in 
the law today:
    1. 19 U.S.C.  1321(a)(2)(A): ``Bona fide gifts'' shipped from 
        abroad;
    2. 19 U.S.C.  1321(a)(2)(B): ``articles accompanying'' travelers 
        for ``household use''; and
    3. 19 U.S.C.  1321(a)(2)(C): ``any other case''.
    Originally, in 1938, Congress assigned a $5 threshold for bona fide 
gifts and personal effects travelers brought with them, and a $1 de 
minimis for ``any other case''. ``Any other case'', (a)(2)(C), was 
never meant to be a channel of any meaningful volume of goods. Yet 
today, the ``anything else'' category is what is being used to waive 
through millions of shipments per day! Having been lightly touched 
since its 1938 inception, as of 1994, the de minimis thresholds stood 
at $50 for bona fide gifts from abroad, $25 for souvenirs brought back, 
and just $5 for anything else.
     1994: birth of the de minimis loophole via customs rule-making
    NAFTA went into effect on January 1, 1994, and was a high-profile 
legislative event. It thus largely overshadowed another monumental 
piece of legislation that was passed alongside NAFTA: the Customs 
Modernization Act, or ``Mod Act.'' The Mod Act increased the bona fide 
gift threshold from $50 to $100; ``accompanying articles'' from $25 to 
$200 for; and a tremendous increase from $5 to $200 for de minimis. In 
the legislative record, however, Congress focused on the first two 
categories, but not the ``in any other case'' increase to $200 
alongside the ``accompanying articles'' increase.
    Besides the raise from $5 to $200, the other transformative change 
happened not from the 1994 Mod Act, but when U.S. Customs service 
drafted their subsequent implementing regulations that allowed any 
``consignee'' to import merchandise, without even the use of a Customs 
broker. The National Customs Brokers and Forwarders Association of 
America (``NCBFAA''), founded in 1897, is the trade association 
representing the Customs brokers' profession and was very involved in 
the development of the Mod Act. It is telling that an organization so 
involved in the legislative process was stunned by the subsequent 
interim regulations.\18\
---------------------------------------------------------------------------
    \18\ National Customs Brokers & Forwarders Ass'n of America, Inc. 
v. United States, 861 F.Supp. 121, 125 (1994).
---------------------------------------------------------------------------
    Customs brokers were alarmed because the norm around the world was 
that only owners, purchasers, or a Customs broker hired by the owner or 
purchaser could do an importation. This is the norm because importers 
are expected to be knowledgeable about the merchandise they are 
importing. They are expected to be able to answer Customs officers' 
questions. This norm is U.S. law, 19 U.S.C.  1484, except for de 
minimis. Allowing ``consignees'' to perform import entries meant that 
parcel carriers (e.g. mail carriers and express couriers) could perform 
imports despite having no knowledge of the merchandise beyond what is 
written on the declaration.
    The NCBFAA filed an emergency lawsuit, claiming that the U.S. 
Customs Service was violating statute with these regulations. Multiple 
reasons were cited, but importantly from a policy perspective was the 
fact that the law (19 U.S.C.  1484) mandated that ``only an owner, 
purchase, or licensed broker may make entry of merchandise.''\19\ Doing 
away with this requirement for de minimis shipments would lead to a 
host of grave issues.
---------------------------------------------------------------------------
    \19\ Id., 128.
---------------------------------------------------------------------------
    NCBFAA cautioned that ``Customs is abrogating its responsibility to 
enforce certain laws and is providing opportunities for their 
violation.''\20\ While NCBFAA's lawsuit was against the U.S. Customs 
Service, the express shippers joined as defendant-intervenors. The 
Federal court that heard the challenge understood the consequential 
nature of the case, writing ``With regard to [the express shippers], 
resolution of this matter will define their frontier in this 
industry.''\21\
---------------------------------------------------------------------------
    \20\ Id.
    \21\ Id., 126.
---------------------------------------------------------------------------
    NCBFAA warned the court and the country as follows: ``Specifically, 
plaintiff points out . . . the proposed regulations allow entry of 
shipments valued at amounts up to $200 through summary manifest 
information, that is, without any requirement of a Harmonized Tariff 
Schedule of the United States (HTSUS) subheading number, and exempt 
these shipments from the requirement of filing an entry summary. 
Plaintiff contends that this lax entry procedure will create 
difficulties for Customs relative to the enforcement of visa 
requirements for apparel, intellectual property rights for patents and 
copyrights, and antidumping and counter-vailing duty orders. Plaintiff 
contends that the proposed changes will hinder the Food and Drug 
Administration's enforcement capabilities as well.''\22\
---------------------------------------------------------------------------
    \22\ Id., 129.
---------------------------------------------------------------------------
    Unfortunately, the court found that the Secretary of the Treasury 
had broad rulemaking authority governing de minimis shipments, and thus 
ruled against the NCBFAA. The above prediction is precisely what has 
transpired.
the final rule docket also accurately predicted the many calamities of 
                               de minimis
    Following the lawsuit, on April 14, 1995, the Customs Service 
published its Final Rule (60 FR 18983) in the Federal Register, and 
here too, the docket was filled with commentators who accurately 
predicted the myriad of problems.\23\
---------------------------------------------------------------------------
    \23\ 60 FR 18983, https://www.federalregister.gov/documents/1994/
06/13/94-14255/express-consignments-formal-and-informal-entries-of-
merchandise-administrative-exemptions.
---------------------------------------------------------------------------
       fda abandons oversight role for food, cosmetics, and more
    Just as the NCBFAA predicted, FDA concluded that it should simply 
abandon oversight for various imports it is supposed to monitor, 
including room-temperature food stored in air-tight containers and 
cosmetics.\24\ The FDA's dereliction of duty continues to this day for 
millions of shipments from around the world, most of which originate 
from China.
---------------------------------------------------------------------------
    \24\ FDA CSMS No. 94-001260, ``FDA Low Value Shipments''.
---------------------------------------------------------------------------
        2015: de minimis rises from $200 to $800 without debate
    Express shippers and e-commerce platforms were able to accomplish a 
legislative coup in 2015, when they successfully raised the de minimis 
threshold from $200 to $800. This was a provision tucked into the Trade 
Facilitation and Trade Enforcement Act of 2015 (``TFTEA''). TFTEA did 
include a number of improvements to our anti-dumping and countervailing 
duty laws, and thus earned support from businesses and groups who 
typically favor strong trade enforcement. Unfortunately, as in 1994, 
this change from $200 to $800 did not face Congressional scrutiny, and 
was obscured by other customs issues. Congress cannot let this happen 
again as it takes up customs policy.
              a note about de minimis monetary thresholds
    Because de minimis is now associated with e-commerce, it is often 
erroneously assumed that the $800 limit refers to a U.S. retail price. 
But because de minimis was never meant to be an avenue of commerce, the 
U.S. retail price is actually irrelevant in determining whether the 
$800 threshold has been met. Instead, per 19 U.S.C. Sec. 1321(a)(2), 
the $800 is the ``fair retail value in the country of shipment''--not 
of America.
    ``consignee entry'' combined with an $800 de minimis threshold 
transformed the nature of international trade and e-commerce in america
    Under the traditional trade paradigm, importers were typically 
wholesalers or large retailers, importing particular products by the 
container-load and then distributing those products domestically. 
Essentially, merchandise was almost always shipped in bulk. This made 
regulating and policing import commerce fairly straightforward. 
Conversely, with de minimis' consignee entry, that same shipping 
container may now have as many as 5,000 individual shipments, all small 
packages going to individual Americans.
    China's SHEIN and Temu are now the most downloaded e-commerce apps 
in the United States, and their operations are almost entirely outside 
the country. Mailbox-sized shipments are sent directly from abroad, and 
imported via de minimis entry with little documentation. SHEIN is now 
larger than The Gap, and the United States misses out not only on 
revenue from duties, but also the over 20% corporate income tax rate 
The Gap is subject to as they are displaced by SHEIN. This is extremely 
problematic for CBP, because they face a comparable work load whether a 
bill of lading represents an entire shipping container or one 
individual package.
    This is how Laurie Dempsey, CBP's Director of Intellectual Property 
Rights, described the situation in 2019:

``TFTEA's change to the de minimis value, however, caused a dramatic 
increase in the volume of shipments making use of de minimis entry 
procedures. These procedures provide fewer data elements for CBP to use 
to effectively identify and target high-risk shipments, including for 
narcotics, counter-proliferation, and health and safety risks. The 
dramatic increase in shipments has left CBP with less information about 
a greater number of shipments.
``The increasing use of new and changing industry business models, 
particularly in the e-commerce environment, further exacerbates this 
information gap. Entities receiving goods in the United States, which 
CBP previously believed to have limited financial interest in a 
shipment, are now critical players with increasing influence in how 
low-value goods move around the world.
``This shift in the roles of parties to the transaction has not been 
accompanied by a change in responsibilities from a regulatory or policy 
perspective. Moreover, the advent of just-in-time delivery, along with 
contract manufacturing and on-line payment processing, has given 
merchants more flexibility and greater access to markets once limited 
by location. Free trade agreements have also allowed new routes for 
goods from all over the world to cross borders more easily.
``CBP is concerned that the proliferation of new and changing business 
models, particularly in the e-commerce environment, and the increase in 
small packages, is permitting bad actors to operate with relative 
impunity.''\25\
---------------------------------------------------------------------------
    \25\ U.S. Department of Homeland Security, ``Privacy Impact 
Assessment for the E-Commerce ``Section 321'' Data Pilot'', DHS/CBP/
PIA-059 (September 26, 2019), page 2, available at https://www.dhs.gov/
sites/default/files/publications/privacy-pia-cbp-section321-059-
september2019.pdf.

