ARTICLE
17 April 2024

UFLPA Enforcement Update

DT
Diaz Trade Law

Contributor

A boutique law firm with a track record of success, Diaz Trade Law has rapidly become one of the nation’s leading Customs and International Trade Law firms. Diaz Trade Law’s diverse team of attorneys specialize in all aspects of U.S. federal trade law, from compliance to resolution of urgent issues.
At CBP's 2024 Trade Facilitation and Cargo Security Summit ("the Summit") this week, panelists shared some pending developments in Uyghur Forced Labor Prevention Act ("UFLPA") enforcement.
United States International Law
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At CBP's 2024 Trade Facilitation and Cargo Security Summit ("the Summit") this week, panelists shared some pending developments inUyghur Forced Labor Prevention Act("UFLPA") enforcement. The UFLPA establishes a rebuttable presumption that the importation of any goods mined, produced, or manufactured, wholly or in part, in the Xinjiang region of China, or produced by an entity on the UFLPA Entity List, is prohibited under U.S. forced labor law.

Panelists indicated that "more than 10" new entities would be placed on theEntity Listin the coming months. The government has received criticism regarding the relatively low number of entities on the Entity List since the UFLPA was enacted in June 2022. While "more than 10" is still a relatively low number, given that the current Entity List is comprised of just 30 entities, ten-plus new entities would represent a significant increase.

Panelists also announced that new high-priority sectors for UFLPA enforcement would be identified in the near future. Currently, only cotton, tomatoes, and polysilicon are officially listed as high-priority sectors. Panelists re-affirmed that the Forced Labor Enforcement Task Force ("FLETF") – an interagency team led by the Department of Homeland Security – uses reports from Non-Government Organizations (NGOs), reporting from journalists, letters from Congress, and other sources to identify additional potential high-priority sectors. Panelists also appeared to agree that polyvinyl chloride ("PVC"), fish, and aluminum – sectors that have recently been tied to Uyghur forced labor in NGO and media reporting – were likely candidates for designation as high-priority sectors.

Importers of products in any newly-identified high-priority sectors are likely to receive increased scrutiny under the UFLPA, even if the products are not designated as "Country of Origin China" on entry. Since the UFLPA was enacted, by value, Malaysia has seen the highest number of shipments detained under the UFLPA, followed by Vietnam, Thailand, and, finally, China.1Importers should also remember that CBP is actively detaining shipments under the UFLPA across a wide variety of industries not designated as high-priority sectors. In fact, the industry with the highest number of UFLPA-related detentions since the UFLPA went into effect is Electronics. Industrial and manufacturing materials, consumer products, pharmaceuticals, machinery, and automotive and aerospace products have also seen many detentions under the UFLPA.2

The UFLPA requires the FLETF to provide annual updates to Congress regarding the UFLPA strategy, including any updates to the Entity List, plans for enforcement, and high-priority sectors. The 2023 update was published July 26, 2023, so we expect to see additions to the Entity List and newly identified high-priority sectors this summer, if not before.

It is clear that forced labor will continue to be a priority for CBP. Importers should prepare for increased scrutiny by investing in robust compliance programs that take into account the entire supply chain. Read more about specific steps you can take in our Bloomberg articlehereand read more about how to de-risk your supply chainhere.

Diaz Trade law has significant experience in forced labor compliance and enforcement mitigation. Get in touch with us atinfo@diaztradelaw.comfor assistance developing or updating your forced labor compliance plan.

More information on forced labor:

Footnotes

1 Id.

2 Uyghur Forced Labor Prevention Act Statistics,available atUyghur Forced Labor Prevention Act Statistics | U.S. Customs and Border Protection (cbp.gov)(statistics current as of March 1, 2024).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

ARTICLE
17 April 2024

UFLPA Enforcement Update

United States International Law

Contributor

A boutique law firm with a track record of success, Diaz Trade Law has rapidly become one of the nation’s leading Customs and International Trade Law firms. Diaz Trade Law’s diverse team of attorneys specialize in all aspects of U.S. federal trade law, from compliance to resolution of urgent issues.
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