Report text available as:

  • TXT
  • PDF   (PDF provides a complete and accurate display of this text.) Tip ?
105th Congress                                            Rept. 105-366
                        HOUSE OF REPRESENTATIVES

 1st Session                                                     Part 1
_______________________________________________________________________


 
         MONITORING OF PRODUCTS THAT ARE MADE WITH FORCED LABOR
_______________________________________________________________________


October 31, 1997.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Archer, from the Committee on Ways and Means, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 2195]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Ways and Means, to whom was referred the 
bill (H.R. 2195) to provide for certain measures to increase 
monitoring of products of the People's Republic of China that 
are made with forced labor, having considered the same, report 
favorably thereon with amendments and recommend that the bill 
as amended do pass.

                                CONTENTS

                                                                   Page
 I. Introduction......................................................2
        A. Purpose and Summary...................................     2
        B. Background and Need for Legislation...................     3
        C. Legislative History...................................     3
II. Explanation of Provision..........................................4
III.Vote of the Committee.............................................7

IV. Budget Effects....................................................7
        A. Committee Estimates of Budgetary Effects..............     7
        B. GStatement Regarding New Budget Authority and Tax 
          Expenditures...........................................     7
        C. Cost Estimate Prepared by the Congressional Budget 
          Office.................................................     7
 V. Other Matters to be Discussed Under the Rules of the House........8
        A. Committee Oversight Findings and Recommendations......     8
        B. GSummary of Findings and Recommendations of the 
          Committee on Government Reform and Oversight...........     8
        C. Constitutional Authority Statement....................     8
VI. Letter from Committee on International Relations..................9

    The amendments are as follows:
    Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. FINDINGS.

    The Congress makes the following findings:
          (1) The United States Customs Service has identified goods, 
        wares, articles, and merchandise mined, produced, or 
        manufactured under conditions of convict labor, forced labor, 
        and indentured labor in several countries.
          (2) The United States Customs Service has actively pursued 
        attempts to import products made with forced labor, resulting 
        in seizures, detention orders, fines, and criminal 
        prosecutions.
          (3) The United States Customs Service has taken 21 formal 
        administrative actions in the form of detention orders against 
        different products destined for the United States market, found 
        to have been made with forced labor, including products from 
        the People's Republic of China.
          (4) The United States Customs Service does not currently have 
        the tools to obtain the timely and in-depth verification 
        necessary to identify and interdict products made with forced 
        labor that are destined for the United States market.

SEC. 2. AUTHORIZATION FOR ADDITIONAL CUSTOMS PERSONNEL TO MONITOR THE 
                    IMPORTATION OF PRODUCTS MADE WITH FORCED LABOR.

    There are authorized to be appropriated for monitoring by the 
United States Customs Service of the importation into the United States 
of products made with forced labor, the importation of which violates 
section 307 of the Tariff Act of 1930 or section 1761 of title 18, 
United States Code, $2,000,000 for fiscal year 1999.

SEC. 3. REPORTING REQUIREMENT ON FORCED LABOR PRODUCTS DESTINED FOR THE 
                    UNITED STATES MARKET.

    (a) Report to Congress.--Not later than 1 year after the date of 
the enactment of this Act, the Commissioner of Customs shall prepare 
and transmit to the Congress a report on products made with forced 
labor that are destined for the United States market.
    (b) Contents of Report.--The report under subsection (a) shall 
include information concerning the following:
          (1) The extent of the use of forced labor in manufacturing 
        products destined for the United States market.
          (2) The volume of products made with forced labor, destined 
        for the United States market, that is in violation of section 
        307 of the Tariff Act of 1930 or section 1761 of the title 18, 
        United States Code, and is seized by the United States Customs 
        Service.
          (3) The progress of the United States Customs Service in 
        identifying and interdicting products made with forced labor 
        that are destined for the United States market.

SEC. 4. RENEGOTIATING MEMORANDA OF UNDERSTANDING ON FORCED LABOR.

    It is the sense of the Congress that the President should determine 
whether any country with which the United States has a memorandum of 
understanding with respect to reciprocal trade which involves goods 
made with forced labor is frustrating implementation of the memorandum. 
Should an affirmative determination be made, the President should 
immediately commence negotiations to replace the current memorandum of 
understanding with one providing for effective procedures for the 
monitoring of forced labor, including improved procedures to request 
investigations of suspected prison labor facilities by international 
monitors.