    CBP's Trade Director on de minimis: ``Zero incentive . . . to learn 
the requirements'': In April 2023, at CBP's Trade Facilitation and 
Cargo Security Summit, CBP's executive director of the trade policy and 
programs directorate, Brandon Lord, stated this truth about de minimis 
plainly: ``it's so easy to sell directly to U.S. consumers from 
overseas and mail the merchandise to them. And there's zero incentive 
as that foreign shipper, or foreign seller, to learn the requirements 
to enter the United States.''\26\
---------------------------------------------------------------------------
    \26\ Mara Lee, ``Type 86 Test Revealing Compliance Weaknesses in 
Small Packages'', International Trade Today, April 17, 2023, available 
at https://internationaltradetoday.com/article/2023/04/17/type-86-test-
revealing-compliance-weaknesses-in-small-packages-2304170052.
---------------------------------------------------------------------------
De Minimis is destroying lawful retailers and gutting U.S. communities
    Zero incentive flows from zero liability due to zero U.S. 
presence.\27\ Zero U.S. presence means zero U.S. income tax. Why should 
any retailer have a presence in the United States? Thanks to de 
minimis, all brands are incentivized to move off-shore to a tax haven, 
face zero liability for what they sell, and pay zero duties or income 
taxes. De minimis is authorized anarchy destroying our society. It 
harms every part of American society: producers, distributors, 
retailers.
---------------------------------------------------------------------------
    \27\ De minimis supporters will protest the assertion of zero 
liability, and it is correct that for countries with U.S. extradition 
agreements, there is technically a legal path to liability. To 
understand what that looks like, and why it should be dismissed as an 
assurance, consider how it took over 5 years for the United States to 
arrange extradition of a single, notorious high-profile e-commerce 
marijuana seed dealer selling into the United States from Canada. See 
Jeremy Hainsworth, ``Canada's `Prince of Pot' ordered extradited to 
US'', NBC NEWS (May 10, 2010), available at https://www.nbcnews.com/id/
wbna37067430.
---------------------------------------------------------------------------
    De minimis guts municipal and county governments of jobs and income 
as their retailers, big and small, close. So far in 2023, ``[a]t least 
20 major retailers have said they will close U.S. stores in 2023, a 
combined total of 3,193 locations.''\28\ Even the National Retail 
Federation, which has a severe bias against any friction at the border 
for imported merchandise, agrees there's a problem. In July, NRF Vice 
President & Deputy General Counsel Ceara Flake wrote:
---------------------------------------------------------------------------
    \28\ Dominick Reuter, ``Nearly 3,200 stores are closing across the 
US in 2023. Here's the full list.'' INSIDER. (Sept. 26, 2023), 
available at https://www.businessinsider.com/stores-closing-in-2023-
list.

``Criticism of the UFLPA frequently arises from the fact that de 
minimis shipments, which are often smaller scale direct-to-consumer 
shipments of goods purchased on-line, are not subject to import duty 
and may enter without the filing of a formal entry. This trade rule 
gives an unfair advantage to foreign ecommerce companies, including 
those that might employ forced labor.''\29\
---------------------------------------------------------------------------
    \29\ Ceara Flake, ``NRF General Counsels Forum enabled peer-to-peer 
discussions on pressing retail topics'', NRF.com, July 13, 2023, 
archived at https://web.archive.org/web/20230000000000*/https://
nrf.com/blog/nrf-general-counsels-forum-enabled-peer-peer-discussions-
pressing-retail-topics.

    The U.S. House Select Committee on the CCP found that ``Temu and 
Shein alone are likely responsible for more than 30 percent of all 
packages shipped to the United States daily under the de minimis 
provision, and likely nearly half of all de minimis shipments to the 
U.S. from China.''\30\ Sometimes, Temu and Shein are spoken of as 
``exploiting'' de minimis. But the fact is, the platforms are using de 
minimis entirely in the manner conceived of by its supporters.
---------------------------------------------------------------------------
    \30\ U.S. House Select Committee on the Chinese Communist Party, 
Fast Fashion and the Uyghur Genocide: Interim Findings. June 22, 2023, 
available at https://selectcommitteeontheccp.house.gov/media/reports/
fast-fashion-and-uyghur-genocide-interim-findings.
---------------------------------------------------------------------------
    U.S.-based e-commerce platforms may have been temporary 
beneficiaries of de minimis, as it allowed their platforms to retail 
merchandise consequence and duty-free in a manner unavailable to brick-
and-mortar retailers. But Shein and Temu's success has caused even NRF 
to belatedly acknowledge how de minimis undermines the rule of law.
    Leading U.S. retailers may be tempted to believe that they can 
continue their transition from a mostly brick-and-mortar-based business 
to an e-commerce based `platform' while convincing Congress to exclude 
their foreign website competition, but this too is folly.
    Close one, and another website or app will take its place. Last 
month, TikTok officially launched its U.S. e-commerce service with over 
200,000 vendors enrolled, and sales available from within its app, 
which already has 150 million users in the United States.\31\ A review 
by Bloomberg found that almost all the vendors were from China and that 
counterfeits were rampant.\32\
---------------------------------------------------------------------------
    \31\ Sapna Maheshwari, TikTok Popularizes Products. Can It Sell 
Them, Too? NY Times. Sept. 12, 2023, available at https://
www.nytimes.com/2023/09/12/business/tiktok-shop-e-commerce.html
    \32\ Alex Barinka, TikTok's New Amazon Copycat Is Full of Cheap 
Chinese Goods, BLOOMBERG, Sept. 7, 2023, available at https://
www.bloomberg.com/news/articles/2023-09-07/tiktok-shop-full-of-cheap-
goods-is-live-for-some-us-app-users.
---------------------------------------------------------------------------
    The sole U.S.-based winner from de minimis anarchy is express 
shippers, who have enjoyed record profits by displacing traditional 
importer-wholesalers. Simply put, their businesses will continue to be 
profitable even after de minimis is repealed, as will U.S.-based 
ecommerce platforms, and the short-term marginal extra profits of de 
minims supporters is not worth sacrificing our morals and society.
De Minimis entries provide no useful data
    For all entries other than de minimis, the importer of record must 
be U.S.-based or hire a licensed U.S. customs broker (who must be a 
U.S. citizen). The importer must file an ``Entry Summary'' on CBP Form 
7501 for the shipment. The Entry Summary provides the critical 
information CBP needs to enforce the over 500 laws for which it has 
enforcement responsibilities.
    Because Entry Summaries are not provided for de minimis shipments, 
CBP has no visibility into the parties to the transaction and very 
little useful data. A shipping manifest is all that is needed, and the 
shipping manifest merely declares from where a shipment (not the 
merchandise inside the shipment) originated and where it is being 
delivered, and a short, plain-language description of the merchandise 
(e.g., ``bag'').
    CBP stated in June 2023 that:
   The overwhelming volume of small packages and lack of 
        actionable data limit CBP's ability to identify and interdict 
        high-risk shipments that may contain narcotics, merchandise 
        that poses a risk to public safety, counterfeits, or other 
        contraband.
   In fiscal year 2022, CBP cleared over 685 million de minimis 
        shipments with insufficient data to properly determine 
        risk.\33\
---------------------------------------------------------------------------
    \33\ CBP Commercial Customs Operations Advisory Committee, 
Government Issue Paper, E-Commerce Task Force. June 2023. Available at 
https://www.cbp.gov/sites/default/files/assets/documents/2023-Jun/NGFE-
C?1.PDF.
---------------------------------------------------------------------------
CBP's ``Enhanced Data'' Pilots are Failures
    For 4 years now, CBP has offered two voluntary ``enhanced data'' 
pilot projects for de minimis shipments. One, known as the Section 321 
data pilot, gave ``fast lane'' de minimis privileges to the big three 
express shippers (FedEx, UPS, DHL), three big U.S. e-commerce platforms 
(Amazon, eBay, and Zulily), and three large logistics providers. While 
CBP recently began soliciting additional participants, the on-going 
extension of this pilot is inherently anti-competitive. The other data 
pilot, which is indefinite, is known as ``Type 86 Entry''. Type 86 
Entry is entirely voluntary, but it does allow shippers--including 
foreign vendors--to provide the data elements that would normally be 
required on an Entry Summary, including country of origin.
    Predictably, the data is junk. As reported by International Trade 
Today this April:

``Almost half of de minimis shipments last year were covered either by 
the Type 86 entry test or the Section 321 data pilot program, CBP said, 
but that doesn't mean that the government has a good grasp on what 
merchandise is entering in small packages.
``Sal Ingrassia, whose time as port director at the JFK Airport had him 
overseeing about one-third of the de minimis entries to the U.S., told 
an audience at CBP's Trade Facilitation and Cargo Security Summit April 
17 that while the agency is glad brokers are providing Harmonized 
Tariff Schedule [HTS] codes in the Type 86 test, `we still have a lot 
of concerns,' because they're finding the data is often not correct.
``Ingrassia said ports identified de minimis shipments to examine, and 
reported to the de minimis working group what they learned. `One 
quarter of what we looked at had some type of violation,' he said. `It 
was alarming to see we had so many violations.' He said a large number 
of the violations were either an HTS misclassification `or unmanifested 
merchandise in the shipment, meaning that we had an e-commerce package 
or shipment with three items in it. Only one item was declared. That's 
a real problem for us when we're talking about entry Type 86.'
``Also, for another 25 percent of the packages, CBP asked the company 
to hold the package so CBP could inspect it, and when CBP got there, 
the package had already been released. Ingrassia said that may not have 
always been deliberate, since Type 86 shipments are released 
immediately unless CBP puts a hold on any, and some of the releases may 
have happened before the company knew there was a request to present 
the package. But a non-presentation rate of 25 percent is problematic 
for the agency.
``Ingrassia asked rhetorically: `How can we run a system like entry 
Type 86 without having correct information?' ''\34\
---------------------------------------------------------------------------
    \34\ Mara Lee, ``Type 86 Test Revealing Compliance Weaknesses in 
Small Packages'', INTERNATIONAL TRADE TODAY, April 17, 2023, available 
at https://internationaltradetoday.com/article/2023/04/17/type-86-test-
revealing-compliance-weaknesses-in-small-packages-2304170052.

