A new dashboard made available by U.S. Customs and Border Protection offers interesting insights on the agency’s enforcement of the Uyghur Forced Labor Prevention Act to date.
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. All businesses with products whose supply chains include Chinese materials should understand both CBP’s importer guidance and the related enforcement strategy and ensure that they are being implemented into their business operations. 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.
The Forced Labor Enforcement Taskforce has identified tomatoes, cotton, and polysilicon-based products as high-priority sectors for UFLPA enforcement, but CBP states that it uses a dynamic, risk-based approach to enforcement that prioritizes actions against the highest-risk entities based on an ever-changing data and intelligence environment. These include (1) entities involved in the production and/or exportation of goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in the XUAR, (2) entities affiliated with the Xinjiang Production & Construction Corps, (3) entities on the UFLPA Entity List, and (4) goods produced in or shipped through third countries if they contain inputs mined, produced, or manufactured in the XUAR or by an entity on the UFLPA Entity List. CBP states that due to the complexity of supply chains and risk factors, some industries may be considered high-risk and become subject to UFLPA enforcement actions more than others considered to be at lower risk.
In its new dashboard CBP provides aggregate statistics on the number and value of shipments stopped for UFLPA enforcement as well as the industries and countries of origin most affected. Highlights of the most recent statistics include the following.
- The number of stopped shipments fell from 1,491 in the fourth quarter of fiscal year 2022 to 940 in the first quarter of FY 2023 and is on pace to decline further in the second quarter of FY 2023 (standing at 764 as of March 3). The value of such shipments during these periods has declined as well, from $464.9 million to $304.7 million to $183.8 million.
- Of the 3,237 total shipments stopped since CBP began enforcing the UFLPA, 1,090 (33.7 percent) have been released, 424 (13.1 percent) have been denied, and 1,723 (53.2 percent) are pending. Those figures are 38.9 percent, 18.5 percent, and 42.6 percent for the most recently completed quarter.
- Electronics has been the industry sector with the most stopped shipments overall with 1,627, followed by apparel, footwear, and textiles at 631 and industrial and manufacturing materials at 422. In the current quarter CBP has stopped 282 shipments in the industrial and manufacturing materials sector, 204 in electronics, and 135 in apparel, footwear, and textiles.
- More than half the value of all stopped shipments to date (51.1 percent) has come from imports from Malaysia, followed by 38.5 percent from Vietnam and 9.3 percent from China. However, China accounts for the largest number of stopped shipments at 36.0 percent, followed by Vietnam at 34.2 percent and Malaysia at 28.6 percent.
- All of the stopped shipments to date from Malaysia have been in the electronics sector. For Vietnam, 60.0 percent have been in electronics, 23.8 percent have been in apparel, footwear, and textiles, and 16.1 percent have been in industrial and manufacturing materials. For China, 29.6 percent have been in apparel, footwear, and textiles, 20.9 percent have been in industrial and manufacturing materials, and 16.7 percent have been in agriculture and prepared products.
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 email@example.com.
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