SEC. 5. DEFINITION OF FORCED LABOR.

    As used in this Act, the term ``forced labor'' means convict labor, 
forced labor, or indentured labor, as such terms are used in section 
307 of the Tariff Act of 1930.

    Amend the title so as to read:

    A bill to provide for certain measures to increase monitoring of 
products that are made with forced labor.

                             I. INTRODUCTION

                         A. PURPOSE AND SUMMARY

    H.R. 2195, as amended, would provide certain measures to 
increase the ability of the U.S. Customs Service (Customs) to 
identify, monitor, and interdict products made with forced 
labor that are destined for the United States market. First, 
the legislation would outline four findings relating to Customs 
resources, efforts, and successes in interdicting products made 
with forced labor that are destined for the U.S. market. 
Second, the legislation would authorize $2 million of 
appropriations for fiscal year 1999 for Customs to monitor and 
interdict products made with forced labor that are destined for 
the U.S. market. Third, the legislation would require Customs 
to report, one year after the date of enactment, on the 
following: the extent of the use of forced labor in products 
destined for the U.S. market; the volume of products made with 
forced labor destined for the U.S. market; and, the progress of 
Customs in identifying and interdicting products made with 
forced labor destined for the U.S. market. Fourth, the 
legislation would outline the sense of the Congress that the 
President should determine whether any country with whom the 
U.S. has a memorandum of understanding (MOU) on forced labor is 
frustrating implementation of the MOU. Should an affirmative 
determination be made, it is the further sense of the Congress 
that the President should renegotiate a new MOU with new 
procedures for identifying forced labor products, including 
improved procedures to request investigations of suspected 
prison labor facilities by international monitors. Lastly, the 
legislation would clarify that the term ``forced labor'' as 
used in this Act means convict labor, forced labor, and 
indentured labor as used in section 307 of the Tariff Act of 
1930, and does not expand the meaning of those terms.

                 B. BACKGROUND AND NEED FOR LEGISLATION

    The Committee on Ways and Means has historically used the 
budget authorization process to provide Customs with policy 
direction as its plans it budget, as well as guidance from the 
Committee for the appropriations process. The statutory basis 
for the authorization of appropriations for Customs is section 
301(b) of the Customs Procedural Reform and Simplification Act 
of 1978 (19 U.S.C. 2075(b)). The most recent authorization of 
appropriations for Customs was included in the Customs and 
Trade Act of 1990 [P.L. 101-382]. These authorizations expired 
at the end of fiscal year (FY) 1992. H.R. 2195, as amended, 
would provide an additional $2 million authorization of 
appropriations for FY 1999 for Customs to identify, monitor, 
and interdict products made with forced labor that are destined 
for the U.S. market.

                         C. LEGISLATIVE HISTORY

Committee bill

    H.R. 2195, was introduced by Mr. Smith of New Jersey, on 
July 17, 1997, and was referred to the Committee on Ways and 
Means and, in addition, to the Committee on International 
Relations.
    The Committee on Ways and Means met to consider H.R. 2195, 
on October 1, 1997. The Committee ordered the bill favorably 
reported, with an amendment in nature of a substitute by 
Chairman Archer, by voice vote, with a quorum present.
    The Committee previously considered related legislation. On 
March 13, 1997, the Subcommittee on Trade of the Committee on 
Ways and Means met to consider a draft bill to authorize 
appropriations for fiscal years (FY) 1998 and 1999 for the U.S. 
Customs Service (Customs), the Office of the U.S. Trade 
Representative (USTR), and the U.S. International Trade 
Commission (ITC) and ordered the draft bill to be favorably 
reported by voice vote, without amendment with a quorum 
present.
    The Subcommittee reported bill was introduced as H.R. 1463 
by Mr. Crane of Illinois, Chairman of the Subcommittee on 
Trade, Committee on Ways and Means, on April 28, 1997, and was 
subsequently referred to the Committee on Ways and Means. The 
Committee on Ways and Means met to consider H.R. 1463 on April 
30, 1997, and ordered it favorably reported, as amended, by 
voice vote, with a quorum present. On May 6, 1997, H.R. 1463 
passed the House of Representatives. No further action has been 
taken in the Senate.