    De minimis has bred such routine lawlessness at our ports that even 
fentanyl shippers are opting to voluntarily enroll in Type 86 de 
---------------------------------------------------------------------------
minimis entry:

``[CBP Trade Director] Lord said that members of his team, along with 
CBP broker management officials, recently visited nearly a dozen 
different brokers who had filed more than one Type 86 entry for a 
package that CBP discovered contained fentanyl.
`` `Our attitude is: Type 86 still requires reasonable care,' he said. 
He told brokers they will be seeing more times when CBP tells brokers 
that what they filed as a Type 86 will need to be a formal entry, 
`because we're seeing fentanyl like I mentioned, or because we're 
seeing other issues of noncompliance.' ''
                        de minimis and fentanyl
    This committee has received, and continues to receive, ample 
testimony on the devastation of the fentanyl epidemic. Last week, 
Majority Members of this committee issued their Phase 3 Interim Report 
on the crisis at the Southern Border. Section 1 of this report studied 
trends in seizures along the Southern Border, finding that the increase 
of surveillance technology at official land-border ports was driving 
smuggling areas between ports. The Report made this important 
observation:

``While it is true that most of the fentanyl seized by CBP is 
intercepted at official ports of entry, this is because those 
facilities are equipped for that very purpose. Naturally, seizures will 
be higher in locations designed to seize drugs.''\35\
---------------------------------------------------------------------------
    \35\ House Committee on Homeland Security Majority, Interim Report 
on the Third Phase of the Committee's Comprehensive Oversight 
Investigation Into the Crisis at the Southwest Border, pg. 16. October 
10, 2023, available at https://homeland.house.gov/wp-content/uploads/
2023/10/Phase-3-Report.pdf

    The same is true for our commercial shipment ports. By far the most 
secure are our ocean vessel ports, where shipments arrive virtually 
entirely by way of ``formal entry''. Formal entry shipments are the 
least likely to contain contraband or counterfeits. And for ocean 
vessels, CBP receives detailed shipping manifests far in advance of the 
cargo's arrival. Indeed, ocean shipping vessel manifests are even made 
freely available on-line--something that is long overdue to be 
replicated via other modes of transport.
    De minimis shipments arranged via e-commerce tend to arrive by 
express courier or mail or by logistics companies via air cargo or 
truck. A high volume of small packages with little-to-no advance 
manifest information. In CBP's Strategy to Combat Opioids, the agency 
stated as follows:

``The advent of e-commerce has added another layer of complexity to 
this problem. Illicit opioids can now be purchased on-line from the 
comfort of one's home. Opioids entering the country through express 
consignment or international mail have a substantially higher purity 
level than the opioids entering along the Southwest Border.''\36\
---------------------------------------------------------------------------
    \36\ CBP, Strategy to Combat Opioids, May 2021, available at 
https://www.cbp.gov/sites/default/files/assets/documents/2021-May/CBP-
Opioid-Strategy.pdf.

    The fact that fentanyl is even entering through CBP's enhanced de 
minimis data pilots should serve as an alarm. Shut it all down. As 
stated earlier, de minimis offers zero societal benefit. Shutting down 
smuggling over the Southern Border, both through and between ports, is 
an imperative that we are making progress on through investments. 
Shutting down de minimis now, either by way of regulation from the 
administration or by statute from Congress.
                        how to repeal de minimis
    Much attention is paid to the increase of the de minimis threshold 
from $200 to $800 in 2016, but the truth is the vast majority of 
shipments declare a value far below $200. Furthermore, the monetary 
limit is unthread to the U.S. transaction price, and instead is tied to 
the ``fair value'' in the country of shipment. This goes back to how de 
minimis was never intended to be an avenue of commerce. CPA discussed 
the details of how de minimis came to be, and how to repeal it, in a 
submission to the U.S. Senate Committee on Finance in July.\37\ This 
submission also discusses de minimis's total undermining of consumer 
safety laws, from children's toys to cosmetics.
---------------------------------------------------------------------------
    \37\ CPA Submission to the U.S. Senate Committee on Finance, July 
11, 2023, available at https://prosperousamerica.org/wp-content/
uploads/2023/08/230711-CPA-ltr-Customs-Reform.pdf.
---------------------------------------------------------------------------
 false assertions from de minimis supporters, and even cbp's office of 
                                 trade
    Express shippers, primarily by way of certain trade associations, 
have invested heavily in distorting the truth about de minimis 
shipments. Their assertions routinely are baseless, provided without 
citation. In August, CBP published a ``Falsehoods & Facts'' webpage 
directly rebutting these assertions, with supporting citations. To the 
extent the committee has questions about assertions they have heard in 
support of de minimis, we encourage the committee to visit this 
webpage: https://prosperousamerica.org/falsehoods-facts-the-truth-
about-de-minimis/.
    Finally, it should be noted that in October, 2022, CBP's Office of 
Trade published a slide presentation stating that the ``Total Value'' 
of de minimis shipments in the agency's fiscal year 2021 was 
$39,876,651,152. This is incorrect, and the true number is unknowable. 
This figure represents only the value of de minimis shipments for which 
electronic information was provided, which is a minority of total 
shipments. While CBP confirmed this error to CPA in an email, the 
Office of Trade has declined our public calls to correct the document. 
This incorrect figure has become an important part of the advocacy from 
de minimis supporters, suggesting that the value of de minimis 
shipments is going down or negligible. This is addressed in more detail 
at the CPA Falsehoods & Facts web page above.

    Mr. Bishop. Thank you, Mr. Stumo. Members will be 
recognized by order of seniority for their 5 minutes of 
questioning. An additional round of questioning may be called 
after all Members have been recognized. I now recognize myself 
for 5 minutes of questioning.
    Ms. Glas, I'll begin with you. In my home State of North 
Carolina, we have the largest textile mill industry in the 
Nation, driven by a skilled work force and innovative research.
    Can you describe the impact of failing to prevent imports 
linked to forced labor in China that it has on the U.S. textile 
manufacturers?
    Ms. Glas. Thank you, Congressman Bishop, and thank you so 
much for your support for our industry in your opening 
comments.
    I can't tell you how consequential the textile industry is 
to the State of North Carolina and rural communities across the 
United States. It is a strategic supply chain because of the 
products you noted in your opening statement that we make. 
Eighty percent of what we make in North Carolina in terms of 
yarn spinning is then sent to places like Central America made 
into a finished garment, and coming back free trade agreement, 
having to comply with labor and environmental standards.
    If you talk to anyone in our industry right now, they will 
say they are running at 50 percent capacity. So it is not just 
economic market forces that are impacting the most innovative, 
resilient, automated industry in the world, but it's also 
impacting 1.5 million workers in our Western Hemisphere, 
exacerbating the migration crisis.
    Yet, the statistics I talked about--and you know I'm fired 
up about this issue--the statistics I talked about on the CBP 
website advertises to the Chinese and the world, Guess what? 
We're not doing much here. We have had a very simple ask, and 
we're asking this committee, please help our industry. This is 
an immediate crisis.
    This is not just about the State of North Carolina. This is 
about the very supply chains just years ago when nurses were 
wearing garbage bags came to the forefront of helping in a 
crisis. I can't even tell you the consequences. A lot of our 
textile mills are the only tax base in the community. When it 
comes away, there's no new jobs that come overnight.
    Mr. Bishop. Yes. Absolutely.
    Ms. Glas. So it requires a lot of oversight over CBP to ask 
them the hard questions we're asking, and to ask the 
administration, if you can stop the bleeding by putting out a 
public road map, helping increase penalties and inspections, 
showing our industry that we're fighting for them at this point 
in time is what's necessary, and we must close the de minimis 
loophole.
    Mr. Bishop. The numbers are striking. I think as a matter 
of enforcing trade law for the American people, the notion that 
American producers should be required to compete against slave 
labor from a denier of human rights abroad is the easiest thing 
for American consumers and voters to understand. I think they 
entirely support enforcement efforts against it.
    You know, the numbers that I thought of interest--there was 
this article before I lose my time, I want to ask unanimous 
consent, enter into the record a recent Reuters article titled, 
``U.S. Customs Finds Garments Made With Banned Chinese 
Cotton.''
    Without objection, so ordered.
    [The information follows:]
  Exclusive: US Customs finds garments made with banned Chinese cotton
By Katherine Masters
September 1, 2023 1:07 AM EDT
    NEW YORK, Sept 1 (Reuters).--Roughly 27% of tests performed on 
shoes and garments collected by U.S. Customs and Border Protection in 
May showed links to cotton from China's Xinjiang region, which has been 
banned because of concerns over forced labor, according to documents 
obtained by Reuters under the Freedom of Information Act.
    The results, which have not been previously reported, highlight the 
challenges of complying with the U.S. law aimed at blocking imports of 
cotton linked to forced labor in China. It requires cutting out the far 
western region from apparel supply chains.
    To help enforce the law, customs officials have turned to isotopic 
testing, which can link cotton to specific geographic areas by 
analyzing the concentration of stable elements like carbon and hydrogen 
present in both the crop and the environment in which it has been 
grown, experts say.
    Ten of the 37 garments collected by Customs and Border Protection 
in May returned as ``consistent'' with Xinjiang, the documents show. So 
far, officials have collected at least three batches of footwear and 
apparel as part of their enforcement efforts, on Dec. 22, 2022, April 
11, 2023, and on May 23, 2023, according to government documents 
released to Reuters.
    Overall, 13 of 86 total tests, or 15 percent, were deemed to be 
consistent with Xinjiang.
    Much of the other information on the documents was redacted, 
including brands of the garments that were tested. Descriptions of the 
items detail a range of apparel, from boxers, jeans and tee-shirts to 
baby onesies and dresses. All contained cotton, in some cases mixed 
with other textiles such as spandex and rayon.
    One item collected in May that returned as consistent with Xinjiang 
was described as a ``Mickey T-shirt'' made from a blend of cotton and 
polyester. Laura Murphy, a professor of human rights and contemporary 
slavery at Sheffield Hallam University in England, said the range of 
products and high rate of positive samples underscored the difficulty 
of enforcing the ban.
    ``The amount of Xinjiang cotton entering the U.S. should be zero,'' 
she said. ``So, anything above zero percent should be a real warning.''
    Customs officials did not immediately respond to questions about 
the test results, including how they selected garments for the 
analysis.
    In June, the agency told Reuters in June it ``prioritizes action 
against the highest-risk goods based on current data and 
intelligence,'' but said sharing more details publicly would 
``compromise the success of our work and therefore U.S. economic and 
national security.''
    Isotopic testing is not yet a ``routine process'' for U.S. Customs, 
Eric Choy, the agency's executive director for trade remedy and law 
enforcement, told Reuters in June. He added that officials at 
individual U.S. ports can request testing if they receive allegations 
about specific shipments or suspect the goods have links to Xinjiang.
    Many retailers have also turned to isotopic testing in a bid to 
keep their supply chain free of cotton with links to forced labor. 
Goods produced partially or entirely in Xinjiang are banned in the U.S.
    A Federal report published last year estimated that cotton from 
Xinjiang accounted for roughly 87 percent of China's production and 23 
percent of the global supply in 2020 and 2021. Countries including 
Vietnam, Cambodia, and Bangladesh--some of the world's largest 
producers of cotton clothing and consumer goods--still import large 
quantities of finished fabric from China. It then often makes its way 
to the U.S. in the form of apparel made by suppliers in those 
countries, according to the report.
    Retail executives and testing companies told Reuters that isotopic 
analysis is often used to verify that suppliers are only using cotton 
sourced from approved locations, such as the United States or India. 
Victoria's Secret, Ralph Lauren, and ecommerce giant Shein are among 
the companies that contract with Oritain, an isotopic testing company 
headquartered in New Zealand, to verify the origin of cotton in their 
supply chains.
    U.S. Customs and Border Protection does not perform its own testing 
and has paid Oritain more than $1.3 million since 2020 for cotton goods 
analysis, according to records from the agency obtained by Reuters 
under the Freedom of Information Act. However, the agency redacted the 
name of the provider that analyzed the three batches of footwear and 
apparel collected in December, April and May, and did not immediately 
confirm whether Oritain had performed the testing.
    Officials said isotopic testing alone is not enough to clear 
shipments detained at U.S. ports for suspected links to Xinjiang. More 
retailers and manufacturers are ``spot checking'' materials from yarns 
to finished fabrics at various points in their supply chains using the 
analysis. Still, there is no guarantee those same materials were used 
in the finished products being investigated, according to Choy.
    ``It's not a silver bullet,'' he said. ``Testing that's done at the 
spinning level or the yarn level of the supply chain doesn't 
necessarily represent the actual shipment.''
    Reporting by Katherine Masters; Editing by David Gregorio.

