The Department of Homeland Security (DHS), Chair of the Forced Labor Enforcement Task Force (FLETF), announced on May 16 the addition of 26 textile companies based in China to the Uyghur Forced Labor Prevention Act (UFLPA) Entity List. Effective the next day, May 17, goods from the newly-added Entities were restricted from entering the United States. Most of the Entities added to the UFLPA Entity List are manufacturers based outside of the Xinjiang Uyghur Autonomous Region (XUAR). According to the DHS announcement, the decision to add Entities located outside of the XUAR to the UFLPA Entity List is intended to “increase transparency and ensure responsible companies can conduct due diligence on their supply chains.”
The DHS announcement represents the largest to-date one time expansion to the UFLPA entity list. This action is part of a greater strategy by DHS with respect to textile enforcement and combating illicit trade in the textile industry.
According to DHS, all 26 Entities are cotton traders or warehouse facilities that source cotton from the XUAR. Twenty-one of the Entities sell XUAR-sourced cotton on the wholesale market. Before the enactment of the UFLPA, cotton was already subject to a U.S. Customs and Border Protection (CBP) Withhold Release Order (WRO), and cotton and textiles remain priority products of enforcement.
The May 16 action by DHS marks an important change in the enforcement of the UFLPA given DHS’ addition of Entities based outside of the XUAR to the Entity List.
It remains important for U.S. importers to practice due diligence with respect to their supply chains and to ensure that no forced labor exists in their supply chains regardless of whether their suppliers are located in the XUAR. Please contact CLK’s customs and supply chain compliance team if you have questions or require assistance.