Legislative hearing

    The Subcommittee on Trade of the Committee on Ways and 
Means held a public hearing on March 11, 1997 on budget 
authorizations for FY 1998 and FY 1999 for Customs, the Office 
of the U.S. Trade Representative, and the U.S. International 
Trade Commission. Representatives from Customs testified as 
well as private sector witnesses.

                      II. EXPLANATION OF PROVISIONS

                          A. FINDINGS (SEC. 1)

Present law

    There is currently no findings provision in the law 
relating to Customs' activities in identifying and interdicting 
products made with forced labor.

Explanation of provision

    Sec. 1 outlines four findings relating to Customs 
resources, efforts, and successes in identifying and 
interdicting products made with forced labor destined for the 
U.S. market.

 Reasons for change

    The findings would clarify the Committee's policy 
objectives with regard to authorizing appropriations for FY 
1999 for Customs to increase monitoring of products made with 
forced labor destined for the U.S. market.

Effective date

    The provision would be effective upon enactment.

   B. AUTHORIZATION FOR ADDITIONAL CUSTOMS PERSONNEL TO MONITOR THE 
         IMPORTATION OF PRODUCTS MADE WITH FORCED LABOR (SEC 2)

Present law

    The statutory basis for the authorizations of 
appropriations for Customs is section 301(b) of the Customs 
Procedural Reform and Simplification Act of 1978 (19 U.S.C. 
2075(b)). The most recent authorization of appropriations for 
Customs was included in the Customs and Trade Act of 1990 [P.L. 
101-382]. These authorizations expired at the end of FY 1992. 
Appropriations for Customs for FY 1997 were included in P.L. 
104-208, making omnibus consolidated appropriations for the 
fiscal year ending September 30, 1997.
    Section 2 would authorize $2 million of appropriations for 
FY 1999 for monitoring by Customs of the importation into the 
United States of products made with forced labor, the 
importation of which violates section 307 of the Tariff Act of 
1930 (19 U.S.C. 1307) or section 1761, United States Code (18 
U.S.C. 1761) relating to crimes and criminal procedures for the 
transportation or importation of prison-made goods.

Reasons for change

    The Committee has historically supported Customs' efforts 
in identifying and interdicting merchandise made under 
conditions of forced labor. Customs has in place teams of 
agents and inspectors on our borders, as well as attaches in 
our embassies abroad working actively to prevent products made 
with forced labor from entering the U.S. market. These 
activities have resulted in specific formal administrative 
actions, as well as detention orders, seizures, fines, and 
criminal proceedings. H.R. 2195, as amended, would authorize 
additional resources for Customs to investigate and obtain the 
verification necessary to identify and interdict products made 
with forced labor. The Committee feels that these resources are 
necessary to support a more effective policy for Customs' 
enforcement of provisions relating to forced labor in existing 
statutes.

Effective date

    The provision would be effective upon enactment.

  C. REPORTING REQUIREMENT ON FORCED LABOR PRODUCTS DESTINED FOR THE 
                     UNITED STATES MARKET (SEC. 3)

Present law

    Customs currently has no specific statutory Congressional 
reporting requirements concerning its activities in enforcing 
the law with regard to products made with forced labor destined 
for the U.S. market.

Explanation of provision

    Section 3 would require that, not later than one year after 
the date of enactment, the Commissioner of Customs transmits to 
Congress a report on products made with forced labor that are 
destined for the U.S. market. The report would contain 
information including: the extent of the use of forced labor in 
manufacturing products destined for the U.S. market; the volume 
of such imports seized by Customs under section 307 of the 
Tariff Act of 1930 or section 1761 of title 18, United States 
Code; and, Customs' progress in identifying and interdicting 
products made with forced labor that are destined for the U.S. 
market.

Reason for change

    The reporting requirements would provide the Committee with 
information in the future for evaluating Customs' use of the 
resources authorized by this bill.

Effective date

    The provision would be effective upon enactment.

  D. RENEGOTIATING MEMORANDA OF UNDERSTANDING ON FORCED LABOR (SEC. 4)

Present law

    No provision.

