The Federal Register Notice can be found here, and the Department of Homeland Security press release that provides additional context for the Federal Register Notice can be found here.
The UFLPA, passed last month, will create a rebuttable presumption that goods or raw materials produced in the Xinjiang Uyghur Autonomous Region (XUAR) of the People's Republic of China (PRC) are produced with forced labor and thus banned from importation. As discussed in Arent Fox's Forced Labor Task Force alert regarding the passage of the UFLPA, CBP is expected to exponentially increase detention of merchandise at the border when the rebuttable presumption goes into effect on June 21, 2022.
Stakeholders should consider submitting comments in order to help formulate the Task Force's UFLPA enforcement strategy with respect to the supply chain due diligence standards that will be required and the "clear and convincing" evidence that must be submitted to prove that goods were not produced with forced labor. After the comment period closes, the Task Force will conduct a public hearing (approximately April 25, 2022) and develop a strategy for enforcement of the UFLPA.
The Federal Register Notice includes a non-exclusive list of 18 questions that stakeholders may consider when developing their comments, which can be found here: Federal Register Notice. Some of the questions that will directly impact the implementation of the Task Force enforcement strategy are outlined below:
- How can the United States most effectively enforce the UFLPA against entities whose goods, wares, articles, or merchandise are made wholly or in part with forced labor in the PRC and imported into the United States?
- What due diligence, effective supply chain tracing, and supply chain management measures can importers leverage to ensure that they do not import any goods mined, produced, or manufactured wholly or in part with forced labor from the PRC, especially from the XUAR?
- What type, nature, and extent of evidence can companies provide to reasonably demonstrate that goods originating in the PRC were not mined, produced, or manufactured wholly or in part with forced labor in the XUAR?
- What tools could provide greater clarity to companies on how to ensure upcoming importations from the PRC were not mined, produced, or manufactured wholly or in part with forced labor in the XUAR? To what extent is there a need for a common set of supply chain traceability and verification standards, through a widely endorsed protocol, and what current government or private sector infrastructure exists to support such a protocol?
What Should Importers Do?
The comment period is open from January 24, 2022 through March 10, 2022. Companies impacted by the UFLPA should consider submitting a comment to inform the government of supply chain due diligence and transparency challenges, the difficulty in obtaining documentation to evidence that forced labor is not used, and the lack of infrastructure to support uniform verification standards. Arent Fox's Forced Labor Task Force is available to assist in drafting comments and with participating in the forthcoming hearings.
In preparation for the implementation of the June 21 "rebuttable presumption" standard, companies should implement forced labor policies and procedures and conduct supply chain due diligence to ensure that their imported products do not have a nexus to XUAR. Arent Fox has compiled a list of raw materials and finished products that are produced in the region to help companies identify the products in their supply chains that may be produced in XUAR.