A bipartisan group of lawmakers is looking for ways to help U.S. Customs and Border Protection further toughen its enforcement of a forced labor-related ban on certain imports from China. A congressional hearing is planned for this month and the lawmakers said they are considering additional legislative efforts as well.
The Uyghur Forced Labor Prevention Act establishes a rebuttable presumption that goods made wholly or in part in China’s Xinjiang Uyghur Autonomous Region are made with forced labor and are therefore excluded from entry into the U.S. The Forced Labor Enforcement Taskforce has identified tomatoes, cotton, and polysilicon-based products as high-priority sectors for UFLPA enforcement. Even companies not importing directly from China may have goods detained if the materials used to produce those goods in a second country are tied at any level to the XUAR or specific entities or commodities associated with forced labor in China.
In an April 11 letter, members of the Congressional-Executive Commission on China told FLETF chair Robert Silvers that while they believe enforcement of the UFLPA is “putting substantial political and economic pressure on the government of [China] and forcing global corporations to investigate and disclose supply chains,” they also want to empower further enforcement efforts, including by addressing challenges with respect to the following issues.
Detentions. According to the letter, the UFLPA requires CBP to report to Congress whenever cargo is released for entry after having been stopped due to evidence or reasonable suspicion of links to the XUAR or the forced labor of Uyghurs and other persecuted groups outside of the XUAR. However, the letter expressed concern that importers whose goods are detained are claiming that UFLPA does not apply and that these goods receive an applicability review that CBP does not believe needs to be reported. The lawmakers are seeking greater transparency about this review process and more clarity as to why goods stopped based on evidence of a link to the XUAR or labor transfer programs outside the XUAR are being cleared without congressional or public reporting. To this end they asked the FLETF to provide statistics on the unit/value of all goods from China that fall under high-risk sectors and the proportion of those goods that have been detained since June 2022.
Entity List. The lawmakers contend that UFLPA implementation requires a robust Entity List, questioned why the FLETF has not added more of the entities identified by civil society groups as being linked to the XUAR and forced labor to that list, and raised concern that the current process for adding to that list “is too bureaucratically cumbersome to allow for effective decision-making.” They therefore asked the FLETF to accelerate its efforts to expand the Entity List as soon as possible and to continually update this list during the year “utilizing fully the data provided by reputable civil society organizations.”
Transshipment. The letter asserted that transshipment from third countries is a major challenge in implementing the UFLPA and asked CBP to report on whether it needs additional resources, including tools and technology, to address this challenge. The letter also requested updates on whether CBP has prioritized particular countries for risk-based targeting of transshipments and whether Mexico and Canada are meeting their forced labor import obligations under the U.S.-Mexico-Canada Agreement.
De Minimis Imports. The lawmakers said they are contemplating legislative action to address the Section 321 “loophole,” which allows CBP to admit qualifying goods duty- and tax-free (and with fewer information requirements) provided they are imported by one person on one day and have a total fair market value of $800 or less. They raised concerns that this provision has made it harder to enforce the UFLPA and asked for more information about how CBP is addressing this issue amid increasing use of direct-to-consumer business models.
Sandler, Travis & Rosenberg has a robust program to assist companies on forced labor issues. ST&R also maintains a frequently updated web page offering a broad range of information on forced labor-related efforts in the U.S. and around the world. For more information, please contact ST&R at supplychainvisibility@strtrade.com.
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