6 Steps U.S. Shippers Should Take to Evaluate Forced Labor in their Supply Chain

As the June 21, 2022, implementation date for the Uyghur Forced Labor Prevention Act (UFLPA) approaches, U.S. shippers should already be evaluating forced labor impact on the supply chain.

Officials from federal agencies, NGOs, and private sector entities cited several challenges related to the enforcement of Section 307, including limited traceability in supply chains and CBP’s approach to enforcement. CBP often cannot trace goods produced with forced labor overseas and imported into the United States because of the complexity of the goods’ supply chains.  Although identifying forced labor in the first and second tiers of products’ supply chains may be reasonably simple, identifying it in subsequent tiers has proved to be more of a challenge.

U.S. GAO Report to Congressional Committees: FORCED LABOR CBP Should Improve Communication to Strengthen Trade Enforcement

6 STEPS TO PREVENT FORCED LABOR IN SUPPLY CHAINS

1. Know the Warning Signs of Forced Labor

   • Avoid suppliers that…

     • Have poverty alleviation effort language;

     • Are located near/in Xinjiang internment camps, prisons and/or industrial parks;

     • Highlight education training centers, ethnic minority graduates, re-skilling vocational training or re-education;

     • Have high revenues but few employees;

     • Non-standard hiring practices, such as government recruiters.

2. Comply with U.S. Regulatory Controls

   • U.S. Department of Labor – Trafficking Victims Protection Reauthorization Act List

   • U.S. Department of the Treasury – Specially Designated Nationals and Blocked Persons List

   • U.S. Department of Commerce’s – Entity List

   • U.S. Customs and Border Protection – Withhold Release Order

3. Point of Origin to U.S. Supply Chain Tracing

   • CBP advises “supply chain maps that specify the locations of manufacturers, factories, farms, [and] processing centers” be provided for detained goods.

   • Mapping should be specific as CBP will investigate gaps in the process.

4. Employee Verification Reporting

   • Suppliers should be able to provide clear/transparent reporting for both existing and previous employee identification for discrepancies.

5. Forced Labor Policy

   • Ensure your company has a published standard addressing forced labor and minimum labor standards

   • Make sure all suppliers/providers receive a current and on-going copy

6. Audit, Audit, Audit

   • Unannounced third-party audits

   • Comprehensive on-site visits

UPCOMING CBP WEBINARS 

CBP’s Office of Trade Relations will host webinars on June 1, 7, and 16, 2022, to provide an overview of the Uyghur Forced Labor Prevention Act (UFLPA).

• Wednesday, June 1, 2022, 10:00 – 11:00 a.m. EDT – Registration
• Tuesday, June 7, 2022, 1:00 – 2:00 p.m. EDT – Registration
• Thursday, June 16, 2022, 2:00 – 3:00 p.m. EDT – Registration

19 INDUSTRIES MOST IMPACTED BY XINJIANG FORCED LABOR

List of industries in Xinjiang in which public reporting has indicated labor abuses may be taking place.

1. Agriculture (including such products as raw cotton, hami melons, korla pears, tomato products, and garlic)
2. Cell Phones
3. Cleaning Supplies
4. Construction
5. Cotton, Cotton Yarn, Cotton Fabric, Ginning, Spinning Mills, and Cotton Products
6. Electronics Assembly
7. Extractives (including coal, copper, hydrocarbons, oil, uranium, and zinc)
8. Fake hair and human hair wigs, hair accessories
9. Food processing factories
10. Footwear
11. Gloves
12. Hospitality Services
13. Metallurgical grade silicon
14. Noodles
15. Printing Products
16. Renewable Energy (polysilicon, ingots, wafers, crystalline silicon solar cells, crystalline silicon solar photovoltaic modules)
17. Stevia
18. Sugar
19. Textiles (including such products as apparel, bedding, carpets, wool, viscose)
20. Toys

U.S. Department of State: Risks and Considerations for Businesses and Individuals with Exposure to Entities Engaged in Forced Labor and other Human Rights Abuses linked to Xinjiang, China

BACKGROUND

The Uyghur Forced Labor Prevention Act (UFLPA) was signed into law by President Biden on December 23, 2021.

It establishes a rebuttable presumption that the importation of any goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in the Xinjiang Uyghur Autonomous Region of the People’s Republic of China, or produced by certain entities, is prohibited by Section 307 of the Tariff Act of 1930 and that such goods, wares, articles, and merchandise are not entitled to entry to the United States.

The presumption applies unless the Commissioner of U.S. Customs and Border Protection (CBP) determines that the importer of record has complied with specified conditions and, by clear and convincing evidence, that the goods, wares, articles, or merchandise were not produced using forced labor.

The UFLPA also requires the interagency Forced Labor Enforcement Task Force, chaired by the Secretary of Homeland Security, and in consultation with the Secretary of Commerce and Director of National Intelligence, to develop and submit to Congress a strategy for supporting CBP’s enforcement of Section 307 of the Tariff Act of 1930 with respect to goods, wares, articles, and merchandise produced with forced labor in the People’s Republic of China.

ADDITIONAL RESOURCES

• H.R. 6256 – Uyghur Forced Labor Prevention Act
• White House: Bill Signed: H.R. 6256
• DHS Press Release on UFLPA Public Comment Period

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