- What is the Uyghur Forced Labor Prevention Act (UFLPA) and how might it impact your business?
- Issues surrounding the UFLPA
- Key dates for Customs and Border Patrol (CPB) guidance and UFLPA implementation
- What you need to do to be prepared
The Uyghur Forced Labor Prevention Act (UFLPA) was signed into law by President Biden on December 23, 2021. The UFLPA creates a rebuttable presumption that “any goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in the Xinjiang Uyghur Autonomous Region [XUAR] of the People’s Republic of China”—or by entities listed by the U.S. as having ties to forced labor in the XUAR—were made using forced labor and cannot be imported into the U.S. per Section 307 of the Tariff Act of 1930 (19 U.S.C. 1307). The UFPLA will go into full effect on June 21, 2022.
U.S. Customs and Border Protection (CBP) is required to issue guidance under the UFLPA on the evidentiary standard required to overcome this presumption, complementing an enforcement strategy to be recommended by the Forced Labor Enforcement Task Force (FLETF). As part of this process, FLETF held a virtual public hearing on April 8, 2022 to solicit testimony on the use of forced labor in China and potential measures to prevent the importation of goods mined, produced, or manufactured wholly or in part with forced labor in China into the United States. The public comments presented at the hearing, as well as written comments from the public received in March and April, will inform the FLETF’s decision making on final implementation of the UFLPA.
Public comments on implementation of the UFLPA fell into several broad categories:
Industry groups and importers sought clarity on how to comply with the UFLPA and peace of mind that their businesses could continue unimpeded. Major points of discussion included:
- Clarification on what will satisfy the “clear and convincing” evidentiary standard mandated by the UFLPA;
- Adoption of a “trusted importer” or similar program that would allow importers to pre-clear goods and proactively disprove allegations of forced labor, without having to receive a withhold release order (WRO) from U.S. Customs and Border Protection (CBP);
- Establishment of a de minimis exception that would allow importers of products with minor amounts of suspected materials to avoid the necessity of a full audit and investigation; and
- Delayed enforcement of the act to allow companies time to gather necessary documentation and modify their business practices and supply chains as needed.
Companies based in China or having longstanding business relationships in the XUAR denied the use of forced labor, argued that they had never witnessed evidence of forced labor in their inspections or business dealings, and expressed concern over the burden companies would face in proving the absence of forced labor to authorities in the U.S.
Human rights groups argued strenuously against the requests made by industry, and encouraged strict interpretation and enforcement of the UFPLA by FLETF and CBP. Major points of discussion included:
- Companies should not get “advance notice” of CBP evidentiary requirements;
- Substantial documentation should be needed to satisfy the “clear and convincing evidence” standard, possibly beyond what is currently required to remove a WRO—including complete supply chain mapping, photographic evidence of facilities, copies of supplier contracts, etc.; and
- Blanket WROs for all companies and products linked to the XUAR, with no exceptions.
FLETF will have to consider all of these conflicting positions when drafting guidance on how to comply with the UFLPA. Importantly, the date by which FLETF is required to provide such guidance is the same date that the UFLPA goes into full effect—June 21, 2022.
CBP also recently announced that in advance of June 21st, CBP will be issuing letters to importers identified as having previously imported merchandise that may be subject to the UFLPA. These letters are intended to encourage those importers to address any forced labor issues in their supply chains in a timely manner.
If an importer does not receive a letter from CBP, it does not mean that the importer’s supply chain is free of forced labor. CBP expects all importers to review their supply chains thoroughly and to institute “reliable measures” to ensure imported goods are not produced wholly or in part with forced labor.
Companies should make every effort to proactively review their supply chains and instate reliable measures prior to the UFLPA effective date of June 21, 2022, and should be prepared to comply with guidance from FLETF as soon as such guidance is issued. Also, companies should be prepared to respond to inquiries from CBP with sufficient evidence and support to demonstrate that their goods were not produced wholly or in part with forced labor.
If you have questions about supply chain due diligence, evidentiary requirements for overcoming a WRO, or other aspects of preparing for implementation of the UFLPA, we can help. Mark Vaders (Mark.Vaders@wbd-us.com) and Michael Sullivan (Michael.Sullivan@wbd-us.com) advise clients on consumer products regulation, including product labeling and supply chain due diligence. Jim Kearney (James.Kearney@wbd-us.com) has deep experience with cross-border transactions and complying with various aspects of U.S. import, export, and trade laws.