Was your shipment one of the almost 4,300 to be detained by U.S. Customs and Border Protection (CBP) for UFLPA enforcement since last June? If not, great! But don’t get too comfortable, either. UFLPA isn’t going anywhere, and perhaps rightfully so. This isn’t an enforcement deliberately meant to hurt U.S. importers. Instead, it boils down to something more like civic duty and generally being a nice human. That’s because the goal of UFLPA is to curb (or even abolish) the use of forced labor to cultivate, make or produce goods for the rest of the world.
What is UFLPA?
The Uyghur Forced Labor Prevention Act (UFLPA) became effective in June 2022. This new law led to a task force to develop a strategy to help support this enforcement. This task force is known as the Forced Labor Enforcement Task Force (FLETF). UFLPA puts a prohibition on the importation of goods into the United States that are manufactured wholly, or in part, with forced labor in the People’s Republic of China, specifically from the Xinjiang Uyghur Autonomous Region (or Xinjiang). We previously covered the new law in our blog here.
Some specific commodities were spelled out as a priority that are subject to this enforcement. These include tomatoes, polysilicon, and cotton. This doesn’t mean that other commodities are not subject to UFLPA, but these have been the biggest offenders of using forced labor and the most targeted. Technically, any good that comes from the Xinjiang region is subject to UFLPA.
I received a detention letter, now what?
As an importer, you have a couple of options. You could send the shipment back or review your supply chain and provide clear and concise evidence that nowhere in your supply chain does forced labor exist. If you choose the latter option, then the clock is ticking. CBP gives an importer 30 days to respond to the letter. However, you can ask for an extension if you are making a good faith effort to get the information and trace your supply chain back to its source to prove that no forced labor was used. Don’t just accept a signed document from a supplier as proof that they don’t use forced labor.
CBP has provided a wealth of information to assist importers with navigating UFLPA, including an operational guidance document for importers and best practices for applicability reviews. Double check the UFLPA entity list as well. Many new companies are being added to the list all the time.
But wait, I don’t import from China…
Just because your shipment doesn’t come directly from China, doesn’t mean it won’t be held for UFLPA. The countries where most shipments have been held so far are from Malaysia and Vietnam. Focusing on companies just from the Xinjiang Uyghur Autonomous Region would make this enforcement easy. It isn’t just about those companies. It’s also about the companies that those in the region supply or even maintain ownership over. It’s looking at the third, fourth or fifth company back in your supply chain. For example, let’s take your supplier of sweaters in Vietnam. Where did they obtain the yarn to make the sweaters? Where did their supplier get the cotton that was used to make the yarn? And so on.
Instead of waiting to receive a detention letter from CBP that your shipment has been held for UFLPA, be proactive and do your due diligence. Start reviewing your supply chain now, and get to know your suppliers. Understand where they source materials from, and how this contributes to your finished good. Don’t put blinders on when you review your supply chain. Expand your search as far back as you can to ensure that you don’t have any risks or concerns that would delay your import shipment.
If you find a risk in your supply chain, then de-couple from that supplier and find another one. There have been some Chinese companies that are even distancing themselves from that region.
Once you’ve processed the five stages of grief with UFLPA (Denial, Anger, Bargaining, Depression and Acceptance), you’ll start to realize this law is a good one. Other countries are beginning to see this as an issue that shouldn’t be ignored. For example, Canada and Mexico aligned with the United States on forced labor when USMCA was under negotiations, and it was adopted by both countries.
The United States developed child labor laws a long time ago, but unfortunately in some parts of the world, they don’t have those same standards. Instead, they choose to use and force children and other people to work under deplorable conditions and for minimal pay. The United States decided to take a stand and prohibit the entry of goods that are made in this way. Take a deep breath! That’s a good thing, right?
Don’t let your import compliance go by the wayside and take a back seat to your day-to-day operations. Do you need to re-evaluate your import compliance program? (Do you even have one?)
We are here for you and can provide the resources and training you need. Schedule a no-charge consultation and let’s get started today!
Shawna Karajic is a Senior Consultant for Export Solutions -- a full-service consulting firm specializing in U.S. import and export regulations.