Explanation of provision

    Section 4 of H.R. 2195, as amended, would outline the sense 
of the Congress that the President should determine whether any 
country with which the U.S. has a memorandum of understanding 
(MOU) with respect to reciprocal trade involving goods made 
with forced labor is frustrating implementation of the MOU. 
Should an affirmative determination be made, it would be the 
sense of the Congress that the President should immediately 
begin negotiations to replace the current MOU with one 
providing for effective procedures for monitoring products made 
with forced labor, including improved procedures to request 
investigations of suspected prison labor facilities by 
international monitors.

Reason for change

    The Committee feels that the President should undertake a 
determination as to whether any country with which the U.S. has 
an MOU with respect to trade in forced labor products is 
implementing the terms of the MOU. The Committee also feels 
that, should a determination be made that a country is 
frustrating the implementation of the MOU, the President 
shouldrenegotiate that MOU to improve procedures for monitoring forced 
labor products and requesting investigations of suspected prison labor 
facilities by international monitors.

Effective date

    The provision would be effective upon enactment.

                 E. DEFINITION OF FORCED LABOR (SEC. 5)

Present law

    Section 307 of the Tariff Act of 1930 prohibits the 
importation of all goods, wares, articles, and merchandise 
mined, produced or manufactured wholly or in part in any 
foreign country by convict labor or/and forced labor or/and 
indentured labor under penal sanctions. The provision does not 
apply to goods, wares, articles, or merchandise so mined, 
produced, or manufactured which are not mined, produced or 
manufactured in such quantities in the United States as to meet 
the consumptive demands of the United States. ``Forced labor'' 
is specifically defined in the statute to mean all work or 
service which is exacted from any person under the menace of 
any penalty for its nonperformance and for which the worker 
does not offer himself voluntarily.

Explanation of provision

    Section 5 would clarify that the term ``forced labor'' as 
used in this Act means convict labor, forced labor, and 
indentured labor as used in section 307 of the Tariff Act of 
1930, and does not amend the terms or definitions used in that 
section.

Reason for change

    The Committee feels that this clarification is necessary to 
ensure that H.R. 2195, as amended, would not be construed as 
changing the meaning of the terms and definitions used in 
section 307 of the Tariff Act of 1930, and is coextensive with 
the coverage of that Act.

Effective date

    The provision would be effective upon enactment.

                       III. VOTE OF THE COMMITTEE

    In compliance with clause 2(l)(2)(B) of the Rules of the 
House of Representatives, the following statement is made 
concerning the votes of the Committee in its consideration of 
the bill H.R. 2195, as amended.

Motion to report the bill

    The bill H.R. 2195 was ordered favorably reported, as 
amended, by voice vote on October 1, 1997, with a quorum 
present.

                           IV. BUDGET EFFECTS

               A. COMMITTEE ESTIMATE ON BUDGETARY EFFECTS

    In compliance with clause 7(a) of rule XIII of the Rules of 
the House of Representatives, the following statement is made 
concerning the effects on the budget of H.R. 2195, as amended. 
The Committee agrees with the estimate prepared by the 
Congressional Budget Office, which is included below.

    B. STATEMENT REGARDING NEW BUDGET AUTHORITY AND TAX EXPENDITURES

    In compliance with subdivision (B) of clause 2(l)(3) of 
rule XI of the Rules of the House of Representatives, the 
Committee states that the provisions of H.R. 2195, as amended, 
do not involve any increase or decrease in revenues or tax 
expenditures, and authorizes an additional $2 million to the 
United States Customs Service, subject to apporpriation.

      C. COST ESTIMATE PREPARED BY THE CONGRESSIONAL BUDGET OFFICE

    In compliance with subdivision (C) of clause 2(l)(3) of 
rule XI of the Rules of the House of Representatives, requiring 
a cost estimate prepared by the Congressional Budget Office, 
the following report prepared by CBO is provided:

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, October 3, 1997.
Hon. Bill Archer,
Chairman, Committee on Ways and Means,
Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2195, a bill to 
provide for certain measures to increase monitoring of products 
that are made with forced labor.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Mark 
Grabowicz.
            Sincerely,
                                         June E. O'Neill, Director.

     V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE

          A. COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

    With respect to subdivision (A) of clause 2(l)(3) of rule 
XI of the Rules of the House of Representatives (relating to 
oversight findings), the Committee advises that it was as a 
result of the Committee's oversight activities concerning the 
budget authorizations for Customs, that the Committee concluded 
that it is appropriate to enact the provisions contained in the 
bill.