    Mr. Bishop. You know, it talks about in these enforcement 
or testing occasions three batches of footwear on December 
2022, April 2023, May 2023. On average, the amounts there were 
as much as 15 percent. But on some occasions, 23 percent when 
they do isotopic testing. Tell me about isotopic testing, and 
why is it not being used more widely?
    Ms. Glas. That's a fantastic question. We're asking that 
question. So Congress' bipartisan support for this topic and 
bipartisan support for investing in UFLPA, as part of the 
appropriations set aside $101 million for UFLPA enforcement, 
not just for textiles, but all the goods that we were talking 
about on this panel today and beyond.
    So far, according to that Reuters article--and please note, 
Chairman, that was released as part of a FOIA request that our 
industry has not seen. But according to the Reuters article, it 
says they've only utilized $1.3 million on isotopic testing. 
Where is this money going, and why? Textile and apparel is one 
of the primary forced labor products coming out of Xinjiang. 
Xinjiang production of cotton has grown.
    We have the ability, Congressman, just so you understand 
the process--isotopic testing basically, you can send a product 
to a lab. You can take a few of the articles out of a 
particular shipment, send it to a lab, and determine--we have 
the analysis to determine where is that cotton grown. So, a lot 
of the U.S. yarn and the products coming out of our Western 
Hemisphere uses U.S. cotton grown across 18 States. We have 
this technology. This is not hard. We just need to utilize it 
more in order to determine and deter the trade, and publicly 
tell people, these are the folks who are violating it. You'll 
never deter the trade if you're not stepping up your 
enforcement activities.
    Mr. Bishop. You talk about de minimis, and we will come 
back to that. My time has expired, but I will just comment 
before passing it on to the Ranking Member, that what's de 
minimis is the use of this isotopic testing and maybe other 
interdiction means, but it just doesn't make sense. My 
understanding is that's been resourced. I think we need to know 
from CBP why it's not being more widely used.
    Now, I recognize Ranking Member Ivey for 5 minutes of 
questions he may have.
    Mr. Ivey. Thank you, Mr. Chairman. I'll actually pick up on 
the de minimis issue because I did want to have a follow-up 
with Mr. Stumo.
    I think you suggested eliminating de minimis entirely?
    Mr. Stumo. No. 1, go back to pre-1994 where merchandise 
imports use a Customs broker. So don't let consignees bring in 
de minimis. So that's the most important part.
    Mr. Ivey. OK.
    Mr. Stumo. Second, if you have very risky goods, like 
apparel, or risky countries, like China, which 90 percent of 
our counterfeits--80 to 90 percent of our counterfeits come 
through, they're ineligible. But Canada doesn't let de minimis 
come in through Canada posts. The European Union with their vat 
de minimis, they tried to go down to like 10 bucks, I think, 
for vat de minimis, and they had tons of cell phones allegedly 
coming through at 8 bucks. You know, so they just shut it down 
to zero. I just talked to the Mexican Retail Federation, they 
want to shut it down. So the broker--the consignees should be 
shipping. They're not--they can't enforce 500 different trade 
laws.
    Mr. Ivey. Well, let me follow up on that. So with respect 
to--just take it down not from 800 back to 200, but just take 
it to zero is what you're suggesting?
    Mr. Stumo. You know, we can still bring in the knickknacks 
and snow globes from overseas and let grandma send us a book, 
but for this to be a major commercial channel, you're going to 
ease so much burden from CBP by redirecting these goods right 
through normal entry where they have to file the paperwork, the 
Customs brokers do it just like they used to.
    Mr. Ivey. All right. So you wouldn't need additional CBP 
staff?
    Mr. Stumo. Well, I can't guarantee you wouldn't need 
additional, but you wouldn't have 3 million. You'd ease the 
burden a lot.
    Mr. Ivey. What I'm trying to get at, though, is, you know, 
what do we need to do to get it there? So I appreciate your 
point about eliminate de minimis, but in order for us to 
actually make that real, we need to know if there are 
additional resources that would be required. That's all I'm 
trying to say.
    Mr. Stumo. I'd be supportive of additional resources.
    Mr. Ivey. OK. Ms. Glas, with respect to the isotopic 
testing--because I remember certain types of testing for, you 
know, cases that I handled before--how long does it take to do 
the testing, and you know, what does it entail?
    Ms. Glas. Based on my analysis with industry, it can take 3 
to 4 weeks. Maybe it can be expedited. It's not a super-
involved test. It just requires, does the lab have time to 
actually run the testing?
    Mr. Ivey. Fair enough. So with respect to a particular 
shipment--I apologize about cutting you off, but I only get 5 
minutes.
    Ms. Glas. Yup.
    Mr. Ivey. So a shipment would come in--because I think part 
of what happened with these rules--it all happened before I got 
here, but you had people who were trying to ship goods into the 
United States, and they were worried about how long it took and 
how much it costs and how it delayed those activities.
    So are you suggesting that the way this would work is they 
would do samples? They would test all of it? What are you 
proposing?
    Ms. Glas. What they're doing right now, based on the $1.3 
million that they have tested, they've tested small batches of 
goods that they have--apparently CBP determined has a higher 
risk of Xinjiang cotton. So this is not a very difficult test. 
In fact, a lot in the private industry are using the testers to 
ensure that their supply chains are transparent in making sure 
that they are not sourcing Xinjiang cotton by certain 
importers. But others are just using the free flow of de 
minimis to get their products in because they know these are 
largely un-inspected. Other reporters, like Sheridan Prosso 
from Bloomberg, did a report that tested various Shein products 
she bought off the website since it's essentially a de minimis 
company, and practically all of them tested positive for 
Xinjiang cotton.
    Mr. Ivey. OK. So would your organization--your organization 
represents a group of textile companies I take it?
    Ms. Glas. Yes.
    Mr. Ivey. OK. So to the extent there were delays that were 
created by this process if we add this in, your association 
members would be supportive of that, because I'm sure there are 
other businesses that would be complaining about it? You'd 
stand up and say this is something the United States needs to 
do?
    Ms. Glas. Absolutely.
    Mr. Ivey. OK. With respect to extra costs that that might 
entail, your organization would support providing additional 
resources so that those tests could be done, and additional 
staffing, and the like?
    Ms. Glas. Of course.
    Mr. Ivey. OK.
    Ms. Glas. But it's not clear to me that CBP doesn't have 
the resources now to start immediately stepping up enforcement 
activities.
    Mr. Ivey. Well, I did see in one of the statements that 
they sent in to us that they had done a little bit more in the 
way of inspection than I had assumed. Since the UFLPA went into 
effect through May 29, 2023, CBP's stopped more than 4,000 
shipments of goods valued at over $1.3 billion for enforcement 
action review. I know that's just a drop in the bucket, but 
4,000 shipments is still--it's not like they're just sitting 
there eating lunch every day, right?
    Ms. Glas. Just to put it in context, 72 percent of the 
apparel coming in from China that's cotton contains Xinjiang 
cotton.
    Mr. Ivey. I don't disagree with that stat. But what I'm 
trying to get at, though, is in order to check the other 72 
percent, it's going to take additional resources. They're going 
to need more people and more ability to do it.
    Ms. Glas. If CBP needs additional resources, they need to 
tell you.
    Mr. Ivey. You'd support it?
    Ms. Glas. Yes. Of course I support it.
    Mr. Ivey. OK.
    Ms. Glas. But I also want to make sure that--right now, 
we're bleeding. So, I'm trying to figure out a way to stop the 
bleeding by using resources already appropriated in order to 
address that. If they need more resources, we'll be the first 
to support that, first in line, and we'll advocate for that.
    Mr. Ivey. Excellent. Thank you so much. I yield back.
    Mr. Bishop. Gentleman yields back.
    I now recognize Mr. Ezell for 5 minutes of questioning.
    Mr. Ezell. Thank you, Mr. Chairman. Thank you all for being 
here today. We really appreciate the importance of this 
hearing, and it's clear we must ensure the U.S. Customs and 
Border Protection has the tools necessary to combat this forced 
labor.
    We have discussed how the Chinese Communist Party is 
sending the Uyghur population into slave labor, undermine 
industries across the world. This subjection of Uyghurs has 
been clearly declared genocide by both the Trump and the Biden 
administration. Today, I want to start by focusing on the slave 
labor practice by the CCP, manipulates the markets in the 
seafood industry.
    Reports have shown the CCP has been using the slave labor 
practice on fishing vessels and at seafood processing plants. 
These forced labor practices have allowed the CCP to flood the 
global market with foreign-raised shrimp. It's placed a massive 
financial burden on American shrimpers, including those in 
south Mississippi where I live.
    Mr. Stumo, I believe one way the United States can create a 
fair market for our domestic producers is to stop importing 
goods that are produced through forced slave labor since I 
think we can all agree on that.
    Can you describe how the CBP uses loopholes to get our laws 
that should stop products that are involved with this slave 
labor?
    Mr. Stumo. Yes, sir. How the shrimp gets into the United 
States is a good example of the challenges the Government faces 
in responding to Uyghur forced labor. Wild-caught Argentine 
shrimp could be, you know, shipped to a factory in Xinjiang 
province for processing by Uyghur forced labor before being 
sent here. There is a problem with manifest transparency. Bills 
of lading for open--ocean freight are public. As was said, 
truck and rail is not. Air is not.
    This committee or the Congress should be making all 
manifests public, and should require further supply chain and 
transparency. Shift the burden to prove you have the right to 
enter our country because you are compliant with our laws 
shifted to the importer. That would be important.
    Also, I would say that with regard to Mr. Ivey's questions 
and yours, even before the UFLPA, we had Section 19, U.S.C. 
1307, which is the original law preventing forced labor goods 
from coming in. Customs has used it at times.
    In 2018, we had a WRO withhold release order against one 
entity in China for forced labor goods. But then they did 
another one for all of Turkmenistan, a country-wide WRO. What 
should happen--and unfortunately, the Uyghur Forced Labor 
Prevention Act didn't go country-wide with China. It went 
region-wide, which is very difficult to find out what region in 
China for Customs. You do a full country-wide, and then you 
provide exemptions. What should happen is if we've got cotton-
to-cotton products, country-wide restriction, and then let them 
demonstrate that they are compliant. But you only get in if 
