Forced Labor Prevention Act
The Uyghur Forced Labor Prevention Act
What does this mean for the trade?
How will enforcement work?
Eliminate the risk of goods being detained
What is The Uyghur Forced Labor Prevention Act (UFPLA)?
The Uyghur Forced Labor Prevention Act (UFPLA) took effect on June 21, 2022. It 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 China(XUAR), or produced by certain entities, are not entitled to entry to the United States.
Section 307 of the Tariff Act of 1930 prohibits importing any product that was mined, produced or manufactured wholly or in part by forced labor, including forced or indentured child labor. This is enforced by U.S. Customs and Border Protection.
Common industries that utilize forced labor in China are quartz, cell phones, tomatoes and other foods, computers, cotton, silicon products, solar panels and textiles. Importers of these products should be especially diligent in vetting their supply chain for forced labor risks.
What Does This Mean For Trade?
US Customs and Border Protection takes the stance that the importer must apply due diligence and effective supply chain tracing and management to ensure that no vendor, supplier or subcontractor anywhere in their supply chain provides goods or components that are mined, produced or manufactured wholly or in part with forced labor from the People’s Republic of China, especially from the XUAR.
US CBP has issued letters to importers and CTPAT members who are known to have imported from this region in the past, in advance of the June 21st enforcement date.
How Will Enforcement Work?
Once goods are detained by Customs, within a 30-day period, an appeal must be made to contest admissibility, or the goods must be re-exported at the importer’s expense. The burden of proof is with the importer of the goods, and it must rise to the level of “clear and convincing”. There is also a reporting requirement to US Customs and the Public for goods detained under the UFPLA. Failure to comply with the UFPLA will bring consequences that include seizure, forfeiture and penalties.
How Can Importers & Suppliers Eliminate the Risk of Their Goods Being Detained?
5 Steps that can be taken by importers and suppliers to combat forced labor include:
Reviewing and auditing suppliers, subcontractors and upstream vendors with regards to origin of any goods or components.
Establishing procedures for vetting new vendors with forced labor questionnaires, and changing suppliers if found to be using forced labor.
Auditing overseas facilities for forced labor and Interviewing factory workers in China to confirm that they are working voluntarily.
Creating a Company Social Compliance Policy with senior management on board that addresses the company’s commitment to avoid using forced labor in its supply chain.
Conducting a risk assessment – Map supply chains and identify steps in the chain where there is a forced labor risk