    B. SUMMARY OF FINDINGS AND RECOMMENDATIONS OF THE COMMITTEE ON 
                    GOVERNMENT REFORM AND OVERSIGHT

    With respect to subdivision (D) of clause 2(l)(3) of rule 
XI of the Rules of the House of Representatives (relating to 
oversight findings), the Committee advises that no oversight 
findings or recommendations have been submitted to this 
Committee by the Committee on Government Reform and Oversight 
with respect to the provisions contained in this bill.

                 C. CONSTITUTIONAL AUTHORITY STATEMENT

H.R. 2195--A bill to provide for certain measures to increase 
        monitoring of products that are made with forced labor

    Summary: H.R. 2195 would authorize the appropriation of $2 
million for fiscal year 1999 for the United States Customs 
Service to monitor the importation of products made with forced 
labor. The bill also would require the Customs Service to 
prepare a report on products made with forced labor that are 
destined for the U.S. market.
    Assuming appropriation of the authorized amount, CBO 
estimates that implementing H.R. 2195 would result in 
additional discretionary spending of $2 million over fiscal 
years 1999 and 2000. This legislation would not affect direct 
spending and receipts, so pay-as-you-go procedures would not 
apply. The bill contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act of 1995 
(UMRA) and would impose no costs on the budgets of state, 
local, or tribal governments.
    Estimated cost to the Federal Government: For the purposes 
of this estimate, CBO assumes that the amount authorized in 
H.R. 2195 would be appropriated by the start of fiscal year 
1999 and that estimated outlays would follow the historical 
spending pattern for the authorized activities. We estimate 
that completing the report required by the bill would have no 
significant cost. The estimated budgetary impact of H.R. 2195 
is shown in the following table.

                                    [By fiscal year, in millions of dollars]                                    
----------------------------------------------------------------------------------------------------------------
                                                                       1998     1999     2000     2001     2002 
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION                                       
Authorization level................................................  .......      2.0  .......  .......  .......
Estimated outlays..................................................  .......      1.8      0.2  .......  .......
----------------------------------------------------------------------------------------------------------------

    The costs of this legislation fall within budget function 
750 (administration of justice).
    Pay-as-you-go considerations: None.
    Intergovernmental and private-sector impact: H.R. 2195 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments.
    Estimate prepared by: Mark Grabowicz.
    Estimate approved by: Paul N. Van de Water, Assistant 
Director for Budget Analysis.
    With respect to clause 2(l)(4) of rule XI of the Rules of 
the House of Representatives, relating to Constitutional 
Authority, the Committee states that the Committee's action in 
reporting the bill is derived from Article 1 of the 
Constitution, Section 8 (``The Congress shall have power to lay 
and collect taxes, duties, imposts and excises, to pay the 
debts and to provide for * * * the general Welfare of the 
United States * * *).

          VI. LETTER FROM COMMITTEE ON INTERNATIONAL RELATIONS

                     U.S. House of Representatives,
                      Committee on International Relations,
                                Washington, DC, September 30, 1997.
Hon. Bill Archer,
Chairman, Committee on Ways and Means,
Washington, DC.
    Dear Mr. Chairman: I write with respect to tomorrow's 
scheduled mark up by the Committee on Ways and Means of H.R. 
2195, the Laogai Slave Labor Products Act of 1997.
    The amendment in the nature of a substitute to be 
considered by your Committee makes modifications to the 
provisions included in the introduced version of H.R. 2195 
which are within the exclusive jurisdiction of the Committee on 
International Relations. I have agreed to those modifications, 
however, and accordingly do not object to the Committee on Ways 
and Means proceeding with consideration of an amendment in the 
nature of a substitute.
    My agreement to the consideration by your Committee of 
these modification is, of course, without prejudice to the 
jurisdiction of this Committee as set forth in Rule X of the 
Rules of the House of Representatives.
    I appreciated your assistance in this matter and look 
forward to working with you in the Committee on Rules and on 
the House floor to pass legislation regarding China.
    With best wishes,
            Sincerely,
                                      Benjamin A. Gilman, Chairman.