Uyghur Forced Labor Prevention Act (UFLPA) and What You Need to Know?
On June 16, 2022, CBP held a webinar on the Uyghur Forced Labor Prevention Act (UFLPA). The UFLPA goes into effect June 21, 2022 so it is critical that importers are proactive about forced labor compliance in preparation for this implementation. During the webinar CBP discussed their recently published an operational guidance for importers. This blog article provides an overview of CBP’s current enforcement environment and how UFLPA will change CBP’s enforcement procedures for imports generally, and specifically from the Xinjiang region. For general guidance on preventing the importation of goods produced with forced labor and how importers should audit their supply chain to ensure non-use of forced labor, please refer to our Bloomberg Law article, “U.S. Customs Targets Use of Forced Labor”.
Under Section 307 of the Tariff Act of 1930 (19 U.S.C. 1307), CBP derives the authority for preventing the entry into the U.S. market of products made with forced labor by investigating and acting upon allegations of forced labor in supply chains. CBP issues Withhold Release Orders (WROs) and findings to prevent merchandise produced in whole or in part in a foreign country using forced labor from being imported into the United States. CBP defines Forced labor as all work or service which is extracted from any person under the menace of any penalty for its nonperformance and for which the worker does not offer work or service voluntarily.
On December 23, 20221, President Biden signed into law H.R. 6256, as part of the United States’ commitment and deterrence efforts to secure U.S. supply chains from goods produced by forced labor. UFLPA (H.R. 6256) requires CBP to apply a rebuttable presumption that all imports of goods, wares, articles, and merchandise manufactured wholly or in part from the Xinjiang Uyghur Autonomous region of the People’s Republic of China, or by entities identified by the U.S. government on the UFLPA Entity List, are presumed to be produced with forced labor and are prohibited from entry into the United States.
This presumption applies to all goods made in, or shipped through, other countries that include parts made in Xinjiang. However, this presumption is rebuttable. To rebut this presumption, the importer of record will need to provide to CBP clear and convincing evidence that the goods were NOT produced using forced labor.
UFLPA and WRO’s
UFLPA will supersede current WROs related to Xinjiang for goods imported on or after June 21, 2022. The UFLPA does not require CBP to issue Withhold Release Orders and findings pursuant to the regulations promulgated under Section 307 of the Tariff Act. For more information regarding WRO’s please review our blog post and see our Bloomberg Law article, U.S. Customs Targets Use of Forced Labor. Shipments being imported on or after June 21, 2022 that are subject to the UFLPA, which previously would have been subject to a XUAR WRO, will be processed under UFLPA procedures, and detained, excluded, or seized, as mentioned in CBP guidance published on June 13th.
What does Clear and Convincing Evidence mean?
During the webinar CBP identified Customs Ruling H317249, specifically the “clear and convincing evidence” standard to prove that goods were not made with the use of forced labor. Under this standard, an importer would need to provide evidence that that the goods were NOT made with forced labor. In addition, importers must be aware and refer to importer guidance to be published by the Department of Homeland Security, as required by UFLPA Section 2(d)(6). Notwithstanding, on June 13,2022, CBP published a complementary guidance, prior to DHS’s publication, to assist importers in determining the type of documentation to present to CBP to rebut the presumption that the goods were made with forced labor.
Exception to the Rebuttable Presumption
An importer may request an exception from CBP. An exception would be a situation where an importer is saying that the goods contain goods made whole or in part in the Xinjiang, but there was no forced labor involved. In order to receive an exception an importer must fully comply with the guidance in Section 2D6 and CBP’s operational guidance for importers. Importers must also state that the importer is seeking an exception to the UFLPA presumption and provide appropriate documentation substantiating the request.
CBP Webinar on UFLPA
On June 16,2022, CBP hosted a webinar presented by Joane Colonnello, DHS-CBP Director and John Pickel DHS-Policy Expert. During the webinar, CBP Director explained the enforcement process and stated that any shipments that are subject to UFLPA will follow the typical detention under 19 U.S.C. 1499. Depending on the identified risk of the shipment, CBP will immediately detain, exclude, or seize shipments subject to the UFLPA rebuttable presumption. In addition, highlighted that under UFLPA the timeline to decide the protests is 30 days, if its not within 30 days, it is deemed denied and at that point the matter can be taken before the court of international trade. Lastly, CBP recommended importers to review prior published Xinjiang Supply Chain Business Advisories for guidance.
What Should You Do
DHS will be announcing the official importer guidance for UFLPA on June 21. However, in the meantime, you may refer to the operational guidance published by CBP and also the suggestions made in Bloomberg Law article, U.S. Customs Targets Use of Forced Labor, and prior DTL blog post. Additionally, in order to be able to demonstrate that you have used reasonable care with regards to forced labor, you must be able to answer these 12 questions.
At the bare minimum, we highly recommend you start by doing the following ASAP:
- Download the Sweat and Toil App
- Use the DOL’s “Sweat & Toil” free app to assess your forced labor risk. You can review risk by product category and country.
- Have a Written Code of Conduct
- Has the importer developed a written forced labor compliance plan for all of its foreign sourcing practices?
- Have you included language on your purchase orders, contracts, and other shipping documents that emphasize compliance with forced labor?
- Start your Supply Chain profile
- Do you have a complete understanding of your supply chain and where your goods are made?
- Internal Control Processes
- Do you have internal controls to ensure that your procurement team no longer sources goods from Xinjiang Province?
Diaz Trade Law has significant experience in a broad range of import compliance matters including forced labor issues. For assistance with importer due diligence in relation to forced labor requirements; or for assistance in submitting documents to dispute the use of forced labor, contact our Customs and International trade law attorneys at [email protected] or call us at 305-456-3830.