you're compliant. The whack-a-mole of entity by entity, 
laudable, but it's much more labor-intensive.
    Mr. Ezell. Thank you. How do practices such as the state-
run labor transfer programs used by the Chinese make 
enforcement more difficult here in the United States?
    Mr. Stumo. Well, of course, Uyghur forced labor is beyond 
Xinjiang. It's all over the country. It's state as opposed to 
other forced labor findings by the Department of Labor, which 
find this company, or this sector. This clearly comes from 
Beijing. It's a state program in Beijing. A state-sponsored 
genocide rather than sort-of somebody in the country doing it.
    So China doesn't let people do business due diligence. They 
don't let people come into the country to inspect. It's a black 
box. If you try to pierce that black box, you'll be prosecuted 
or disappeared. So you have to have a presumption that it can't 
come in once you find that this sector is a problem, and then 
they have to prove, any importer have has to prove that it can.
    Mr. Ezell. I'll tell you, I have been in contact with--I'm 
just about out of time--with so many of the shrimpers on the 
Mississippi Gulf Coast that are just--I mean, they're going out 
of business. It's a tragedy because, you know, we've got such 
wonderful seafood down there on the coast, and it's just really 
hurting our hometown shrimpers.
    So, you know, we need to, as a Congress and as much 
information as we can get, to put a stop to some of this.
    So, Mr. Chairman, I yield back.
    Mr. Bishop. The gentleman yields back.
    I now recognize Mr. Thanedar for 5 minutes of questions.
    Mr. Thanedar. Thank you, Chairman Bishop. I appreciate this 
hearing, and thank you for all of you to be here.
    With the huge volume of goods that come into this country 
every day and more and more each year, CBP faces a real 
challenge in keeping goods made with forced labor out of this 
country.
    Democrats have supported CBP by investing in people. In 
fiscal 2023, Congress and President Biden provided the 
resources for CBP to increase the number of personnel enforcing 
the Uyghur Act by more than 250 staff.
    But, in addition to people, CBP requires technological 
solutions. CBP already uses the Advanced Trade Analytics 
Platform to collaborate and share information on shipments that 
are at risk for potentially violating import laws.
    Now, I ran testing labs for 25 years, so I understand the 
technology behind the isotope testing. It is something that's 
well within the reach, you know. They need equipment. They need 
the personnel trained. It's an easy test to do, and CBP should 
be able to do that.
    So this platform has identified a weekly average of 162,000 
of these types of high-risk shipments at an estimated value of 
51 million per week, but more needs to be done.
    My question to you, Ms. Glas, is, what can Congress do to 
support CBP's investments in technology to help map supply 
chains and inform risk-based, intelligence-driven enforcement 
of the Uyghur?
    Ms. Glas. It's an excellent question. First, according to 
the Reuters report that published a FOIA request, it was 
reported that CBP is working with one isotopic testing company. 
I think the first question is, why are you only working with 
one?
    Mr. Thanedar. Sure.
    Ms. Glas. Are you not--why can't you purchase isotopic 
testing equipment yourself to do this internally, because a lot 
of these private companies have personal relationships with 
other companies, like Shein and whatnot.
    So what's the conflict of interest? What is limiting CBP's 
ability to use isotopic testing? Our industry just briefed 
certain agents who are in the field at the ports. They weren't 
even aware isotopic testing existed or their ability to utilize 
it. They didn't know that's a problem they should be looking 
for.
    So the basic training among CBP officials, it makes no 
sense to our industry that all this money was set aside by 
Congress for enforcement activities, but we've seen substantial 
enforcement activities go down first. It's anemic for UFLPA.
    I aspire one day it to be the electronics industry, and I'm 
glad we're stopping those products, but they had at least 1.5 
billion products--dollars' worth of products detained. We have 
39 million.
    So really figuring out from CBP, OK, what is limiting you? 
Asking the industry, asking folks like the National Cotton 
Council. Hey, you represent American cotton farmers. Can you 
partner with CBP on testing to make sure? Are there other 
private entities who--because that would provide opportunities 
for our U.S. cotton farmers.
    How can we partner more effectively with CBP to get them 
the top technology that they need? Also, are we testing these 
products at retail? Are we taking products in a 40-mile radius, 
going to 200 retailers and taking these products off the shelf 
and testing them? When I've asked CBP this question, they're 
not sure they have the authority to do that. I'm trying to 
figure out the statute to figure out why they wouldn't have the 
authority to do that.
    So we need to get a lot more aggressive, and we can be--it 
would not take a lot of time for someone to run around to a few 
stores with the additional personnel that they have to figure 
out, OK, let's make sure we're keeping everybody honest.
    So I'd love to see a much more aggressive posture in that. 
Thank you, it's so wonderful that you have this background on 
testing.
    Mr. Thanedar. Thank you so much. Thanks for your answers.
    Mr. Chair, Chairman Bishop, my time is up, so I yield back.
    Mr. Bishop. Thank you, Mr. Thanedar.
    The gentleman yields back, and I now recognize Mr. Strong 
for 5 minutes of questioning.
    Mr. Strong. Thank you, Chairman Bishop.
    Ms. Glas, in your testimony, you mentioned the impact that 
increasing shipments have had on domestic manufacturers. Can 
you talk more about this and specifically the impact that you 
have seen in our textile industry, like cotton farmers in 
Alabama?
    Ms. Glas. This has had--thank you for the question. This 
has hurt the entire supply chain, and it has helped superpower 
cotton production in China. We have a real opportunity here to 
help farmers in States like Alabama and Mississippi and North 
Carolina and whatnot gain more market share if we're sourcing 
more domestically and here at home.
    But, right now, because we're allowing these products to 
come in through de minimus, we're allowing--we're not doing 
inspections like we should for UFLPA, it's signaling to the 
Chinese and others in the world that are trade predators it's 
OK to flood our marketplace. You know what happens? We end up 
shutting plants in Alabama and in Virginia, in some of the most 
competitive plants in the world.
    I--every morning I get a text about some crisis happening 
in our industry. They are so pleased this committee is having a 
hearing because there hasn't been a committee that we're aware 
of who have actually brought these issues before on Customs 
enforcement. We need to be doing this regularly in order to ask 
these officials: (A) what do you need; and, (B) what's 
deterring you right now? So please know we want to be an active 
partner with you.
    On de minimus, if the committee could amplify with the 
administration right now, please use your authorities under 
rulemaking on de minimus, you could divorce literally overnight 
all e-commerce shipments from receiving de minimus.
    It doesn't mean you can't be on-line and ordering a 
product. Guess what, guys? We're not going to reward the 
Chinese. We're not going to reward the CCP, and we're not going 
to reward the rest of the world by allowing for unexamined 
packages coming in duty-free, putting us out of business.
    Mr. Strong. Thank you, Ms. Glas.
    Furthermore China is major supplier of textile yarns and 
fabrics to other countries that manufacture Fenner's products 
for export to the U.S. market.
    What enforcement tools can CBP deploy to determine the 
origin of textile inputs sent to third countries for 
manufacturing and prevent illegal transshipments?
    Ms. Glas. CBP could use a lot more of its isotopic testing 
authorities. They could be, again, going to retail, pulling 
products from the shelf with labels that say ``Made in 
Vietnam,'' ``Made in Indonesia,'' testing where that cotton 
comes from.
    There's a lots of deterrents that can happen that would 
easily change the trajectory literally overnight. I'm looking 
for a lot more stepped-up enforcement activities. I think we 
need an all-out response that's aggressive to help stop the 
bleeding and to help stop China hiding its cotton through the 
entire marketplace right now. Production is going up.
    They have 25 percent or more unemployment amongst their 
youth. They're propping up their industry, subsidizing them, 
and they're using illegal forced labor to gain market share, 
putting our manufacturers out of business and wiping out our 
tax bases.
    Mr. Strong. That is correct.
    Ms. Glas, a significant percentage of the textile and 
apparel imports come from Central and South America, countries 
with whom we've established a variety of free trade agreements.
    Those agreements require firms to show that the production 
of textiles and finished goods must be conducted in the region 
to obtain duty-free benefits.
    How is this system being bypassed or observed to allow 
forced labor products, cotton, to enter the United States?
    Ms. Glas. We're starting to see more Xinjiang cotton coming 
in from the region. We just had the first detention of products 
coming in from Nicaragua that were detained under suspected 
violation.
    We're now seeing, if you look at the trade data, billions 
of yarns and fabrics coming from China and Asia through the 
region, yet some of this is claiming that it's made in the 
region and made in the United States. That undermines our 
industry. It undermines all their investments.
    But why has Customs enforcement in our free trade agreement 
countries substantially gone down since 2018? We are noted by 
Congress as a priority sector. Why are we a priority? 
Essentially, 40 percent of the duties are collected--are 
collected on our industry.
    So people want to cheat the system. We can't allow people 
to bypass the rules under our free trade agreements to erode 
our industries and industries of our partner countries, and 
that's why we need immediate help.
    Mr. Strong. Thank you.
    Chairman Bishop, I yield back.
    Mr. Bishop. The gentleman yields back.
    I now recognize Mrs. Ramirez for 5 minutes of questioning.
    Mrs. Ramirez. Thank you. I like how you said the last name. 
Thank you, Chairman, I appreciate it, and Ranking Member Ivey.
    This hearing was presented to us as a bipartisan 
opportunity to discuss bipartisan law. However, I don't think 
that the Coalition for a Prosperous America can really be a 
voice in bipartisan conversation, and here's why.
    The chairman of the coalition, Zach Mottl, he's a resident 
of Burr Ridge, Illinois. I'm from Illinois. Just a few minutes 
from my district, actually. So I know of him. The chairman is a 
vaccine-denying, anti-abortion, right-wing activist who called 
President Joe Biden, the President who signed the Uyghur Forced 
Labor Prevention Act, China Joe.
    Mr. Mottl and his organization are not fit to advise 
Congress on trade policy or human rights policy, just as he was 
not fit to be a trustee or acting mayor of the Village of Burr 
Ridge, Illinois. You see, in 2019, when Mr. Mottl was acting 
