United States

Name of Legislation

Tariff Act of 1930

19 U.S.C. § 307 (2016)

Jurisdiction

Federal

Current Stage

In force

In 2016, the U.S. Congress closed the "consumptive demand" loophole in section 307, which exempted goods derived from forced labour where American domestic production could not meet demand.

Requirement

Prohibits importation of products produced, in whole or in part, by forced labour or convict labour

All companies are prohibited from importing products produced, in whole or in part, by forced labour or convict labour into the United States.

CBP is required to detain incoming shipments when information “reasonably but not conclusively” indicates that they contain goods that have been produced with forced labour. If further investigation confirms this initial finding, CBP is required to exclude the products from the American market and, in cases of serious violations, refer the importer to the Immigration and Customs Enforcement (ICE) for criminal investigation.

Material Scope

Forced labour, child labour, and convict labour

Personal Scope

All importers into the U.S.

Reach of the requirements

Any goods imported into the U.S.

Enforcement

Goods banned from entry into the U.S. and potential for criminal investigation

When information reasonably but not conclusively indicates that merchandise within the purview of the provision is being imported, the CBP Commissioner may issue withhold release orders pursuant to 19 C.F.R. § 12.42(e). If the Commissioner is provided with information sufficient to make a determination that the goods in question have been produced with forced labour, the Commissioner will publish a formal finding to that effect in the Customs Bulletin and in the Federal Register pursuant to 19 C.F.R. § 12.42(f). 

The CBP Commissioner is required to submit a report to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives that includes:

• The number of instances in which merchandise was denied entry during the one-year period preceding the report submission.
• A description of the merchandise denied entry.
• Other information deemed appropriate with respect to monitoring and enforcing compliance.

The forced labour provision has not been rigorously enforced due to issues of process, evidentiary standards, and capacity. However, if better enforced, the provision can be a powerful tool to encourage companies to take proactive steps to conduct due diligence of labour conditions in their supply chains and ensure that goods produced for the U.S. market are not made with forced labour.

Name of Legislation

Section 1502 of the Dodd Frank Act

Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act)

Area of Law

Company law

Jurisdiction

Federal

Current Stage

In force

The Dodd-Frank Act was passed in 2010, and the final rules implementing section 1502 by the U.S. Securities and Exchange Commission (SEC) were adopted in 2012

Requirement

Disclosure of conflict minerals due diligence results

Disclosure requirement that calls on companies to determine whether their products contain conflict minerals by carrying out supply chain due diligence.

Material Scope

Illegal commodities (conflict minerals)

Personal Scope

Public companies listed on U.S. exchanges with products that contain tantalum, tin, gold, or tungsten

Reach of the requirements

Full supply chain involving conflict minerals sourced from the Democratic Republic of Congo and surrounding areas

Enforcement

The company is required to report to the SEC under the Exchange Act. Reports are made publicly available.

The extent to which 1502 will be implemented and enforced remains uncertain following a decision of the U.S. District Court for the District of Columbia.

Name of Case

Two consolidated cases:

• Nestlé USA, Inc. v. John Doe I, et al.
• Cargill, Inc. v. Doe I

Area of Law

Tort Law

Alien Tort Statute, 28 U.S.C. § 1350. (ATS)

Jurisdiction

Current Stage

On December 1, 2020, the Supreme court of the United States heard oral arguments in the case. Audio of the arguments can be accessed here. 

Requirement/Result

Material Scope

The issues before the Court in this case were: 

(1) whether claims alleged against a domestic corporation, can overcome the general presumption against extraterritorial application of US laws, and

(2) whether the Court can impose liability on domestic corporations under the ATS.

The original cases at issue were originally brought in 2005 by a group of former child laborers from Mali against two chocolate companies - Nestlé and Cargill - for their alleged use of child slave labor in Côte d’Ivoire. The case was brought under the Alien Tort Statute (ATS), which allows foreign nationals to bring civil suits against U.S. and foreign defendants for torts committed in violation of international law.

Plaintiffs allege that Nestlé and Cargill both exert extensive control over cocoa plantations from corporate headquarters in the United States through their immense market power in the cocoa industry. Furthermore, the plaintiffs allege that the defendants provide the plantations where they were held and worked without pay with hands-on financial and technical assistance in order to profit off of cheap labor costs, despite knowing of the plantations’ reliance on child slavery. Thus, the plaintiffs claim defendants aided and abetted the forced labor and seek to hold defendants liable for this harm under the ATS.

The issues before the Court in this case were: 

(1) whether claims of aiding and abetting crimes committed abroad, alleged against a domestic corporation, can overcome the general presumption against extraterritorial application of US laws, and

(2) whether the Court can impose liability on domestic corporations under the ATS.

Pros

Name of Case

Jesner v. Arab Bank

Jesner et al. v. Arab Bank, PLC

• The plaintiffs in the underlying cases are U.S. and foreign nationals who have sued Arab Bank for its alleged role in facilitating terrorist operations that harmed them. The Supreme Court petition arises from five separate lawsuits consolidated on appeal. All the alien plaintiffs are petitioners before the Supreme Court. There are approximately 6,000 petitioners in total.
• The sole defendant in all five cases and the respondent on appeal to the Supreme Court is Arab Bank, PLC, a multinational financial corporation based in Jordan. Arab Bank is one of the largest financial institutions in the Middle East, with branches and subsidiaries in more than twenty-five countries, including New York. Its New York branch provides clearing and correspondent banking services to foreign financial institutions.

