Importing from China? What You Need to Know to Comply with the Uyghur Forced Labor Prevention Act

The United States has worked diligently in recent years to publicly denounce human trafficking, address violations of human rights, and prevent the importation of goods produced from forced labor.[1] In 2021, the Uyghur Forced Labor Prevention Act (UFLPA) was passed by Congress in efforts to ensure that goods made with forced labor in the Xinjiang Uyghur Autonomous Region (XUAR) do not enter the United States market.[2] Like many acts of Congress, the UFLPA is substantially broader than its name, and covers almost any product being exported from China, not just those coming from Xinjiang. If you are entity importing products from China at any point, the UFLPA almost certainly applies to you. To make sure you’re in compliance, here’s what you need to know:

Among other things, UFLPA instructed the Forced Labor Enforcement Task Force (FLETF) to develop a strategy to enforce the Tariff Act of 1930 and end forced labor practices through all means available.[3] Under the UFLPA, if a good is found to be the product of forced labor in the XUAR or from any entity listed by the Department of Homeland Security (DHS) or Customs and Border Protection (CBP), an importer is presumed to be in violation of the Tariff Act of 1930, 19 U.S.C. § 1307.[4] When the FLETF published its strategy on June 17, 2022, it included input from many public and private stakeholders on topics such as (1) the risk of importing goods mined, produced, or manufactured with forced labor in China, (2) an evaluation of forced-labor schemes, (3) additional resources to ensure no forced labor goods enter US ports, and (4) guidance to importers.[5] The scope of this article will focus on the fourth prong.

Although the CBP applies a presumption that any goods found to be the product of forced labor under entities on the UFLPA Entity List are in violation of the Tariff Act, this is rebuttable so long as the importer requests an exception on the grounds that there is clear and convincing evidence that its imports were not “mined, produced, or manufactured wholly or in part with forced labor.”[6]

This raises the obvious question: what is a good that is “manufactured or produced, wholly or in part?” More importantly, what is “forced labor?” The UFLPA adopted the Tariff Act’s definition of forced labor, which is broadly described as “all work or service which is exacted from any person under the menace of any penalty for its nonperformance and for which the worker does not offer himself voluntarily…[including] forced or indentured child labor.”[7] Although the Act itself does not provide a clear definition for “manufactured or produced, wholly or in part,” the CBP provides some guidance on this in its ruling regarding convict labor.[8]

In HQ 115676, CBP ultimately adopted this standard: (1) the application of labor to a product, either by hand or mechanism, does not necessarily make an article “manufactured,” and (2) for a product to be “manufactured,” there must be a such a transformation that results in a new, different article—that is, the new article must have a “distinctive name, character, or use.”[9] In simpler terms, for a product to be “manufactured” under forced labor, there must be a person who does not consent to producing such labor (but does so anyway) and, as a result of that labor, creates a distinctive product in comparison to the materials he started out with.

However, a cautious importer would not attempt to fit in the “transformation” gap, and would instead require confirmation of no forced labor at any stage of the product’s creation and importation, including shipping and transportation. Further, an importer further down the chain of importation, i.e., not the importer of record, is still required to comply with UFLPA and faces potential fines and seizure of product for failure to do so. So, regardless of the stage of importation, you should be demanding proof of no forced labor. To provide further guidance, the DHS published a UFLPA entity list containing an extensive record of facilities in Xinxiang that mine, produce, or manufacture wholly or in part any goods that result from forced labor.[10] If you are an importer of Chinese products, you must ensure that your supply chains do not contain any of these entities.

Additionally, the FLETF put forth several guidelines for importers to follow in overcoming the rebuttable presumption of first labor. First, the importer must have an effective due diligence system in place, which includes (1) engaging with stakeholders and partners, (2) identifying places in supply chains where goods are at risk of being made with forced labor, (3) developing a code of conduct of supply-chain standards, (4) communicating across the entire supply chain, (5) monitoring compliance with the code of conduct set forth, and (6) remediating violations, among other things.[11] Second, the importer must provide evidence demonstrating that a good is not mined, produced, or manufactured in Xinxiang, although the extent of this evidence will largely vary based on the facts and circumstances in question.[12] Examples of this are details of the entire supply chain, as well as information indicating the provenance of each component of the good in question. Thirdly, there must be evidence showing that a good originating anywhere in the China was not mined, produced, or manufactured by forced labor, the extent of which will also vary based on the importer.[13] This might include indicators of forced labor, a map of the entire supply chain, wages paid, and the residency status of each worker.

Although the above guidelines are certainly helpful in overcoming the UFLPA’s rebuttable consumption, the Act is still largely in its infancy and does not yet contain a uniform set of standards for importers to abide by in ensuring their compliance. As it stands, adhering to the above recommendations and straying from entities on UFLPA’s list certainly serve as a decent foundation for preventing any potential violations of the Act.

If you an importer or exporter seeking to bring in Chinese goods or merchandise and need assistance complying with the UFLPA, or any other customs issues, please do not hesitate the experienced attorneys at Eckland & Blando, LLP.