June 21, 2022 – On June 13 and June 17, 2022, U.S. Customs and Border Protection (“CBP”) released importer guidance to assist the trade community in preparing for the implementation of the Uyghur Forced Labor Prevention Act (“UFLPA”), which goes into effect on June 21, 2022.  In particular, on June 13, 2022, CBP released its Operational Guidance for Importers (“Operational Guidance”), and on June 17, 2022, released its Strategy to Prevent the Importation of Goods Mined, Produced, or Manufactured with Forced Labor in the People’s Republic of China (“UFLPA Strategy”).

The UFLPA became law on December 23, 2021.  The UFLPA establishes a rebuttable presumption that the importation of any goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in the Xinjiang Uyghur Autonomous Region of the People’s Republic of China (“Xinjiang”), or produced by certain entities, is prohibited by Section 307 of the Tariff Act of 1930 and that such goods, wares, articles, and merchandise are not permitted entry into the United States.  CBP may detain such goods and either exclude them from entry or subject them to seizure or forfeiture.  The presumption applies unless the Commissioner of CBP determines, based on “clear and convincing” evidence provided by the importer, that the goods, wares, articles, or merchandise were not produced using forced labor. CBP has held in previous rulings that “clear and convincing” evidence is a higher threshold than a preponderance of evidence.

This rebuttable presumption becomes effective on June 21, 2022.  Among other things, the Operational Guidance details the information importers should provide if their goods are detained by CBP:

  • Information from the importer’s due diligence, such as supply chain mapping records, a supplier code of conduct forbidding the use of forced labor and related monitoring, and independent verification of the implementation and effectiveness of the due diligence system;
  • Supply chain tracing information showing that goods were not produced using forced labor or in Xinjiang, including identifying all entities in the supply chain and supporting relational information (e.g., purchase orders, invoices, bills of materials);
  • Information on supply chain management measures, such as internal controls to prevent forced labor risks and audited accounting and financial statements; and
  • Documentation that goods were not produced in Xinjiang or using forced labor, including supply chain mapping of each entity involved in the production process, information on the workers at each entity, information on worker recruitment, and credible independent audits to identify indicia of forced labor.

The Operational Guidance provides further specific examples of documentation for cotton, tomatoes, and polysilicon goods, which are among the highest priorities for CBP enforcement under the UFLPA.

The UFLPA also requires the interagency Forced Labor Enforcement Task Force, chaired by the Secretary of Homeland Security, and in consultation with the Secretary of Commerce and Director of National Intelligence, to develop and submit to Congress a strategy for supporting CBP’s enforcement of Section 307 of the Tariff Act of 1930 with respect to goods, wares, articles, and merchandise produced with forced labor in the People’s Republic of China.  The Task Force submitted the UFLPA Strategy to Congress on June 17, 2022. 

The UFLPA Strategy aims to support the enforcement of Section 307 of the Tariff Act of 1930, as amended (19 U.S.C. § 1307), to prevent the importation into the United States of goods mined, produced, or manufactured wholly or in part with forced labor in the People’s Republic of China.  Among other things, the UFLPA provides guidance to U.S. importers on complying with the UFLPA.  Specifically, the UFLPA Strategy recommends that importers develop due diligence, effective supply chain tracing, and supply chain management measures, pointing specifically to the U.S. Department of Labor’s Comply Chain tool as a guide. The UFLPA also provides guidance on the evidence required to demonstrate either that a good was not produced using forced labor (pointing to, among other things, identifying relevant workers and their supporting records) or was not produced in Xinjiang (pointing to, among other things, DNA tracing or isotopic testing to show the origin of a particular good). Finally, the UFLPA Strategy document includes the preliminary list of UFLPA Entities, including a number of companies previously designated on the Entity List or subject to a withhold release order for alleged use of forced labor.

These UFLPA developments highlight the need for companies engaged in U.S.-China trade to examine their supply chain and address the risks arising from UFLPA-related detentions.