The United States has seized low-calorie sweetener stevia imported from China by PureCircle, making it the latest company to be targeted by a new law that bans imports of products made by forced labor.
U.S. Customs and Border Protection said it moved to crack down on imports of stevia extracts and their derivatives from China brought into the country by PureCircle after it obtained information that they are produced by convict labor.
The plant extract is used as a sweetener in Coca-Cola’s Coke Life (COKE), PepsiCo’s True (PEP) and other popular sodas.
A spokeswoman for PureCircle disputed the allegation, stating the company has provided documentation it has not worked with Inner Mongolia Hengzheng Group Baoanzhao Agricultural and Trade, which was also named in the complaint.
“We have an explicit policy prohibiting use of prison or forced labor in any part of our business,” she said in an emailed statement, noting it is certified by independent auditors to ensure that.
Singapore-based Olam International owns a 17.8% stake in PureCircle, a major supplier of sugar and aspartame alternatives, according to PureCircle’s website. The companies have three months to prove the stevia was not produced by force labor, a spokeswoman for the U.S. agency said on Wednesday.
“It is imperative that companies examine their supply chains to understand product sourcing and the labor used to generate their products,” the agency Commissioner R. Gil Kerlikowske said in a statement.
Responding to the news, Coke said its supplier had confirmed it had not received stevia produced by the accused Inner Mongolia company. Company policy prohibits the use of forced labor in its operations and supply chain, Coke said in an email.
The action is the latest sign that the new legislation, which bans imports of goods made by forced labor, could have a far-reaching impact on companies that buy ingredients from abroad as the United States pushes to improve transparency across global supply chains. The Trade Facilitation and Trade Enforcement Act of 2015 was signed into law in February.
This is the third product seizure since the law came into effect.
Imports of potassium and other related products brought in by Tangshan Sunfar Silicon Industries have been impounded and shipments of soda ash and other chemicals by Tangshan Sanyou Group and its subsidiaries have been seized.