mayor of Burr Ridge, 3 Burr Ridge Village officials called for 
Mr. Mottl to step down, saying he had politicized the position 
in violation of a promise.
    The Village board also censured Mr. Mottle as a trustee 5 
times and called for his resignation multiple times. I don't 
believe--and I know we've all been in this hearing now for a 
little bit over an hour--that, if Mr. Mottl is not good enough 
to serve the people of Burr Ridge, that we should be hearing 
from someone that directly works under Mr. Mottl.
    So, with that on the record, I would like to pivot and ask 
questions to the other witnesses.
    Mr. Stumo. May I actually respond, please?
    Mrs. Ramirez. I don't have a question. I have a limited 
amount of time.
    Mr. Stumo. We've been in business since 2007, and we have a 
bipartisan board.
    Mrs. Ramirez. I'm reclaiming my time. I'm reclaiming my 
time. I'm reclaiming my time.
    Mr. Bishop. The time belongs to the Member. If another 
Member decides to give you time--we may have a second round of 
questioning, we'll see. But the time belongs to the Member.
    Mrs. Ramirez. Thank you so much.
    For Ms. Greve, we've spoken a lot about goods made with 
forced labor in Xinjiang, specifically, but the Uyghur Forced 
Labor Prevention Act also covers goods made outside of the area 
if there's evidence that workers have been transferred to other 
parts of China for forced labor or under coercive conditions.
    So let me ask you: To what extent should importers be 
paying attention to their supply chains that originate from 
other parts of China that may involve forced labor forced upon 
the Uyghur population?
    Ms. Greve. Thank you very much, Congresswoman. Our 
coalition, the Coalition to End Forced Labor in the Uyghur 
Region, has been calling since July 2020 for every corporation 
to know their global supply chain. This law puts--makes that a 
legal obligation. If your imported product is detained for 
examination, you have to show CBP that you have a complete 
supply chain tracing.
    Certainly, a number of industries are using Uyghur forced 
labor outside of the Uyghur region. Certainly, any company that 
has a, quote--most companies--zero tolerance for forced labor. 
If they say that, they need to know their supply chain.
    Mrs. Ramirez. Thank you. So I have just one more question, 
and, Mr. Mattis, Ms. Glas, or Ms. Greve, you can answer this: 
Knowing that importing goods made with forced labor has long 
been prohibited, and Congress has strengthened CBP's ability to 
stop goods from Xinjiang made with forced labor from coming 
into the United States, what are you seeing other countries 
doing to reduce some of that forced labor goods from entering 
the markets? Then how should the United States be working to 
ensure that that's happening? Any of the three of you. We have 
about a minute.
    Ms. Glas. Just quickly, not every country has a ban on 
forced labor products, OK, unfortunately, even including 
cotton. So our Government, on a diplomatic level at the State 
Department, and some of our agencies needs to be working with 
the other governments to more effectively enforce this.
    To Ranking Member Ivey's question related to the Congo, we 
are seeing the Chinese take advantage of other countries and 
trying to illegally transship or invest in assets that make it 
almost impossible under the BRI Initiative that help perpetuate 
the use of forced labor on the ground or facilitate forced 
labor products.
    Our State Department should be taking a lead role, along 
with CBP, to help deter this trade, and we need to be working 
with the international community.
    Mrs. Ramirez. Thank you. Mr. Mattis.
    Mr. Mattis. The European Parliament is considering formal 
legislation to mirror in some ways the Uyghur Forced Labor 
Prevention Act but primarily to deal with forced labor 
generally internationally. But it's been very clear in the 
public releases from the European Parliament that this is 
primarily directed at the PRC, that this is their major 
concern.
    So I think for you, as Members of Congress and meeting with 
your European counterparts, particularly those in the European 
Parliament, this is something that you can do to support U.S. 
diplomacy and the effort to enforce.
    Mrs. Ramirez. Thank you.
    My time is up, and so I'll yield back. Thank you, Chairman.
    Mr. Bishop. The gentlelady yields back.
    I think the question is whether, at the discretion of the 
Chair with the concurrence of the Ranking Member, I think we'll 
proceed to a second round of questioning.
    Mr. Ivey. Certainly, Mr. Chairman.
    Mr. Bishop. With that--and, Mr. Stumo, I think if you want 
to have an opportunity to respond to that, I'll yield you some 
time.
    I will say this hearing has been extraordinarily 
bipartisan, and there's been a commonality in the witnesses and 
the Members in terms of digging into the issue, but I will 
yield you 30 seconds or so if you wish to address the matters 
that were raised by Ms. Ramirez.
    Mr. Stumo. Yes. We're very bipartisan. We have very strong 
Democratic members who have been big supporters of Democrats. 
We have strong Republican members. They all have very strong 
feelings for their party and on other issues.
    But trade and forced labor doesn't cut across--cleanly 
across party lines. It's a very strong issue for our country, 
for our employment. While there's a ton of partisan issues out 
there, this isn't one of them. I'm proud to be working on this 
issue, which I can work with people like Earl Blumenauer, 
Ranking, or Chairman Jason Smith, Sherrod Brown, Marco Rubio, 
et cetera.
    In fact, on de minimus we do have three bipartisan bills 
that this committee may want to look at from Ranking Member 
Blumenauer in Ways and Means Trade Subcommittee, joined by Neal 
Dunn, Sherrod Brown, joined by Marco Rubio in the Senate and 
Bill Cassidy from Louisiana, joined by Tammy Baldwin and J.D. 
Vance. So----
    Mr. Bishop. Thank you, sir. I appreciate the point. I think 
the point is well made.
    Mr. Mattis, I want to direct to you maybe, because I didn't 
hear you addressing the question of--you talked a little bit 
about flood and--and the presumptions built in and so forth, 
the way it operates, the way maybe it ought to be changed. I'm 
hearing about the de minimus exception and ways it ought to be. 
It seems to be a mockery of its own name, because about a 
billion packages. You can see why you couldn't set up a 
regulatory interdiction there that would work.
    This point that Ms. Glas has made and this article seems to 
make that CBP spent about a million dollars doing isotopic 
testing, I noted Mr. Thanedar's comment that it's easy testing 
to do. I'm mystified and I know--perhaps we need to ask CBP, 
but why would there not be more resources devoted to doing 
that? Do you have any insight on that, given your policy 
expertise?
    Mr. Mattis. Frankly, I'm not sure why more hasn't been 
done. I know that when the process began of drafting this piece 
of legislation and working it through and getting technical 
assistance, there were something like 30 billets at CBP that 
were not all full-time employees.
    It added up to 30 full-time employees that were devoted to 
forced labor enforcement investigations at CBP headquarters. 
That was simply too small, too few, and not enough resources.
    So I think one of the things that I've seen, at least in my 
experience in government, was that, when you ram--when you 
provide a bunch of money or you provide a bunch of resources, 
when you have such a small existing capacity, it takes time to 
build out, and that's kind of a funnel that things are being 
forced through.
    I think, over time, we can--I think we can all agree that 
CBP has not moved fast enough or we would like it to have moved 
more. The direction has been in the right way. We just haven't 
seen it move at the speed and scale that it should be.
    Mr. Bishop. Anything to add to that, Ms. Greve?
    Ms. Greve. I would note that it's quite important to 
maintain the level of funding. We heard that the $70 million 
addition in fiscal 2023 may not be maintained in 2024, and that 
would be a real blow backward. It takes time to cost out these 
contracts, as you know, in government. To then suddenly drop 
the number will completely stop this momentum.
    Mr. Bishop. I hear that. I do wonder what became of the $70 
million that was used, and I think we need to ask.
    Mr. Stumo, do you want to add something?
    Mr. Stumo. I would just add one thing. I mentioned before 
when Mr. Ivey was out that the Withhold Release Orders with 
authority under section 307 or 19 U.S.C. 1307, you can do a ban 
on products like we did with Turkmenistan, all products, in the 
sense that they were the problematic industry, and then give 
waivers for those that prove that they're compliant. That's a 
model that could potentially be used for China. Ban, you know, 
WRO equivalent against everything, and then you prove that 
you're compliant with your own isotopic testing or whatever.
    Mr. Bishop. Ms. Glas, I'll give you the last 30 seconds to 
just address any topic you want to at further length, including 
the one that's being discussed.
    Ms. Glas. I would just say we always have to be mindful of 
the loopholes we create, right? What are we trying to get at in 
terms of addressing some of these issues, and then what are the 
unintended consequences, right?
    Because nobody labels their product as a forced labor 
product into the United States. If we end up banning a 
particular product, guess what, instead of it being t-shirts, 
it's going to be an auto part. No one is labeling this is a 
direct mail shipment for Kim Glas for fentanyl.
    I mean, we have got to be mindful that people are looking 
to game the system. So what do we have to do? We have to make 
sure that we are enforcing and thinking ahead, OK, what are the 
unintended loopholes? That's what you need to ask CBP, OK? Why 
haven't you moved forward with rulemaking process to stop de 
minimus? What are you doing? Also, what's limiting you?
    Ranking Member Ivey, if there's some limitations, we'll 
support it, but at least come to us. Our industry can also be a 
resource on some of the technologies. We want to be asked. We 
want to be an active partner in this, because this trade is 
killing us.
    Mr. Bishop. My time has expired. Thank you, Ms. Glas.
    I'll yield to the Ranking Member for 5 minutes.
    Mr. Ivey. Thank you, Mr. Chairman.
    I'll pick up where you left off along the point you were 
just making. But it appears to me that there are briefing, 
quarterly briefing requirements I think by the statute so--and 
there's multiple committees that have jurisdiction over this. 
So it may be they're briefing other committees and not us or, 
you know--but that may be an opportunity for us to have more 
input from not only your industry but others. You know, the 
electronics industries that we were talking about a few minutes 
ago, I'd love to hear more from them as well.
    With respect to Withhold Release Orders, that's in the 
statute. So they have the authority to do that if I'm reading 
this correctly.
    But I did want to ask this: I've got an article here that 
talks about U.S. targets two China-based firms over forced 
labor practices. It looks like a DHS press release. But it's 
the Camel Group, a battery manufacturer, and Chenguang Biotech 
Group, a spice and extract manufacturer.
    So there's two--and this is dated August 2, 2023. So 
there's two moving forward, just gotten started. Are you 
familiar with these at all? No? OK. Well, that's fine.
    But it does go to another issue that was raised a few 
minutes ago I think, which was, why aren't they doing more of 
these? Why aren't they putting more businesses on the entity 
list? I think what I'll have to ask--and you all might not be 
the group. Maybe we've got to go back to CBP to figure it out.
    But what I'm told is one of the concerns is that it's, 
because it's a new regulatory regime, they're worried about if 
you start putting businesses on there and you start losing 
these, you create a precedent moving forward that would be 
negative. So, apparently, they're trying to set up the better 
possible cases.
    Having said that, I think--I take your point, Ms. Glas, you 
know, you need assistance now. This is a challenge that's tough 
on your industry and also on, obviously, the people, Ms. Greve, 
who are suffering at the other end of this supply line.
    I want to ask this question too before I run out of time. 
The Congo issue, Democratic Republic of Congo, and this is the 
rechargeable batteries. This is an article from NPR. It's Terry 
Gross, ``How Modern-Day Slavery in the Congo Powers the 
Rechargeable Battery Economy.''
    Mr. Bishop. Would the gentleman like to submit it for the 
record?
    Mr. Ivey. I would.
    Mr. Bishop. Without objection, so ordered.
    [The information follows:]
 How `modern-day slavery' in the Congo powers the rechargeable battery 
                                economy
February 1, 2023, 12:38 PM ET
Terry Gross
    Smartphones, computers and electric vehicles may be emblems of the 
modern world, but, says Siddharth Kara, their rechargeable batteries 
are frequently powered by cobalt mined by workers laboring in slave-
like conditions in the Democratic Republic of Congo.
    Kara, a fellow at Harvard's T.H. Chan School of Public Health and 
at the Kennedy School, has been researching modern-day slavery, human 
trafficking and child labor for two decades. He says that although the 
DRC has more cobalt reserves than the rest of the planet combined, 
there's no such thing as a ``clean'' supply chain of cobalt from the 
country. In his new book, Cobalt Red, Kara writes that much of the 
DRC's cobalt is being extracted by so-called ``artisanal'' miners--
freelance workers who do extremely dangerous labor for the equivalent 
of just a few dollars a day.
    ``You have to imagine walking around some of these mining areas and 
dialing back our clock centuries,'' Kara says. ``People are working in 
subhuman, grinding, degrading conditions. They use pickaxes, shovels, 
stretches of rebar to hack and scrounge at the earth in trenches and 
pits and tunnels to gather cobalt and feed it up the formal supply 
chain.''
    Kara says the mining industry has ravaged the landscape of the DRC. 
Millions of trees have been cut down, the air around mines is hazy with 
dust and grit, and the water has been contaminated with toxic effluents 
from the mining processing. What's more, he says, ``Cobalt is toxic to 
touch and breathe--and there are hundreds of thousands of poor 
Congolese people touching and breathing it day in and day out. Young 
mothers with babies strapped to their backs, all breathing in this 
toxic cobalt dust.''
    Cobalt is used in the manufacture of almost all lithium ion 
rechargeable batteries used in the world today. And while those outside 
of the DRC differentiate between cobalt extracted by the country's 
high-tech industrial mining companies and that which was dug by 
artisanal miners, Kara says the two are fundamentally intertwined.
    ``There's complete cross-contamination between industrial 
excavator-derived cobalt and cobalt dug by women and children with 
their bare hands,'' he says. ``Industrial mines, almost all of them, 
have artisanal miners working, digging in and around them, feeding 
cobalt into the formal supply chain.''
    Kara acknowledges the important role cobalt plays in tech devices 
and in the transition to sustainable energy sources. Rather than 
renouncing cobalt entirely, he says people should focus on fixing the 
supply chain.
    ``We shouldn't be transitioning to the use of electric vehicles at 
the cost of the people and environment of one of the most downtrodden 
and impoverished corners of the world,'' he says. ``The bottom of the 
supply chain, where almost all the world's cobalt is coming from, is a 
horror show.''
On how ``artisanal'' cobalt mines continue to operate in the DRC--
        despite being illegal
    Technically, under the law, there should not be artisanal mining 
taking place in any industrial mine. And yet, lo and behold, at most of 
the industrial mines, there is some artisanal mining taking place. In 
some cases, predominantly artisanal mining is taking place. And the 
reason is, it's a penny-wage way to boost production. I mean, imagine 
you're in a part of the world where there are millions of people who 
barely get a dollar or two a day who are grindingly poor and will 
accept almost any labor arrangement just to survive. Well, you put them 
in a tight pit, cram them with 10,000 other people and pay them a 
couple of dollars, and they'll produce thousands of tons of cobalt per 
year for almost no wages. And so that's not legal, but it's happening.
On why these conditions are on par with slavery
    ``Imagine an entire population of people who cannot survive without 
scrounging in hazardous conditions for a dollar or two a day. There is 
no alternative there. The mines have taken over everything.''--
Siddharth Kara
    Imagine an entire population of people who cannot survive without 
scrounging in hazardous conditions for a dollar or two a day. There is 
no alternative there. The mines have taken over everything. Hundreds of 
thousands of people have been displaced because their villages were 
just bulldozed over to make place for large mining concessions. So you 
have people with no alternative, no other source of income, no 
livelihood. Now, add to that the menace in many cases of armed forces 
pressuring people to dig, parents having to make a painful decision, 
``Do I send my child to school or do we eat today?'' And if they choose 
the latter, that means bringing all their kids into these toxic pits to 
dig just to earn that extra fifty cents or a dollar a day, that could 
mean the difference between eating or not. So in the 21st century, this 
is modern-day slavery. It's not chattel slavery from the 18th century 
where you can buy and trade people and own title over a person like 
property. But the level of degradation, the level of exploitation is on 
par with old-world slavery.
On the danger of collapse in artisanal mines
    ``Imagine a mountain of gravel and stone just avalanching down on 
people, crushing legs and arms, spines. I met people whose legs had 
been amputated, who had metal bars in where their legs used to be.''--
Siddharth Kara
    I spoke with many families whose children, husbands, spouses, had 
suffered horrific injuries. Oftentimes, digging in these larger open-
air pits, there are pit wall collapses. Imagine a mountain of gravel 
and stone just avalanching down on people, crushing legs and arms, 
spines. I met people whose legs had been amputated, who had metal bars 
in where their legs used to be. And then the worst of all is what 
happens in tunnel digging. There are probably 10,000 to 15,000 tunnels 
that are dug by hand by artisanal miners. None of them have supports, 
ventilation shafts, rock bolts, anything like that. And these tunnels 
collapse all the time, burying alive everyone who is down there, 
including children. It's a demise that is almost impossibly horrific to 
imagine. And yet I met mothers pounding their chests in grief, talking 
about their children who had been buried alive in a tunnel collapse. 
And these stories never get out of the Congo. People just don't know 
what's happening down there.
On the trafficking of children to work in the mines
    There's money to be made in every corner and every direction. And 
you've got these militias. Sometimes they're called commandos and they 
will abduct children, traffic children, recruit children from even 
other parts of the Congo. I met children who had come from hundreds of 
miles away and have been brought through militia networks down into the 
copper cobalt mines to dig. And as they dig and earn their dollar or 
two, that's what funds these militia groups. So children are the most 
heavily exploited of all the people down there. They're the most 
vulnerable and oftentimes trafficked and exploited in some cases in 
very violent circumstances.
On government corruption preventing change
    Corruption is a big part of the problem. That's what allows so much 
of this abuse to persist. And the thing is, imagine the Congo. It's a 
war-torn, deeply impoverished nation that has been subjected to 
generations of pillage and ransacking going all the way back, now 
centuries, to the slave trade. And so when big foreign stakeholders 
come waving around large sums of money, it's not a long stretch of the 
imagination to see that there would be corruption . . . 
    The first democratically elected president of the Congo [in 1960], 
Patrice Lumumba, made a pledge that the country's immense mineral 
riches and resources would be used for the benefit of the people who 
live there. And in short order, within 6 months, he had been deposed, 
assassinated, chopped to pieces, dissolved in acid and replaced with a 
bloody dictator, a corrupt dictator who would keep the minerals flowing 
in the right direction. So if you don't play ball with the power 
brokers at the top of the chain and with the Global North, Patrice 
Lumumba showed what's the outcome, what will happen. And I think that's 
also a part of this lesson that we need to understand historically, 
when we talk about things like corruption.
On how China came to own most of the industrial mines in the Congo
    China cornered the global cobalt market before anyone knew what was 
happening. It goes back to the year 2009 under the previous president 
in the Congo, Joseph Kabila. He signed a deal with the Chinese 
government for access to mining concessions in exchange for development 
assistance, a commitment to build roads and some public health clinics, 
schools, hospitals, things like that--and that opened the door. Before 
anyone knew what happened, Chinese companies had seized ownership of 15 
of the 19 primary industrial copper-cobalt mining concessions down 
there. So they dominate mining excavation on the ground. And not just 
that, they dominate the chain all the way through to the battery level. 
They have about 70, 80 percent of the refined cobalt market and 
probably half of the battery market.
On witnessing suffering and trauma
    There are some incidents that are just so burned into me that 
they'll come at me just like a terror, and it's hard. I just hope I've 
done justice to those stories and to the people who shared their 
tragedies with me, courageously shared these tragedies with me. I just 
want their voices [to] reach the world and then the world will decide 
what to do with the truth and the testimonies of the Congolese people. 
But if I've done some justice to bringing those voices out into the 
world that can scarcely function without the suffering of the Congolese 
people, then it's all worth it. Even the nightmares and the terrors, 
it's all worth it.
    Sam Briger and Joel Wolfram produced and edited this interview for 
broadcast.
    Bridget Bentz, Molly Seavy-Nesper and Gisele Grayson adapted it for 
the web.

