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Trade Facilitation & Enforcement Act Highlights Significant Supply Chain Risks

After our blog regarding Traceability yesterday, I was alerted to the National Coffee Association who have highlighted the Trade Facilitation and Enforcement Act as a significant supply chain risk for the Coffee Industry and calls it ‘uncharted territory’ for importers.

U.S. Customs and Border Protection (CBP) recently detained the first shipment tied to forced labor since 2001, the result of recent legislation that tightened the nationwide ban on imports made with forced labor.

The seizure signifies new standards for businesses’ labor practices abroad, increasing the pressure on U.S. companies to enforce compliance across their global supply chains.

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How will this impact the coffee market?

– The Trade Facilitation and Trade Enforcement Act of 2015 shuts down an exception for goods where domestic production cannot meet consumer demand.

– Since U.S. coffee production satisfies a mere fraction of demand, the exception has insulated coffee since the forced labor ban was first enacted in 1930.

– Now, without the exception, the scope and extent of enforcement is uncharted territory for importers. This is particularly true where, like coffee, supply chains are long and complex.

– Since the law also requires the CBP to report enforcement to Congress in September, industries can expect heightened enforcement, including civil and criminal penalties, over the next few months.

Source – Managing a New Supply Chain Risk: The Trade Facilitation and Enforcement Act