On July 26, 2023, the Forced Labor Enforcement Task Force (“FLETF”), chaired by the Department of Homeland Security, published an updated strategy for the Uyghur Forced Labor Prevention Act (“UFLPA”). The UFLPA went into effect on June 21, 2022, and established a rebuttable presumption that all merchandise coming from the Xinjiang region of China (XUAR) is a product of forced labor. The UFLPA captures all upstream and downstream merchandise coming from the XUAR and does not include a de minimis provision. The FLETF is required to publish annual updates to its UFLPA Strategy, and the 2023 update focuses on three main areas: language addressing the requirements of the UFLPA Entity list, interagency coordination and resource allocation, and continued collaboration with NGOs and private sector entities.
While the UFLPA strategy remains largely the same, one change to the enforcement plan is that Withhold Release Orders (“WROs”) will not be issued on goods subject to the UFLPA because goods coming from or made with XUAR components are already prohibited from entering the United States. Under 19 U.S.C. 1307, CBP already has authority to “detain, seize, or exclude goods produced with forced labor, as well as to issue civil penalties against those who facilitate such imports.”
With this change, the FLETF does not formally expand the list of high-risk sectors, however, Appendix B of the update lists “Products mined, produced, or manufactured wholly or in part by each entity” on the UFLPA entity list. In addition to polysilicon, tomatoes, and cotton, the entities on the UFLPA Entity List are manufacturers of electronics, hair products, laser printers, and PVC, among others.
The FLETF confirmed that, thanks to NGOs and the private sector that conduct research into forced labor supply chains, new sectors are being monitored for UFLPA forced labor concerns. These sectors include red dates, vinyl products, aluminum, steel, batteries, electronics, and automobile components. In its annual update, the FLETF emphasizes that it remains “committed to combating forced labor and ensuring global supply chains remain free and clear of goods produced with forced labor.”
Additions to the Entity List
On August 2, 2023 — one week after the release of the updated UFLPA strategy — the FLETF expanded the UFLPA Entity list by adding two entities and one subsidiary to section 2(d)(2)(B)(ii) of the list. These entities, Camel Group Co., Ltd. and Chenguang Biotech Group Co., Ltd., and its subsidiary, Chenguang Biotechnology Group Yanqi Co. Ltd., are manufacturers in the car batteries and plant extract industries. As outlined in the updated 2023 UFLPA strategy, published on July 26th of this year, and in conjunction with the updates to the UFLPA Entity List, it is apparent that the FLETF continues to target new sectors for forced labor enforcement. Four additional entities have been added to the UFLPA Entity List since the UFLPA went into effect on June 21, 2022.
CBP Administration & Enforcement
CBP’s efforts to prohibit entry into the United States of products from the Uyghur region of China appear to cast a wide net over imports from countries including China, Malaysia, Vietnam, Thailand, Mexico, among others. According to the Uyghur Forced Labor Statistics Dashboard, so far in 2023, 3,529 shipments have been detained under the UFLPA, valued over 1.2B USD. Importers are well advised to map their supply chains to point of origin for the products they ultimately import into the United States. CBP’s Centers of Excellence (“CEEs”), organized by industry, are heading up the detention and review process which continues to evolve.
A question that often arises when importer clients try to understand the underlying basis for the UFLPA is the extent to which NGO’s and private sector organizations that monitor forced labor accurately report their observations. Hopefully as more process and transparency is rolled out by CBP, the importing community will have a better understanding of CBP’s review process and criteria for excluding merchandise detained or seized under the UFLPA.
Please contact CLK’s customs/supply chain compliance team if you have questions or require assistance.