Introduction

The Uyghur Forced Labor Protection Act (UFLPA) applies to all merchandise imported into the United States on or after June 22, 2022. The UFLPA establishes a rebuttable presumption that goods mined, produced, or manufactured wholly or in part in the Xinjiang Uyghur Autonomous Region (Xinjiang), or by an entity on the UFLPA Entity List are prohibited from U.S. importation under 19 U.S.C. § 1307. If an importer believes imported items fall outside the scope of UFLPA, the importer may provide information to CBP demonstrating that the imported goods and their inputs have no connection to Xinjiang or to entities on the UFLPA Entity List. If CBP determines that the importer’s supply chain lacks such connections, CBP will release the shipments without the importer having to obtain an exception to the presumption. For imported goods and inputs that are connected to Xinxiang, an importer must demonstrate that it has fully complied with the UFLPA, completely and substantively responded to all CBP inquiries, and demonstrate by clear and convincing evidence that the goods in question were not produced wholly or in part by forced labor in order to obtain an exception to the presumption.

The Forced Labor Enforcement Task Force (FLETF) released its long-awaited strategy (Strategy) on June 17, 2022.[1] The Strategy outlines the legal authorities available to CBP to support UFLPA’s enforcement, provides important guidance to importers about how to comply with UFLPA’s enforcement, and provides the initial ULFPA Entity List. The Strategy includes:

• A comprehensive assessment of the risk of importing goods mined, produced, or manufactured, wholly or in part, with forced labor in the PRC;[2]
• An evaluation and description of forced-labor schemes and the UFLPA Entity List, which provide an overview of PRC forced labor practices, lists of entities, products, and high-priority sectors affiliated with such practices, and U.S. enforcement strategies related to the lists;[3]
• Recommendations for the tools and technologies CBP will employ or adopt to identify and trace goods made with forced labor;[4]
• A description of how CBP plans to augment tools to prevent the importation of goods prohibited by 19 U.S.C. § 1307, including enhancing its use of detention and exclusion and seizure authority;[5]
• Additional resources required to administer and implement the UFLPA;[6]
• Guidance to importers, including (1) due diligence, supply-chain tracing and management measures; (2) the type of evidence that can be used to demonstrate that goods originating in the PRC were not produced wholly or in part in Xinjiang; and (3) the type of evidence that demonstrates that goods originating in the PRC, were not produced wholly or in part with forced labor; including goods detained, excluded or seized for violations of the UFLPA,[7]
• FLETF’s plan to coordinate and collaborate with appropriate nongovernmental organizations private-sector entities to implement and update UFLPA strategy.[8]

Transition from WRO to UFLPA Enforcement

Since 2019, CBP has issued Withhold Release Orders (WROs) on specific goods from nine PRC companies using government-sponsored forced labor,[9] on cotton from the Xinjiang Production and Construction Corps (XPCC), and on all Xinjiang cotton, tomatoes, and/or downstream products using cotton and tomatoes as inputs.[10] The Department of Commerce Bureau of Industry and Security (BIS) added entities that use forced labor in Xinjiang to the BIS Entity List, which imposes a license requirement on exports, reexports, or transfers (in-country) of commodities, software, and technology subject to the Export Administration Regulations (EAR).[11] The Department of Labor has identified goods produced in Xinjiang or through the labor transfer program on its List of Goods Produced by Child Labor or Forced Labor, and the Department of the Treasury has identified individuals and entities for the Specially Designated Nationals and Blocked Persons List, including the XPCC.[12]

UFLPA will supersede current WROs related to Xinjiang for goods imported on or after June 21, 2022. Shipments that were imported prior to June 21, 2022 will be adjudicated through the CBP WRO/Findings process. Shipments imported on or after June 21, 2022 that are subject to the UFLPA, which previously would have been subject to a Xinjiang WRO, will be processed under UFLPA procedures, and detained, excluded, or seized.[13] Upon detention or exclusion of the merchandise, importers will need to become familiar with the procedures for requesting a review of whether the importation is within the UFLPA’s purview, requesting an exception from the rebuttable presumption in accordance with Section 3(b) of the UFLPA, or exporting the goods.[14]