    Mr. Ivey. Thank you, Mr. Chairman.
    But basically what it does is it walks through how things 
are operating in the DRC with respect to these slave-like 
conditions for cobalt reserve mines. These are artisanal 
miners, so to speak, but basically people are working with hand 
tools. They don't get protection from toxic cobalt dust, which 
is generated when you're mining it.
    As we mentioned earlier--Mr. Chairman, I think you pointed 
it out--some of the people who are doing this mining are as 
young as 6-year-olds. I think 40 percent of the people doing 
the mining are children. These are mines that are in Africa, 
but many of them are owned by China.
    There's cross-contamination, or at least that's the issue 
that's been raised with respect to cobalt that's come from 
these kinds of mines as opposed to the proper supply chain 
mines.
    My understanding is that the businesses who are using the 
cobalt products--and many of them are some of the top 
electronics companies in the world--are supposed to be keeping 
their supply chains clean, so to speak. But I'm not clear on 
whether that's working, and some of these articles are raising 
the possibility that it doesn't.
    I wanted to get a sense of--and I know you're textiles, not 
minerals. But, to the extent you have an understanding of how 
we can get the government some assistance from the private 
sector that's shipping these materials to provide not only 
transparency but some monitoring of their own so that we don't 
have to have CBP do all the heavy lifting. There's paperwork 
that would be generated.
    Then, back to the point that was made earlier, I guess by 
me. If we have I think stiffer enforcement penalties than what 
we've discussed today, it creates an incentive for these 
businesses to--if I'm understanding this right.
    So, for example, the clothes made in Vietnam that you've 
discussed, and it's company X that does the final, you know, 
sewing work and then ships them over. Well, if we find out that 
that shipment, through the testing, came from that region of 
China that's providing forced labor, what do we do about it?
    I mean, if we just have them ship it back to another 
country, and they don't get as much as they would there as they 
would in the United States, but so what, they're still making 
some money. Meanwhile, more of this material is coming through.
    So, not only is there no downside to getting caught or a 
minimal downside, they're still benefiting from all the 
materials that are coming, whether it's electronics or 
textiles.
    It seems to me that that's insufficient. That if we have to 
put in all of that work to find these and put all the testing 
and the resources and the like, when we find them, I think 
there have to be some kind of sufficient sanctions in order to 
send the message back that it's important for you to police 
your own supply lines and, you know, so that you're protecting 
your business, create an incentive for the business to do it as 
well.
    I see I've went way over my time, Mr. Chairman. I 
appreciate your indulgence.
    Mr. Bishop. Mr. Ranking Member, I appreciate you yielding 
back.
    I yield to the gentleman Mr. Ezell for 5 minutes of 
additional questioning.
    Mr. Ezell. I wish I could speak like Mr. Ivey. I'll tell 
you, it's--I could just sit here and listen to him talk, and it 
seems like the clock goes slow on him and fast on me. So 
probably--so----
    Mr. Bishop. You think fast, though, right, sir?
    Mr. Ezell. I do. Yes, I think fast. I just can't get it 
out. Anyway----
    This is a good environment today, so I was very glad to 
have a calm environment here today, and we can all go forward 
here.
    So, Mr. Mattis, we know the solar installations are 
expanding here in the United States. In my district, there are 
at least 10 completed or approved utility-scale solar projects. 
I want Mississippians to be confident these solar panels are 
not enriching the CCP and contributing to this terrible slave 
labor genocide.
    Unfortunately, we already have examples where the CBP has 
failed to stop solar companies with connections to forced labor 
in China. This again, like the shrimping issue I just discussed 
earlier, should be prevented under our current laws.
    What more can the CBP do to target foreign materials from 
China that are used in solar sales?
    Mr. Mattis. In this case, I think it's a question of simply 
recognizing that, if it's being--if it's polysilicon and it's 
coming out of the PRC, then it almost certainly should be 
subject to an enforcement action, because so much of the 
polysilicon products and processing all the way up through 
certain pieces of the solar panel and up to almost a complete 
product will have some connection to the Xinjiang Uyghur 
Autonomous Region. It is about goods that are produced wholly 
or in part or goods that use materials that come from the 
Xinjiang Uyghur Autonomous Region that should be subject to 
that--to that seizure and prevented from entering into the 
United States.
    So I think that this is one of those priority areas where, 
if you have a PRC connection, if the polysilicon is sourced 
from the PRC or other parts of it that it should be on the 
high-priority list. I would just point out that there were a 
number of industry conversations that took place that were not 
supportive, shall we say, of the Uyghur Forced Labor Prevention 
Act in the process.
    There were a handful of American solar companies, though, 
that were the ones that were among the most supportive because 
they recognize the cost that they were facing. When we look--if 
we're looking at a problem like this, you know, broadly 
speaking, about the PRC's predatory economic practices, if we 
think that there's a market-based solution for nonmarket 
problems, we're going to keep doing the wrong thing to address 
this.
    This is a little bit like preparing for a football game and 
thinking that more time in the gym and more time on the 
practice field you're going to win, when someone is coming 
along with a crowbar and going to break your knee, right? It 
doesn't matter how much you did on the other things if someone 
is going to break your knee.
    I think one of the points of the Uyghur Forced Labor 
Prevention Act and other trade actions like Withhold Release 
Orders that could be used is that this is about protecting 
sort-of the knee of American industry so that it can actually 
take the field, whether it's level or not.
    Mr. Ivey. Am I the only one that thought of Tonya Harding 
when you said that? My goodness. I apologize.
    Mr. Ezell. Thank you, Mr. Chairman. I yield back.
    Mr. Stumo. I actually would--if you wouldn't mind, I'd like 
to----
    Mr. Ezell. No, go ahead.
    Mr. Stumo [continuing]. Address that we were involved with 
this quite a bit. With solar, we've been building back U.S. 
solar quite a bit with--starting with President Trump's 
tariffs, 201 tariffs on solar, which got a lot more building 
going on, and then the Inflation Reduction Act, with its 
production tax credits last year.
    So you have both the tariff side and then the 301 tariffs 
on top of it, but then providing incentives to build here. I 
know from a lot of solar companies we have just a construction 
super cycle in solar going on here, unfortunately. So both a 
Republican initiative and a Dem initiative we supported there.
    China then tried to in this sort-of trade, which is just 
the smuggler's anarchy of transshipment and circumvention, they 
sent it through Southeast Asia. Commerce found that China was 
circumventing through Southeast Asia. The administration 
declared a climate emergency and declared a moratorium on 
tariffs through Southeast Asia for that climate emergency, 
which we disagreed with. The Congress, by a majority, voted to 
reverse that but not veto-proof.
    Right now, we've got a big--a lot of solar going on. We do 
have the Chinese with their low-value currency and their crisis 
at home that's really subsidizing and sending as much--the 
solar volume here is really big. So we have to, on one hand, 
put tariffs up and, on the other hand, subsidize. The tariffs 
can pay for the subsidies in any industry, but that's something 
we've seen that it does work.
    Mr. Ezell. Thank you.
    Mr. Chairman, I yield back.
    Mr. Bishop. The gentleman yields back.
    I want to thank all of you, all the witnesses for your 
valuable testimony.
    Thank you to the Members.
    I think this has been a very interesting and useful 
hearing, and I see lots of opportunities for bipartisan follow-
up to this hearing.
    The Members of the subcommittee may have some additional 
questions for you. We would ask the witnesses to respond to 
those in writing, if received. Pursuant to committee rule 
VII(D), the hearing record will be held open for 10 days.
    Without objection, the subcommittee stands adjourned.
    [Whereupon, at 3:33 p.m., the subcommittee was adjourned.]

                                 [all]