The UFLPA becomes effective and CBP and DHS issue compliance guidance

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Eversheds Sutherland (US) LLPThe Uyghur Forced Labor Prevention Act (the UFLPA) came into effect last week, and US Customs and Border Protection (CBP) and US Department of Homeland Security (DHS) have released guidance for importers for demonstrating that their supply chain is free from content derived from forced labor. As detailed in our February 2022 article, President Biden signed UFLPA into law on December 23, 2021, with an effective date of June 21, 2022. 

In an effort to aide importers’ compliance with UFLPA,

  • on June 13, 2022, CBP issued the UFLPA Operational Guidance for Importers (CBP Guidance), providing guidance regarding the implementation of the UFLPA;
  • on June 17, 2022, DHS, as chair of the Forced Labor Enforcement Task Force (FLETF), issued the much anticipated “Strategy to Prevent the Importation of Goods Mined, Produced, or Manufactured with Forced Labor in the People’s Republic of China” (DHS Guidance), which provides guidance in greater detail than the CBP Guidance.

What does the UFLPA do?

The UFLPA establishes a rebuttable presumption that all goods mined, produced,

or manufactured wholly or in part in Xinjiang were made with forced labor; therefore such goods will presumptively be denied entry into the United States. The rebuttable presumption applies to goods that contain any level of materials produced with forced labor and at any level of the supply chain. Importers will need to include a detailed description of the supply chain for the imported goods and their components, including all stages of sourcing, manufacturing and production. For instance, CBP may deny entry to clothing that was made in and shipped from a 3rd country if CBP suspects that the clothing contains cotton picked by forced labor in Xinjiang.

CBP may exclude or detain, seize or forfeit the goods presented to it for importation if it believes the goods are within the scope of UFLPA. To overcome the rebuttable presumption, the importer must demonstrate with clear and convincing evidence that the imported goods were not mined, produced, or manufactured wholly or in part by forced labor. If the importer overcomes this burden, the CBP Commissioner will determine that an exception to the presumption is warranted and the port director will release the merchandise.

Where should importers look for guidance?

CBP will rely on the US Department of Labor’s (DOL) List of Goods Produced by Child Labor or Forced Labor, List of Products Produced by Forced or Indentured Child Labor, and Better Trade Tool, as well as the US Department of State’s (DOS) Trafficking in Person Report and Responsible Sourcing Tool, to help identify targets and implement the UFLPA. 

DHS also recommends that importers use DOL’s Comply Chain as guidance for developing and demonstrating due diligence in the supply chain. Namely, due diligence processes should include procedures for

  1. identifying and engaging with stakeholders;
  2. conducting risk assessments;
  3. adopting a written code of conduct or equivalent standards;
  4. training to their employees or agents responsible for selecting suppliers;
  5. monitoring supplier compliance with their code of conduct; (6) demonstrate remediation of all indicators of forced labor;
  6. independent third-party verification to demonstrate the implementation and effectiveness of an importer’s due diligence system; and
  7. regular and timely public reporting on its due diligence system, including the auditing and verification processes. 

According to the DHS Guidance, importers demonstrate to CBP “with clear and convincing evidence” in order to overcome the rebuttable presumption and demonstrate that the goods were not made wholly or in part with forced labor. This includes

  • Mapping the entire supply chain, and transport along the supply chain, including which entities were involved at each stage
  • Providing a complete list of all workers at an entity subject to the rebuttable presumption, including wages paid, residency of workers, documents relating to hours worked and daily production output of goods etc.
  • Furnishing evidence that none of the workers are recruited, transported, transferred, harbored, or received with the involvement of the Chinese Government, Xinjiang Production and Construction Corps, or any entity on the UFLPA Entity List published by DHS, and confirming that every worker from Xinjiang is working voluntarily, and without menace or threat of penalty

The DHS Guidance provides detailed information on the evidence importers need in order to overcome the rebuttable presumption. For instance, for supply chain mapping, DHS explains that “identity preservation requires each product input to be packaged, processed, and traced separately from other product inputs or modifications throughout the supply chain. Most importantly, it does not allow any commingling of product inputs at any point in the supply chain.” Importers will need to document how the imported goods were made – all the way from raw materials to finished goods, listing all entities and locations involved, including processes that were in-house as well as partially or wholly outsourced and the relationship between the entities involved. 

