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In December 2021, Congress passed the Uyghur Forced Labor Prevention Act (UFLPA) with overwhelming bipartisan support, passing the House 428-1 and the Senate unanimously. President Biden signed it into law. The UFLPA requires the administration to take significant new steps to prevent goods from entering U.S. markets produced in China's Xinjiang Uyghur Autonomous Region (XUAR), where state-sponsored forced labor is widespread.
The State Department is determined to make forced labor in Xinjiang a thing of the past and to solidify multilateral organizations in the face of this horrific violation of human rights. President Biden and his Administration make addressing forced labor and other human rights violations in the People's Republic of China (PRC) and worldwide a top priority.
They have taken concrete actions to boost accountability in Xinjiang, including Global Magnitsky financial sanctions, visa restrictions, export controls, import restrictions, Withhold Release Orders, and releasing a multi-agency enterprise bulletin on Xinjiang. This is to assist U.S. companies in avoiding commerce that enhances or benefits from human rights abuses, such as forced labor.
Importers should consult the FLETF Strategy to inhibit the importation of excavated goods produced or manufactured with Forced Labor in the People's Republic of China (FLETF Strategy). This was published by the United States Department of Homeland Security on June 17, 2022.
The FLETF Strategy specifies the evidence required to demonstrate that goods do not fall under the purview of the UFLPA. Also, there might be sufficient basis to overcome the rebuttable presumption that they are the product of forced labor.
The FLETF Strategy and Operational Guidance does not define the "clear and convincing" evidence guidelines. However, CBP officials have stated that it is higher than the "preponderance of evidence" standard. CBP officials directed key stakeholders to previous CBP decisions implementing the Countering America's Adversaries Through Sanctions Act (CAATSA). It contains imports from North Korea to analyze the "clear and convincing" evidence standard in the slave labor context during multiple public webinars before the UFLPA's effective date of June 21, 2022.
Importers are encouraged by the FLETF Strategy and Operational Guidance to track information across their supply chains. Therefore, importers will require comprehensive information about their entire supply chain, ranging from raw materials to imported goods and materials.
Compared to the other U.S. forced labor prohibition laws, U.S. importers will likely face serious challenges in overcoming the high evidentiary burden to disprove the presumption. As a result, it is critical to provide more effective due diligence to ensure that no segment of their supply chain, including raw materials, is subject to forced labor. Moreover, the burden of proof is entirely on the importer, which could harm U.S. importers and their supply chain.
The U.S. government rallies its allies and partners to end the use of forced labor in global supply chains. There must be a plan to speak out against atrocities in Xinjiang. People must unite and call on the Chinese government to immediately end atrocities and human rights violations.
The Uyghur Forced Labor Prevention Act ("UFLPA" or "Act"), which went into effect last month, ushers in a new era of importer supply chain diligence. CBP is now authorized in the United States to apprehend, disallow, and seize goods it suspects being produced in the XUAR or by entities on the Entity List.
FLETF Strategy composed of:
The UFLPA Entity List is defined in Section II of the FLETF Strategy. It includes many XUAR-based and XUAR-linked entities that manufacture textiles, clothing, polysilicon, touchscreen, electronics, hair products, and silica-based products.
Section VI, "Guidance to Importers," is a critical component of the FLETF Strategy. This section explains how to navigate the UFLPA restrictions and, if necessary, seek an exception to the rebuttable presumption.
The guidelines clarify that importers can seek to showcase that goods subject to CBP enforcement are legitimate. Importers can establish this through supply chain tracing, which is supported by documentation that includes a "detailed description" of the item's and its components' supply chains, as well as the provenance (traced back to raw materials) of each component.
Should importers attempt to rebut the presumption that specific goods were made with forced labor, they must first illustrate that they have followed the Strategy due diligence guidance, responded totally and meaningfully to all CBP requests for information, and documented, with clear and convincing evidence, that their products were not extracted, produced, or manufactured entirely or partially with forced labor.
An importer should be familiar with their suppliers and workforce sources at all levels of the supply chain. Supply chain "mapping" necessitates importers or a third party to collect and identify each supplier used throughout the supply chain. The mapping must also document the working conditions at each stage of the supply chain, from raw material suppliers to finished products.
The Strategy also advises Importers to include identity restoration and confinement to prevent product input from commingling during the supply chain. This is done by ensuring that each input is bundled, processed, and traceable to other productive resources. Finally, FLETF advises importers to obtain written affidavits from each stage of the manufacturing process, establishing that no forced labor is used.
Section VI of the guidance outlines the steps importers must take to overcome the rebuttable presumption for items sourced from the XUAR or Entities on the UFLPA Entity List. This includes the following steps that the importer must take to comply with the FLETF guidance:
Importers should establish a vetting process and review all supply chain agreements before entering into a contract with any potential supplier. The Strategy recommends that importers set up information systems to manage these measures and regularly update all mapping and risk assessment information.
Additional measures in an importer's supply chain management can be implemented to reduce the risk that a supplier will use forced labor. For example, importers may wish to diversify their supply chain by purchasing more from friendly countries. The Strategy suggests using investigative firms and third-party resources to monitor suppliers' business operations through teleconference meetings and in-person visits.
The CBP's Operational Guidance supplements the FLETF Strategy. It explains CBP's methodology to goods arbitrary detention, omissions, and seizures, as well as its importation procedure and Act enforcement. In addition, it outlines the steps an importer must take to request an exception to the rebuttable presumption, as well as additional supply chain management resources, due diligence, and tracing.
If the importer requests an exception to the UFLPA's rebuttable presumption, the Operational Guidance includes a section on "The Type and Details of Data that CBP May Require." The information below is not exhaustive, and importers must respond completely and substantively to all CBP inquiries. The five categories listed below are intended to supplement the FLETF Strategy:
