Yesterday U.S. Customs and Border Protection (CBP) released "operational guidance" to prepare importers and the trade community for CBP's aggressive enforcement of the Uyghur Forced Labor Prevention Act (UFLPA) beginning on June 21, 2022. Importers should review the document to familiarize themselves with CBP's UFLPA procedures, enforcement priorities, and administrative appeals processes. We provide a summary of the key points below.
CBP operational guidance identifies enforcement priorities and appeals processes
The UFLPA requires CBP to apply a presumption that any goods made wholly or in part in the Xinjiang Uyghur Autonomous Region (XUAR) are the products of forced labor. Visibility on this issue is high, and enforcement of the UFLPA and prohibitions against forced labor imports will remain a key priority for CBP.
Cotton, polysilicon, and tomatoes are specifically identified in the operational guidance. Importers of such products - or any other goods with a high-risk of forced labor - should prepare for aggressive CBP enforcement. CBP's operational guidance instructs that importers should be prepared to provide significant supply chain documentation. This includes, but is not limited to:
- Complete production records and transaction documentation for each step of the production process for a particular shipment.
- Full supply chain mapping and traceability.
- A list of all entities associated with each step of the production process, with citations denoting the business records used to identify each upstream party with whom the importer did not directly transact.
This list is not exhaustive, and additional documentation may be required. Nonetheless, the guidance document represents CBP's most detailed comments to-date on the UFLPA implementation and enforcement. CBP intends that its operational instructions will compliment additional, forthcoming guidance from the U.S. Department of Homeland Security (DHS) that is due no later than June 21, 2022.
UFLPA requires CBP to detain shipments made wholly or in part with forced labor
The UFLPA was signed into law on December 23, 2021, to strengthen existing import prohibitions against goods made with forced labor, especially in the Xinjiang Uyghur Autonomous Region (XUAR) and elsewhere in China. The law establishes a rebuttable presumption that any goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in the XUAR, or produced by certain entities identified under the UFLPA (the "UFLPA Entity List" - not yet available), are the products of forced labor. Entry of such products to the United States is prohibited, unless the importer demonstrates to CBP by clear and convincing evidence that the products were not produced using forced labor. CBP will begin enforcement on June 21, 2022.
Importers must consult the UFLPA's forthcoming Strategy to Prevent the Importation of Goods, Minded, Produced, or Manufactured with Forced Labor in the People's Republic of China (UFLPA Strategy) to fully comply with the new law. This document is not yet available, but will be published by DHS no later than June 21, 2022, which is also the effective date of the rebuttable presumption. The UFLPA Strategy will also include the first publication of the UFLPA Entity List.
CBP operational guidance suggests that the agency will aggressively work to identify, detain, exclude, and/or seize shipments subject to the UFLPA's rebuttable presumption. Shipments connected to the XUAR or the UFLPA Entity List are enforcement priorities.
There are no de minimis exceptions, which means any level of content/input produced in the XUAR will make an entire product subject to the rebuttable presumption and subject to detention by CBP.
CBP guidance on detained shipments
If CBP suspects that a shipment is subject to the UFLPA rebuttable presumption, CBP's operational guidance states that CBP will decide whether to detain the shipment within five days of examination (excluding weekends and holidays). Merchandise that is not released within the five-day period will be considered detained. However, importers may seek permission from the port director to reexport detained shipments at any point prior to exclusion or seizure.
If a shipment is detained, the CBP's operational guidance describes an appeals process for overcoming the UFLPA's rebuttable presumption of forced labor:
- Notification to importer. CBP will notify the importer if a shipment is detained. CBP's detention notice will include the reason for the detention, anticipated length of the detention, and instructions for submitting information to CBP to rebut the UFLPA presumption. Importers will have 30 days to respond to the detention notice; and CBP will attempt to prioritize responses from Customs Trade Partnership Against Terrorism (CTPAT) Trade Compliance members. It is still unclear if CBP will provide other benefits to participants in CBP "trusted trader" programs. CBP will provide similar notices for shipments subject to exclusion or seizure; and administrative appeals will be available.
- Requesting an "exception." Rebutting the UFLPA presumption against a detained shipment will require that CBP approve a request for "exception" from the UFLPA. The request must be filed by the importer, and must provide clear and convincing evidence that the detained shipment was not produced wholly or in part by forced labor. CBP's non-exhaustive list of the types of information required include:
- Due diligence system information (e.g., supplier engagement, code of conduct, mapping, training, monitoring).
- Supply chain tracing information from raw materials to imported goods
- Supply chain management measures (e.g., an importer's internal controls and operating system)
- Evidence that imported goods were not made with forced labor (e.g., worker information at each stage of production, labor audits)
- Public and Congressional notification. CBP has not set a timeline for how long it will take to respond to requests for exceptions. However, the exception process is public. The UFLPA requires that CBP, not later than 30 days after granting an exception, (1) notify Congress and (2) make available to the public a report identifying the good and the evidence considered in granting the exception.
Going forward, importers should continue their proactive measures to review their supply chains as we approach June 21, 2022. At a minimum, this should include an assessment of whether imports include merchandise, or components thereof, that are sourced in whole or in part from the XUAR region.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.