What will be the focus of UFLPA implementation and enforcement?

CBP has the authority under the UFLPA to deny entry to any goods suspected to be sourced from or produced or manufactured in Xinjiang, China. Nonetheless, due to the broad authority and discretion and potential application of the UFLPA, CBP will likely begin implementing and enforcing the UFLPA on a more limited basis by denying entry to goods with direct or indirect connection to entities on the UFLPA Entity List

The UFLPA Entity List includes some of the entities previously listed on Withhold Release Orders (WROs) as well as some new entities:

Entity Name
Baoding LYSZD Trade and Business Co., Ltd. 
Changji Esquel Textile Co. Ltd. (and one alias : Changji Yida Textile)
Hetian Haolin Hair Accessories Co. Ltd. (and two aliases: Hotan Haolin Hair Accessories; and Hollin Hair Accessories)
Hetian Taida Apparel Co., Ltd (and one alias: Hetian TEDA Garment)
Hoshine Silicon Industry (Shanshan) Co., Ltd (including one alias: Hesheng Silicon Industry (Shanshan) Co.) and subsidiaries
Xinjiang Daqo New Energy, Co. Ltd (including three aliases: Xinjiang Great New Energy Co., Ltd.; Xinjiang Daxin Energy Co., Ltd.; and Xinjiang Daqin Energy Co., Ltd.)
Xinjiang East Hope Nonferrous Metals Co. Ltd. (including one alias: Xinjiang Nonferrous)
Xinjiang GCL New Energy Material Technology, Co. Ltd (including one alias: Xinjiang GCL New Energy Materials Technology Co.)
Xinjiang Junggar Cotton and Linen Co., Ltd.
Xinjiang Production and Construction Corps (including three aliases: XPCC; Xinjiang Corps; and Bingtuan) and its subordinate and affiliated entities
Aksu Huafu Textiles Co. (including two aliases: Akesu Huafu and Aksu Huafu Dyed Melange Yarn)
Hefei Bitland Information Technology Co., Ltd. (including three aliases: Anhui Hefei Baolongda Information Technology; Hefei Baolongda Information Technology Co., Ltd.; and Hefei Bitland Optoelectronic Technology Co., Ltd.)
Hefei Meiling Co. Ltd. (including one alias: Hefei Meiling Group Holdings Limited)
KTK Group (including three aliases: Jiangsu Jinchuang Group; Jiangsu Jinchuang Holding Group; and KTK Holding)
Lop County Hair Product Industrial Park
Lop County Meixin Hair Products Co., Ltd.
Nanjing Synergy Textiles Co., Ltd. (including two aliases: Nanjing Xinyi Cotton Textile Printing and Dyeing; and Nanjing Xinyi Cotton Textile)
No. 4 Vocation Skills Education Training Center (VSETC)
Tanyuan Technology Co. Ltd. (including five aliases: Carbon Yuan Technology; Changzhou Carbon Yuan Technology Development; Carbon Element Technology; Jiangsu Carbon Element Technology; and Tanyuan Technology Development)
Xinjiang Production and Construction Corps (XPCC) and its subordinate and affiliated entities
Baoding LYSZD Trade and Business Co., Ltd.
Hefei Bitland Information Technology Co. Ltd.
Hetian Haolin Hair Accessories Co. Ltd.
Hetian Taida Apparel Co., Ltd.
Hoshine Silicon Industry (Shanshan) Co., Ltd., and Subsidiaries
Xinjiang Junggar Cotton and Linen Co., Ltd.
Lop County Hair Product Industrial Park
Lop County Meixin Hair Products Co., Ltd.
No. 4 Vocation Skills Education Training Center (VSETC)
Xinjiang Production and Construction Corps (XPCC) and its subordinate and affiliated entities
Yili Zhuowan Garment Manufacturing Co., Ltd.

The UFLPA Entity List will be updated regularly on the DHS website.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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