US bans China sweetener products, claiming breach of forced labor law

Owen Churchill in United States, South China Morning Post

Posted at Oct 21 2020 08:49 PM

The United States says it has “conclusive evidence” that a Chinese company in Inner Mongolia used forced labour to produce extracts of a popular sugar substitute and has instructed US ports to seize shipments and begin forfeiture proceedings.

US Customs and Border Protection (CBP) did not make any evidence public but said on Tuesday it had determined that Inner Mongolia Hengzheng Group Baoanzhao Agriculture, Industry and Trade had used “convict, forced or indentured labour” to produce stevia extracts and derivatives.

Stevia is a zero-calorie, natural sugar substitute used in a number of popular products, including soft drinks like Coca-Cola. China is the world’s largest manufacturer of stevia products, according to market analytics firm QYResearch.

In a statement, CBP said it was first alerted to Baoanzhao several years ago, following allegations by an unnamed NGO which led to a temporary import ban in May 2016 on the basis of “reasonable but inconclusive evidence” of forced labour in its supply chain.

The determination of “conclusive evidence” of forced labour marked the first time the agency had reached such a finding since 1996, it said.

According to Chinese commercial database Tianyancha, Baoanzhao is owned by Inner Mongolia Hengzheng Industrial Group, a wholly state-owned enterprise. Official financial records from 2017 listed on the Inner Mongolia autonomous region’s government website indicate the Hengzheng Industrial Group operates under the jurisdiction of the Inner Mongolian prisons administration.

CBP did not immediately respond to a request for comment on the specific nature of the evidence implicating Baoanzhao but an agency spokesman referred inquiries to a notice filed in the federal register on Tuesday. This said an investigation had found “sufficient evidence” to support the finding that Baoanzhao was in fact a “prison/forced labour facility” and that its stevia extract products were being imported into the US.

Brenda Smith, an executive assistant commissioner in CBP’s trade office, said the finding was a warning to US importers who failed to eliminate forced labour from their supply chains that shipments could be subject to seizure and forfeiture.

“We hope this action encourages importers to take a close look at their supply chains to ensure that they meet the humane and ethical standards of the United States government,” she said.

At least one US importer was hit with fines for allegedly breaching CBP’s temporary import ban against Baoanzhao in 2016. Pure Circle USA agreed to pay US$575,000 in a settlement reached in August.

The Chinese embassy in Washington did not respond to a request for comment. Officials in Beijing have ardently and repeatedly denied the existence of state-sanctioned forced labour in other parts of the country, notably the Xinjiang Uygur autonomous region.

CBP has issued a flurry of import bans in recent months on various companies based in Xinjiang, citing forced labour concerns. Beyond targeted import bans, the Chinese government’s treatment of Uygurs and other ethnic minority groups there has also prompted financial sanctions against Chinese officials and several legislative efforts to block imports from the region entirely.