What Is The Purpose of The UYGHUR Forced Labor Prevention Act, And How Is It Implemented?
The Uyghur Forced Labor Prevention Act (UFLPA) was signed into law on December 23, 2021, and it now creates a “rebuttable presumption” that all items produced in Xinjiang are created using forced labor and are thus prohibited from entering the United States. Most, if not all, businesses will find it challenging to meet the law’s need to “guarantee that items mined, produced, or manufactured fully or in part using forced labor are not imported into the United States” without extensive supplier mapping and due diligence.
Customs and Border Protection (CBP) will begin today to apply the provisions of the Uyghur Forced Labor Prevention Act to restrict the importation of Xinjiang-made items into the United States. With strong bipartisan support in Congress, President Biden signed the Act into law on December 23, 2021, highlighting our commitment to eliminating forced labor across the world, especially in China’s oppressive region of Xinjiang.
Operational Guidance for Importers was prepared on June 13, 2022, by the U.S. Customs and Border Protection (CBP) to help importers prepare for the implementation of the Uyghur Forced Labor Prevention Act (UFLPA), which takes effect on June 21, 2022.
On June 21, 2022, the US Department of Homeland Security (DHS), in its function as the chair of the FLETF, will publish a strategy for implementing the UFLPA, which the Operational Guidance attempts to supplement by providing transparency into CBP’s operational approach to executing that law.
The FLETF Strategy will provide importers with guidelines on due diligence, supply chain tracking and management, and the necessary proof to prove that items were not mined, produced, or manufactured in China or by forced labor. List of XUAR entities suspected of using forced labor, dubbed “UFLPA Entity List” as part of FLETF strategy.
UFLPA’s Strategic Plan
UFLPA’s Strategic Plan is comprised of the following:
According to the law, the Uyghur Forced Labor Prevention Act strategy must address specific issues and concerns. This includes: (1) a thorough assessment of the risk of importing goods produced, mined, or manufactured in the PRC with forced labor; (2) an evaluation and description of forced labor schemes and the UFLPA Entity List; (3) recommendations for efforts, initiatives, tools, and technologies to identify and trace goods; (4) CBP’s plan to enhance its use of legal authorities and tools; (5) a description of additional measures.
A Quick Overview of the Uyghur Forced Labor Prevention Act
The Uyghur Forced Labor Prevention Act, signed into law by President Joe Biden in December 2021, creates a rebuttable presumption that “any goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part” in the XUAR or by certain entities within the region are produced with forced labor and therefore prohibited from importation.
Since items from the XUAR are prohibited from being imported into the United States after June 21, 2022, importers will be required to prove to CBP that they are not violating any of the following:
- Complete compliance with the FLTEF enforcement plan and any relevant rules was clearly shown by the clear and persuasive proof that the items were not mined, produced, or manufactured totally or in part from forced labor.
- The presumption applies to items created in China and transported to foreign countries that include components from the XUAR.
A Guide for Importers from CBP on Operational Issues
UFLPA-related detentions, exclusions, and seizures will be handled in a somewhat different manner by CBP, according to the agency’s recently issued guidance document. Prior to the UFLPA, Section 1307 was generally enforced by CBP issuing WROs upon receipt of information that produced a reasonable suspicion that items manufactured by a specific firm or in a particular location were made using forced labor.
Under a WRO, importers typically have 90 days in which to either export the products or produce proof sufficient for CBP to establish that no forced labor was employed in making the item. Under the Uyghur Forced Labor Prevention Act, importers whose products are detained must produce clear and persuasive proof that the commodities were not manufactured in the XUAR or using forced Uyghur labor within 30 days.
For any operational inquiries concerning CBP’s enforcement of the UFLPA, the CBP Operational Guidance is the best place to start. Detentions, exclusions, and seizures of imported commodities made pursuant to the Uyghur Forced Labor Prevention Act are described in detail in CBP’s Operational Guidance. UFLPA application and necessary action will be determined on a case-by-case basis by the Customs and Border Patrol (CBP).
An Entity List from the Uyghur Forced Labor Prevention Act will also be used to identify shipments. An important distinction is that CBP policies under-withholding release orders (WROs) will not apply to products imported on or after June 21, 2022, and the UFLPA will replace present WROs linked to the XUAR for such commodities.
There is a list of the current government and global resources that may be used by importers to establish supply chain due diligence, tracing, and management plans:
- Must demonstrate that it has put in place a strategy to ensure that its supply chains are not affected by forced labor.
- Be able to track the supply chain of imported products “from raw ingredients to the imported good;.”
- High-risk commodities (such as cotton, polysilicon, and tomato products) should preserve manufacturing records that detail the “entire supply chain” and show that raw materials or components from the XUAR or created with forced labor from Uyghurs have been mixed with non-XUAR inputs.
Defeating the Rebuttable Presumption
Operational Guidance provides importers with instructions for requesting a rebuttable presumption exemption from the Uyghur Forced Labor Prevention Act. Requesting an exemption to the rebuttable presumption from CBP may be done at any time during detention, exclusion, or seizure. Importers seeking an exemption to the Uyghur Forced Labor Prevention Act assumption must clearly articulate their intentions in each of these cases and offer adequate proof to back up their claims. Importers are expected to reply fully to any CBP requests for information and may be required to provide the following information:
- Documenting the due diligence procedure or tracking the supply chain from raw materials to finished items brought into the country
- Internal controls to avoid or limit the risk of forced labor and remediate any usage of forced labor in the supply chain paperwork tracing the supply chain for imported commodities that proves that the items were not mined, produced, or manufactured entirely or in part in XUAR.
- Verification of the non-use of forced labor in mining, production, or manufacturing of Chinese commodities
- Within the Operational Guidance, you’ll find many samples of paperwork that might meet these criteria. However, CBP may examine information other than that supplied by the importer when evaluating whether there is clear and convincing evidence – the appropriate level of review.
- The Customs and Border Patrol (CBP) also offers particular recommendations for supply chain documentation related to commodities that have a high risk of forced labor.
- Current Xinjiang WROs under Section 1307 of the United States Code apply to these items.
- As required by the UFLPA, any exceptions to the rebuttable presumption granted by CBP must be made public.
Tips for Importing to the United States if Your Business Does So
The paperwork necessary to achieve the “clear and convincing” proof requirement is vast and onerous, particularly when sourcing from the XUAR, despite the fact that this assumption enables exceptions.
The XUAR has prompted the United States government to publish a series of warnings to firms on how to do due diligence. To reduce Uyghur Forced Labor Prevention Act non-compliance concerns, enterprises should adhere to international norms like the UN Guiding Principles on Businesses and Human Rights and the OECD Guidelines for Multinational Enterprises.
Final Thoughts
Imports from China and others will face additional challenges as a result of the Uyghur Forced Labor Prevention Act‘s high standards and the accompanying documentation and supply chain management requirements. According to the Operational Guidance, CBP believes that the heightened due diligence and supply chain tracing efforts needed by the Uyghur Forced Labor Prevention Act will extend across the importer’s supply chain, including products that may be exported from other locations in China and to other nations for further processing. Importers should constantly refine and analyze supply chain processes and documentation requirements, create solid diligence procedures to stay up with the shifting cross-border regulatory environment, and be ready to overcome the assumption of forced labor since CBP may also examine evidence other than that supplied by the importer when deciding whether there is clear and persuasive evidence.
The Operational Guidance provides a wide variety of insights that might lead to new import practices, but they must be studied and judged depending on the realities of specific firms.