CBP plans to identify and interdict shipments exported to the United States by entities located in Xinjiang, subsidiaries and affiliates of the XPCC, and any other entities, wherever located, found to utilize Xinjiang products in their supply chain. The targeted items will include all products produced and exported by these entities, as well as finished goods exported by other manufacturers that were produced with inputs from those entities.[15]

Efforts to Accurately Identify and Trace Goods

The Strategy advises that businesses and individuals must review the risks (including the potential imposition of civil and criminal liability) of doing business with suppliers who use forced labor. Importers should undertake heightened due diligence to ensure compliance with U.S. law and to identify potential supply chain exposure to companies operating in Xinjiang, linked to Xinjiang, (e.g., through the pairing assistance program or Xinjiang supply chain inputs), or using Uyghur or other minority laborers in the PRC.[16]

Importer Guidance

To avoid exclusions or seizure of imported goods, importers may provide information to CBP indicating that the goods are not in any way subject to UFLPA—that is, their importations and inputs thereof are sourced completely from outside Xinjiang and have no connection to the UFLPA Entity List. CBP will release such shipments, provided they are otherwise in compliance with U.S. law. Providing such documentation in English will facilitate CBP’s efficient review of these exception requests.[17]

For imports within the scope of UFLPA, importers may request an exception, which requires them to (i) comply with the Strategy and any implementing regulations and CBP guidance; (ii) respond completely and substantively to all CBP requests for information; and (iii) demonstrate by clear and convincing evidence that their imports were not made with forced labor. Goods that do not qualify for an exception are subject to exclusion, or seizure and forfeiture.[18]

Importers may also identify additional shipments that have identical supply chains to those that have been reviewed previously and determined to be admissible by CBP, to facilitate the faster release of identical shipments.[19]

The Strategy provides guidance to importers on three specific topics: (1) performing adequate due diligence and effective supply-chain tracing and management measures to ensure imported goods are not produced with forced labor; (2) a description of evidence that demonstrates goods originating in the PRC were not produced in Xinjiang; and (3) a description of evidence that demonstrates goods originating in the PRC, including goods detained, excluded, or seized under UFLPA, were not produced with forced labor.[20]

Due Diligence

To overcome the rebuttable presumption, importers must perform adequate due diligence to ensure they do not import any goods produced in whole or in part with forced labor. In the context of the Strategy, due diligence includes assessing, preventing, and mitigating forced labor risk in the production of goods imported into the United States.[21]

The Strategy provides that due diligence systems may vary from industry to industry, but an effective due diligence system certainly includes stakeholder engagement, risk assessment, developing a code of conduct, communication and training, compliance monitoring, remediation of violations, independent review, and public reporting.[22]

Supply-Chain Tracing and Management Measures

Due diligence also involves effective supply-chain tracing. Supply-chain tracing is the ability to demonstrate chain of custody of goods and materials from the beginning of the supply chain to the buyer of the finished product. Typically, the first step of tracing is to map the entire supply chain up to and including suppliers of raw materials used in the production of the imported good.[23] Importers must know their suppliers and labor sources at all levels of the supply chain.[24]

In addition, supply-chain management measures are measures taken to prevent and mitigate identified risks of forced labor, and are an important part of due diligence.[25] Effective supply-chain management measures include (i) vetting potential suppliers for forced labor prior to contracting with them; (ii) mandating that supplier contracts require the supplier to take corrective action if forced labor is identified in the supply chain; and (iii) specifying the consequences, such as termination of the contractual relationship, if corrective action is not taken.[26]

Importers should have an information system to regularly collect, manage, and update supply-chain management data, including all mapping and risk and impact assessment information. Importers should also be able to demonstrate how risk and impact assessment information is used to inform forced labor risk prevention and mitigation.[27]

Evidence to Demonstrate that a Good Was Not Mined, Produced, or Manufactured, Wholly or in Part, in Xinjiang

The type, nature, and extent of evidence required from the importer to facilitate a determination that an importation is not subject to UFLPA will vary based on the facts and circumstances of the import in question.[28] Supply-chain tracing is the general method to demonstrate that imported goods were not mined, produced, or manufactured in Xinjiang. CBP may request evidence to demonstrate supply-chain tracing of the entire supply chain of an imported good or specific component of the good.[29] When requested by CBP, importers should be prepared to provide the following documentation:

• A detailed description of the supply chain for the imported good and components thereof, including all stages of mining, production, or manufacture, including any step of the sourcing, manufacturing, or processing of goods in third countries. This includes documenting (i) how the imported good was made from raw materials to finished good; (ii) the entities who performed the operation(s); (iii) where the operation(s) occurred, including all in-house manufacturing, sub-assembly operations, and outsourced production; (iv) the roles of the entities involved at each stage; and (v) the relationship between the entities (e.g., whether a supplier is also a manufacturer).
• Evidence showing the provenance of each component of the imported good. Unique identifiers should be used, where possible, to track inputs and raw materials throughout the supply chain. Where comingling occurs, an auditable process for demonstrating the origin and control of each raw material or input should exist. For DNA traceability or isotopic testing to be considered, its reliability must be demonstrated and must bear a relationship to the part of the supply chain for which the alternative evidence is being substituted, and the test results must be traceable to the specific import under CBP review.[30]

Evidence to Demonstrate that a Good Was Not Mined, Produced, or Manufactured Wholly or in Part by Forced Labor

If an importer cannot demonstrate that an import lacks any connection to Xinjiang or to entities on the UFLPA Entity List, then it may request an exception. The presumption applies unless the importer demonstrates by clear and convincing evidence that the goods were not mined, produced, or manufactured, in whole or in part, by forced labor. The evidence must demonstrate that indicators of forced labor, including intimidation and threats, abuse of vulnerability, restriction of movement, isolation, abusive living and/or working conditions, and excessive hours, do not exist or are fully remediated.[31] The type, nature, and extent of evidence required from the importer to facilitate a determination that a good was not manufactured by forced labor will vary based on the facts and circumstances of the import in question.

Evidence to demonstrate that goods originating in the PRC were not made with forced labor may include:

• Mapping the entire supply and transportation chain;
• Detailed background information of all workers at an entity subject to the rebuttable presumption in the production of the imported item;
• Evidence that none of the workers involved in the production of the item were recruited, transported, transferred, harbored, or received with the involvement of the government of the PRC, XPCC, or entities on the UFLPA Entity List;
• Documentation of the controls each entity has in place to ensure that all workers are recruited voluntarily; and
• Evidence that demonstrates every worker from Xinjiang is working voluntarily, and without menace or threat of penalty.

Any audit performed to demonstrate that goods originating in the PRC were not made with forced labor must explain (i) its methodology, (ii) how it determined the presence or absence of forced labor indicators, (iii) all the evidence upon which it made its determination, and (iv) how the auditor determined the reliability of the evidence.[32]

Conclusion

The Strategy is the most detailed guidance released to date showing how the UFLPA will be enforced. Importers should closely review the Strategy to ensure they understand the risk of utilizing supply chains involving Xinjiang. In particular, importers must ensure they are in a position to prove to CBP that their imported goods were not mined, produced, or manufactured, in whole or in part, in Xinjiang, or that they are in a position to demonstrate that they have employed the requisite due diligence, effective supply chain tracing, and supply chain management measures to provide clear and convincing evidence that their goods were not mined, produced, or manufactured, in whole or in part, by forced labor.

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