Under a new law the United States will ban imports of all goods made in whole or in part from any good from the Xinjiang Uyghur Autonomous Region in China, effective June 21, 2022. Companies need to use the next 180 days to ensure their supply chains do not include such goods.
President Biden signed into law Dec. 23 the Uyghur Forced Labour Prevention Act, which effectively deems all goods mined, produced, or manufactured in the XUAR to be produced by forced labour in China. Even those not importing directly from China may have goods detained if the materials used to produce the imported goods in a second country are tied at any level to XUAR or specific entities or commodities associated with forced labour in China.
Under this law, imports of goods from the XUAR will be banned unless United States Customs and Border Protection determines that:
- the importer of record has fully complied with relevant guidance to be provided by CBP, as well as any regulations issued to implement that guidance;
- the importer has completely and substantively responded to all inquiries for information submitted by CBP to ascertain whether the goods were made wholly or in part with forced labour; and
- by clear and convincing evidence, the goods were not made wholly or in part by forced labour.
Any good from the XUAR that thus overcomes the rebuttable presumption of being made with forced labour will be included in a public list to be issued by CBP 30 days after making such determination.
Further, an interagency Forced Labour Enforcement Task Force will have to develop a strategy to prevent the importation of forced labour goods from China along with the following lists:
- entities in the XUAR that produce goods with forced labour
- entities working with the government of the XUAR to recruit, transport, transfer, harbour, or receive forced labour or Uyghurs, Kazakhs, Kyrgyz, or members of other persecuted groups out of the XUAR
- products made wholly or in part by such entities
- entities that exported products made with forced labour from China to the United States
- facilities and entities, including the Xinjiang Production and Construction Corps, that source material from the XUAR or persons working with the government of the XUAR or the XPCC for purposes of poverty alleviation program or pairing-assistance program or any other government labour scheme that uses forced labour
The Task Force must seek public input no later than Jan. 24, 2022, and the public will be given no less than 45 days to submit comments. A public hearing must be held within 45 days after the close of the public comment period.
The State Department must then submit a report to Congress by March 23, 2022, that provides a strategy to address forced labour in the XUAR along with lists of (1) entities in China or affiliates that use or benefit from forced labour in the XUAR and (2) foreign persons that acted as agents of such entities or affiliates to import goods into the United States The final strategy to be developed by the Task Force must be in place by June 21, 2022.
Importantly, the UFLPA calls for the Task Force to provide guidance to importers with respect to the following:
- due diligence, effective supply chain tracing, and supply chain management measures to ensure they do not import any goods made with forced labour from mainland China and especially from the XUAR
- the type, nature, and extent of evidence that demonstrates that goods originating in mainland China were not made wholly or in part in the XUAR
- the type, nature, and extent of evidence that demonstrates that goods originating mainland China, including goods detained or seized pursuant to Section 307, were not made wholly or in part with forced labour
Sandler, Travis & Rosenberg, P.A., has developed a program to help companies review their supply chain visibility. The STR program first provides a stocktaking of procedures, policies, and programs in place to evaluate the level of due diligence and reasonable care. Next is testing and tracking to review a shipment to determine if the procedures in place can timely provide the necessary documents to CBP to rebut a claim of forced labour. Finally, CBP will assist in responding to any CBP-issued detentions.
For more information on ST&R’s import compliance reviews and how they can benefit your company, please contact Charles L. Crowley at (914) 433-6178 [email protected].