Area of Law

Tort Law

Alien Tort Statute, 28 U.S.C. § 1350. (ATS)

This case questions the scope of the ATS, and in particular whether plaintiffs can sue foreign corporations and individuals.

Jurisdiction

Current Stage

24 April, 2018: The Supreme Court held, in a 5-4 ruling, that plaintiffs cannot sue foreign corporations (as opposed to foreign individuals) for violations of international law under the ATS.

11 October, 2017: The Supreme Court heard oral arguments in the case. 

Requirement/Result

Foreign plaintiffs may no longer sue foreign corporations for international human rights violations under the ATS. 

Separation of Powers: The Court concluded that “absent further action from Congress it would be inappropriate for courts to extend ATS liability to foreign corporations.” 

Foreign Relations: Several members of the Court expressed their belief that extending ATS liability to foreign corporations without Congressional action would lead to precisely the "diplomatic strife" that the ATS was passed to prevent. 

The question of whether there is an international norm of corporate liability under currently prevailing international law remains open.  

Material Scope

The issue before the Court was whether corporations can be sued for human rights violations under the ATS. 

Arab Bank, PLC, a Jordan-based bank, was sued by several thousand victims of terrorist attacks overseas between 2004 and 2010 under the Alien Torts Statute (ATS), arguing that the bank’s New York branch helped finance terrorist activities in the Middle East that had harmed the plaintiffs, who were not U.S. citizens. 

The plaintiffs allege that over the past two decades, four prominent Palestinian terrorist organization have conducted widespread murderous attacks, including suicide bombings, against citizens of Israel, mostly Jews. The terrorist organizations allegedly arranged these attacks in part by promising, and later delivering, financial payments to the relatives of “martyrs” who were killed – along with those who were injured or captured – while perpetrating the attacks.

The plaintiffs assert that the terrorist organizations funded these attacks in two ways. The organizations solicited public and private donations directly and deposited them in bank accounts throughout the Middle East. The organizations also raised funds through affiliated, purportedly charitable proxy organizations. These organizations allegedly set up their own bank accounts at various banks in Saudi Arabia in order to hold funds collected for the families of “martyrs.”

According to the amended complaint, Arab Bank deliberately helped the terrorist organizations and their proxies to raise funds for attacks and make payments to the families of “martyrs.” The plaintiffs further allege that Arab Bank used some of those facilities, the New York branch among them, to support the terrorist organizations in three ways.

First, Arab Bank allegedly maintained accounts that the terrorist organizations used to solicit funds directly. Second, Arab Bank allegedly maintained accounts that proxy organizations and individuals used to raise funds for the terrorist organizations. Third, Arab Bank allegedly played an active role in identifying the families of “martyrs” and facilitating payments to them on behalf of the terrorist organizations. The plaintiffs allege that Arab Bank’s involvement with the terrorist organizations incentivized and encouraged suicide bombings and other murderous acts that harmed the plaintiffs.

Pros

Severely narrows the scope of ATS litigation in the following ways: 

1) Foreign corporations can no longer be sued for violations of international law under the ATS; 

2) The arguments laid out in the majority opinion widely apply to corporations - both foreign and domestic - raising concerns that the next ATS to be taken up at the Supreme Court will set the Court up to foreclose the use of the ATS to hold corporations liable for human rights abuses they commit or are involved in; 

3) The Court attempted to put the onus on the US Congress to pass new legislation that will allow victims of overseas human rights violations to bring suits in US courts against corporations.

Name of Case

Estate of Arturo Giron Alvarez, The 773 Individuals Identified On Exhibit 1 To The Complaint and Unknown Use Plaintiffs, Plaintiffs

v. The Johns Hopkins University, The Johns Hopkins University School Of Medicine, The Johns Hopkins Hospital, The Johns Hopkins Bloomberg School Of Public Health, The Johns Hopkins Health Systems Corporation, The Rockefeller Foundation, and Bristol-Myers Squibb Company, Defendants

Area of Law

Tort Law

Alien Tort Statute, 28 U.S.C. § 1350. (ATS)

This case concerns a 1940s U.S. government experiment that infected hundreds of Guatemalan people with syphilis as part of a nonconsensual and involuntary experiment regarding the effectiveness of penicillin, a new drug at the time.

The case Garcia v. Sebellius was originally brought against the U.S. government in 2011, but resulted in a court finding absolute immunity for officials’ acts taken within the parameters of their employment. Alvarez is the civil case that follows.

At issue is whether, following the U.S. Supreme Court’s 2018 Jesner v. Arab Bank decision, U.S. domestic corporations may be held liable under the Alien Tort Statute for international law violations perpetrated against non-U.S. citizens. In the present case, the violations alleged relate to nonconsensual medical experimentation on Guatemalan nationals during the 1940s and 50s.

Jurisdiction

Current Stage

3 Jan 2019: Defendants’ motion to dismiss is denied, ATS claims survive, case will continue to discovery.

The court held that Jesner “does not bar ATS suits against domestic corporations.” The court also upheld its ruling in Alvarez I “that there is an international law norm barring nonconsensual medical experimentation on human subjects.”

Requirement/Result

Material Scope

Second Amended Complaint: Violations of the law of nations, including crimes against humanity; aiding and abetting crimes against humanity; conspiring to commit crimes against humanity; cruel, inhumane, and degrading treatment; aiding and abetting and conspiracy to commit cruel, inhumane, and degrading treatment; involuntary and nonconsensual medical experimentation on humans; and aiding and abetting and conspiracy to commit involuntary and nonconsensual medical experimentation on humans.

Third Amended Complaint: claims were compiled into one ATS claim. The court did not address the above actions separately.

Pros