UFLPA & Entity List Compliance

UFLPA Compliance and the Entity List Update

The Uyghur Forced Labor Prevention Act (UFLPA) was enacted on December 23, 2021 and went into effect June 21, 2022.

This law infers that all products made in the Xinjiang Uyghur Autonomous Region (XUAR) of China are made with forced labor.

Companies importing goods made in the XUAR region must prove that their products were not made with forced labor in order to be imported into the United States.

Affected Parties

All companies importing goods into the United States are subject to this ruling. If a company cannot prove that their products were made without the use of forced labor, then goods will not be allowed to enter the United States market.

U.S. Customs and Border Patrol (CBP) published a dashboard on March 14, 2023 that provides statistics on shipments that have been subjected to enforcement actions.  

High-Priority Sectors and Industries

It is important that companies develop due diligence strategies that will help trace and document supply chains in order to substantiate not using forced labor from the region. As part of a broader strategy to manage UFLPA requirements the first targeted goods include cotton, tomatoes, and polysilicon. Other goods targeted include apparel, silica-based products, and raw materials used to make aluminum alloys, silicone, and polysilicon. All are subject to enforcement.

Requirements

As stated on the CBP website, all companies must provide the following documentation:

Transaction and Supply Chain Records - full records of transactions and supply chain documentation that demonstrate the country of origin and its components (e.g., packing list, bill of lading, manifest);‍

Documents Demonstrating the Parties Participating in the Transaction - all parties involved in the manufacture, manipulation, or export of a particular good (e.g., summarize the roles of parties involved as substantiated by other supporting documents, flow chart of supply chain);

Documentation Relating to the Payment and Transportation of Raw Materials - the origin of the raw materials, and documentation showing that these business transactions (e.g., invoices, contracts, purchase orders) have occurred financially (e.g., proof of payments) and physically (e.g., documents to support goods were transferred from one entity to another.)

Updating the Entity List

The U.S. Department of Homeland Security (DHS) issued on June 12th, 2023 a Federal Register notice announcing the publication and availability of the updated Uyghur Forced Labor Prevention Act (UFLPA) entity list. This notice can be found on the DHS UFLPA website.

The Notice adds two entities and eight subsidiaries to the list of those working with the government in Xinjiang to recruit, transport, transfer, harbor, or receive forced labor of Uyghurs, Kazakhs, Kyrgyz, or other persecuted groups in Xinjiang. It is important that companies importing goods from XUAR review the list.

Actions and Activities

The CBP put together a document that identifies and summarizes the best practices as collected from various importer submissions. This document will help companies get their products released from customs quickly and streamline the customs review process.

For more guidance, download Best Practices for Applicability Reviews: Importer Responsibilities.

In addition, you can learn more about the United States/ CBP strategy for managing the UFLPA regulation by visiting the Homeland Security website.

Violations and the "Rebuttal" Process

If incoming products are suspected of violating the UFLPA regulation, then customs may issue a detention notice.This detention notice is referred to as a Withhold Release Order (WRO). WROs are issued for more regions than China and the issuance of a WRO prevents goods from being imported into the United States.

If an importer can demonstrate that the goods do not come from the Xinjiang area of China then the Commissioner of the CBP can issue an "exception."

According to CBP, an importer can use a rebuttable presumption, meaning if they can demonstrate their goods were not wholly produced or in part by forced labor as required by Section 3(b) of the UFLPA, then they can request an applicability review.

Due process is given to all importers. Requests for more time to gather documents can be done with a Port Director or Applicable Center Director.

Mitigate Supply Chain Risks

Today's business world is caught in a complex web of global regulations impacting how raw materials and goods are manufactured and shipped around the world. Geopolitical risks are everywhere and this translates to an environment filled with heavy regulations. In order to meet the tough requirements and avoid severe penalties, companies need to look deeper into their supply chains. It's important to have the right supplier policies in place for sourcing and to detect risks before they become a problem.

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Don't get stuck in U.S. Customs. Contact us today to get UFLPA Compliant.

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Links

U.S. Customs and border Patrol - Uyghur Forced Labor Prevention Act

Notice Regarding the Uyghur Forced Labor Prevention Act Entity List

‍U.S Customs and Border Patrol - Withhold Release Orders and Findings List.

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