The Uyghur Forced Labor Prevention Act (UFLPA) established a rebuttable presumption that goods mined, produced or manufactured wholly or in part in the Xinjiang Uyghur Autonomous Region of China are produced with forced labor and therefore prohibited from being imported into the United States under Section 307 of the Tariff Act, which prohibits imports produced with forced labor.
Since the UFLPA took effect slightly more than two years ago, U.S. Customs and Border Protection (CBP) has examined more than 9,000 shipments. The UFLPA, as well as compliance guidance published by the U.S. government, are discussed in detail in our earlier Alerts here and here.
The UFLPA required the Forced Labor Enforcement Task Force (FLETF) to develop a strategy to support enforcement of the UFLPA. The UFLPA also requires the FLETF to provide annual updates to the Strategy. The FLETF is a multi-agency task force chaired by Homeland Security. It is responsible for monitoring enforcement of Section 307 of the Tariff Act.
The FLETF published its annual update to the Strategy yesterday. Among other things, the update identifies additional high-priority sectors, highlights recent additions to the UFLPA Entity List, indicates plans for identifying additional entities and outlines future enforcement plans. These updates, which are further discussed below, should be taken into account as part of forced labor compliance.
Additional High-priority Sectors
Three new high-priority sectors for enforcement have been added – polyvinyl chloride, aluminum and seafood. These new priority sectors augment those previously identified by the FLETF: apparel; cotton and cotton products; silica-based products (including polysilicon); and tomatoes and downstream products.
The updated Strategy indicates that importers are on notice to more closely review each tier in their supply chains to focus due diligence efforts on the supply chain nodes involving these sectors and enable enhanced streamlining and strengthening of compliance protocols to eliminate goods made with forced labor.
Further Expansion of the Entity List
The FLETF expects to continue to expand the UFLPA Entity List. Goods produced by entities on the Entity List are prohibited from being imported into the United States, unless the importer can demonstrate with clear and convincing evidence that the goods were not made with forced labor and the importer meets the CBP's other requirements for an exception to the forced labor presumption. During the last reporting period, the FLETF added an additional 38 entities to the Entity List, bringing the total to 68. Recent additions to the UFLPA Entity List are discussed in this Ropes & Gray post.
The updated Strategy indicates that expansion of the Entity List will be facilitated by improvements to the FLETF's internal process for developing and considering recommendations for additions to the Entity List. As part of its enforcement plan, the FLETF will prioritize examination and review of entities within high-priority sectors for possible inclusion on the Entity List.
The FLETF's expansion of the UFLPA Entity List will include a focus on entities that involve "more complex relationships" due to the lack of visibility into PRC supply chains. This will include entities that export goods produced by entities in the XUAR that produce goods with forced labor or that work with the XUAR government to recruit, transport, transfer, harbor or receive forced labor of XUAR groups identified as persecuted by the U.S. government.
As noted in the updated Strategy, in 2023, the DHS Office of Strategy, Policy, and Plans – which takes a leading role in advancing the FLETF's UFLPA-related processes – instituted a dedicated Entity List Team that is responsible for identifying, researching and recommending entities for addition to UFLPA Entity List.
Expanded Use of Technology and Other Systems Enhancements
The updated Strategy indicates that the FLETF continues to pursue new technology and new methods to identify companies for inclusion on the UFLPA Entity List. In 2023, the Bureau of International Labor Affairs began piloting use of supply chain tracing and research technologies to facilitate review of UFLPA Entity List recommendations.
In addition, CBP continues to develop, refine and deploy improved technology and analytical modeling to strengthen its enforcement of the UFLPA. According to the updated Strategy, these resources include targeting tools for global supply chain maps for entities, facilities, products and shipments that highlight where product supply chains have links to the XUAR and forced labor worldwide.
The updated Strategy indicates that, in the coming year, CBP will increase its capabilities to include UFLPA-specific modifications to the Automated Commercial Environment, the Seized Asset and Case Tracking System and Advanced Trade Analytics Platform to improve analytical modeling of supply chains and threat indicators of evasion. Additionally, CBP will provide analytical and technical capabilities support to the FLETF to facilitate entity analysis and additions to the UFLPA Entity List.
CBP also will implement system enhancements that will allow it to strengthen its UFLPA enforcement mission by broadening targeting and screening across the tariff schedule and in high-risk environments (i.e., de minimis and postal). It also intends to increase audits of potential UFLPA violators to increase identification of illicit actors and illegal transshipment schemes.
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