By Hung Ou Yang
On September 24, 2025, the U.S. Customs and Border Protection ("CBP") issued a Withhold Release Order (WRO) against Giant Manufacturing Co., Ltd. ("Giant"), prohibiting the importation of bicycles and related components produced in Taiwan by Giant into the United States. Any such goods arriving at U.S. ports will be detained. The WRO was issued under 19 U.S.C. §1307, which bans the importation of goods produced in whole or in part with forced labor, and it takes effect immediately absent a court order. In other words, the CBP only needs to determine that there is reasonable doubt, based on sufficient evidence, of forced labor for a WRO to be issued.
The issuance of this WRO against Giant — a world-renowned Taiwan bicycle manufacturer — serves as a wake-up call for Taiwanese enterprises. It highlights the need for Taiwan's companies to comprehensively review their treatment of migrant workers, and for the Taiwan's government to proactively address potential deficiencies in the current regulatory framework to meet the growing global emphasis on labor rights.
Indicators of Forced Labor
CBP indicated that its investigation of Giant was based on the International Labour Organization ("ILO") indicators of forced labor. The alleged labor issues at Giant included abuse of vulnerability, harsh working and living conditions, debt bondage (work in repayment of debt), wage withholding, and excessive overtime.
According to the ILO, there are eleven indicators of forced labor, including deception, restriction of movement, isolation, physical and sexual violence, intimidation and threats, and retention of identity documents. When several of these indicators concurrently appear, it will be sufficient to establish a high likelihood of forced labor, allowing CBP to issue a WRO to prevent goods linked to human rights abuses from entering the U.S. market.
Divergence Between International Norms and Taiwan's Legal Framework
Under the ILO's Fair Recruitment Principles, workers or job seekers shall not bear any recruitment fees or related costs. Such expenses must be fully borne by the employer, including placement and administrative fees, in order to prevent workers from falling into debt bondage. The definition of recruitment-related fees under ILO standards is very broad and inclusive.
Here, Article 40(5) of Taiwan's Employment Service Act provides that "private employment service agencies and their employees shall not demand, agree to, or receive any payment or other improper benefit beyond the prescribed standards." This provision prohibits Taiwanese agencies from charging migrant workers recruitment fees, allowing only employer-side placement fees. Violators face fines of 10 to 20 times the unlawful gain, suspension of business for up to one year, and inspections by the Ministry of Labor through regular or special audits.
While Taiwan's legal framework appears consistent with international norms, in practice, migrant workers in their countries of origin often will have to pay recruitment fees to local brokers — an area beyond the reach of Taiwanese law. The Taiwanese authorities can only suggest signing bilateral agreements, recommending that such fees be capped at one month's wages. Whether this arrangement satisfies the ILO's fair recruitment principle—and effectively prevents debt bondage—remains questionable.
Giant, recognizing these international expectations, announced in early 2025 a policy to fully cover all recruitment-related fees, including brokerage and government charges, for newly hired migrant workers, signaling its awareness of the fair recruitment issue. However, it might not be sufficient in terms of satisying ILO's standards if the existing migrant workers hired before 2025 are not covered under the new policy.
CBP's WRO Exposed the Risks Taiwan's Enterprises Are Facing
In February 2025, investigative journalist Peter Bengtsen published a report revealing widespread issues within Taiwan's bicycle industry, including excessive recruitment fees paid by migrant workers, poor working conditions, and inadequate accommodation facilities. Bengtsen's subsequent report even pointed out that Taiwan's automotive parts and electronics industries are also involved with the same issues.
According to Bengtsen, Giant actually was not the first Taiwan's company to be investigated by CBP, but the third, suggesting that other Taiwan companies are facing similar investigations and the WRO risks. Bengtsen's most recent report issued in March 2025, calling for SPEED UP! ADDRESSING FORCED LABOR RISKS, clearly identified multiple publicly listed Taiwan companies who have forced labor issues: Chin Poon Industrial, Shinkong Synthetic Fibers Corporation, U.D. Electronic Corp, Merida, Maxxis, Iron Force Industrial, Pegavision, Topview, Axiomtek, among others, and even the Taoyuan International Airport is being pointed a finger at for this serious issue.
US Importers Shall Conduct Due Diligence Check on Taiwan's Supply Chains
As CBP has emphasized, "U.S. importers bear the responsibility of conducting due diligence on their supply chains to ensure compliance with ILO labor standards". Therefore, U.S. importers shall conduct due diligence check on Taiwan's suppliers for the forced labor issues as soon as possible, preferably engaging qualified local law firms to examine whether their labor and human rights practices needs to be substantially improved. For Taiwan's enterprises, it should be noted that mere compliances with Taiwan's domestic labor laws will no longer be sufficient. Taiwan's enterprises are supposed to move beyond Taiwan's local legal framework, and align themselves with international human rights and fair recruitment standards to maintain access to the U.S. markets.
AUTHOR: Hung Ou Yang
Managing Partner
Taipei
+886-2-2707-9976
[email protected]
Copyright: Brain Trust International Law Firm
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
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