United States: Import Best Practices Under New Uyghur Forced Labor Law

On Dec. 23, 2021, President Joe Biden signed the Uyghur Forced Labor Prevention Act, or UFLPA, into law.¹

The act's stated purpose is:

It does so by targeting forced labor in China through multiple means, including by mandating broad prohibitions on the importation of all goods from Xinjiang.

Now it is more critical than ever for companies to know and document every step of their supply chains, to ensure that forced labor is not involved at any point.

Presumption Prohibiting Entry of All Items From Xinjiang

Of greatest significance for companies importing goods into the U.S., Section 3 of the act requires that the commissioner of U.S. Customs and Border Protection apply a presumption that forced labor was involved in the production of "any goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part" in Xinjiang, or produced by Xinjiang entities, which the Forced Labor Enforcement Task Force — established under the U.S.-Mexico-Canada Agreement Implementation Act — will identify.²

Upon implementation of the act, importers of record need to be prepared to overcome this presumption with clear and convincing evidence that their supply chains do not involve Xinjiang forced labor.

While Section 307 of the Tariff Act prohibits importing any product that was mined, produced or manufactured wholly or in part with forced labor, CBP has historically implemented this provision through the identification of company-specific withhold release orders or by findings of forced labor.

Recent exceptions to this targeted practice include a broad withhold release order issued in January 2021 on all cotton, tomatoes and downstream products manufactured in whole or in part in Xinjiang, and the presumption, under Section 321(b) of the Countering America's Adversaries Through Sanctions Act, or CAATSA, that all North Korean labor is forced labor.

The newly enacted legislation essentially serves to broaden an existing presumption applicable to Xinjiang cotton and tomato products to all products from Xinjiang.

However, unlike the CAATSA-based North Korea presumption, which prohibits any item produced by North Korean nationals or citizens, regardless of whether they are made in North Korea, the act's Xinjiang-based presumption is geographically limited to goods from Xinjiang and to certain Xinjiang entities.³

Overcoming the Presumption of Xinjiang Forced Labor

As with withhold release orders, the act allows importers to overcome the presumption of forced labor applicable to items from Xinjiang if they can prove by clear and convincing evidence that the item in question was not the product of forced labor.

Specifically, the act allows an exception where the CBP commissioner determines that the importer has shown by "clear and convincing evidence that the good, ware, article, or merchandise was not mined, produced, or manufactured wholly or in party by forced labor," and that the importer of record has:

1. Fully complied with all guidance regarding diligence, goods and evidence issued by the task force; and
2. Responded to all inquiries for information regarding whether the item is the product of forced labor.

Whenever the CBP commissioner makes such an exception to the act's presumption that goods aren't allowed, the commissioner must, within 30 days, submit a report to certain congressional committees and the public, identifying both the excepted good and the relied-upon evidence.

Once implemented, such reports may provide helpful insights to importers seeking to overcome the act's Xinjiang forced-labor presumption.

Additional Steps to Prevent Entry of Items Produced With Forced Labor in China

Several other provisions of the act also aim to ensure that items produced using forced labor in China do not enter the U.S.

Under Section 2 of the act, the task force will take a number of steps toward this end:

• Within 30 days after enactment of the UFLPA, the task force will solicit public comment on how to ensure items produced as a result of forced labor anywhere within China are not imported into the U.S. Businesses will have the opportunity to provide input into this process.
• Within 45 days after the close of the above comment period, the task force will conduct a public hearing and invite witnesses to testify regarding the use of forced labor in China and potential measures to prevent the importation of items resulting from such forced labor into the U.S.

Footnotes

1 Uyghur Forced Labor Prevention Act, 117th Congress (2021-2022), Library of Congress, https://www.congress.gov/bill/117th-congress/house-bill/6256/text.

2 Establishment of the Forced Labor Enforcement Task Force Under Section 741 of the United StatesMexico-Canada Agreement Implementation Act, 85 Fed. Reg. 30587, https://www.federalregister.gov/documents/2020/05/20/2020-10993/establishment-of-theforced-labor-enforcement-task-force-under-section-741-of-the-united-states-.

3 Countering America's Adversaries Through Sanctions Act FAQs, U.S. Department of Homeland Security (Feb. 11, 2021), https://www.dhs.gov/news/2021/02/11/countering-america-s-adversariesthrough-sanctions-act-faqs#:~:text= CAATSA%20Section%20321(b)%20provides,the%20evidence%2C%20and%20generally%20means.

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Originally Published by Law360

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