Background

The Department of Homeland Security announced July 9 that it has nearly doubled the number of high-priority sectors for enforcement of the Uyghur Forced Labor Prevention Act and is looking to further expand the UFLPA Entity List. These and other changes are detailed in an updated strategy on preventing imports of goods from China made with forced labor.

The UFLPA 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. 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.

DHS has previously designated apparel, cotton and cotton products, silica-based products including polysilicon, and tomatoes and downstream products as high-priority sectors for UFLPA enforcement. The department’s updated strategy adds aluminum, polyvinyl chloride, and seafood to that list.

According to DHS, entities in these sectors will be prioritized for review by the Forced Labor Enforcement Task Force for a variety of enforcement actions, such as inclusion on the UFLPA Entity List, export limitations, economic sanctions, and visa restrictions. DHS also suggests that importers focus their due diligence efforts on supply chains that intersect with these sectors.

UFLPA Entity List

The updated strategy also highlights an intent to continue to expand the UFLPA Entity List, which has been significantly broadened over the past year and currently comprises 68 entities in sectors like agriculture, batteries, electronics, food additives, household appliances, non-ferrous metals, plastics, and textiles. Products of these entities are subject to the UFLPA’s rebuttable presumption and therefore excluded from entry into the U.S.

According to the strategy, the FLETF has prioritized expansion of the UFLPA Entity List “with a focus on entities that egregiously and openly engage in behavior prohibited by the UFLPA,” such as sourcing material from the XUAR. However, the task force is also “initiating reviews of potential candidates … that involve more complex relationships due to the lack of visibility into [Chinese] supply chains,” including entities that export products made, produced, or manufactured with forced labor. Further, the FLETF “continues to pursue new technology and new methods” to identify companies under each of the UFLPA Entity List’s four sub-lists.

A DHS fact sheet asserts that these and other enforcement efforts are having an impact, specifically by increasing the diversification of supply chains away from China and toward more trusted trading partners as U.S. importers enhance their due diligence programs to ensure compliance with the UFLPA. The fact sheet specifically cites textiles and apparel and PVC as sectors in which U.S. imports have declined.

Sandler, Travis & Rosenberg offers a comprehensive suite of services to help companies address forced labor concerns throughout the world. 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 globe. For more information, please contact ST&R at supplychainvisibility@strtrade.com.

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