By: William F. Bresee, Esq.
At the end of July 2023, the Forced Labor Enforcement Task Force (“FLETF”), chaired by the U.S. Department of Homeland Security, published an updated strategy for the Uyghur Forced Labor Prevention Act (“UFLPA”). The FLETF is required to publish annual updates to its UFLPA Strategy, and the 2023 update principally addresses three areas: the requirements of the UFLPA Entity list, interagency coordination and resource allocation, and continued collaboration with non-governmental organizations (“NGOs”) and private sector entities.
The UFLPA went into effect on June 21, 2022, and established a rebuttable presumption that all merchandise coming from the Xinjiang region in the western area of China is a product of forced labor. The UFLPA encompasses all raw material and finished merchandise coming from the region and does not include a de minimis content provision.
While the UFLPA strategy remains largely the same, one change to the enforcement plan is that Withhold Release Orders (“WROs”) will not be issued on goods subject to the UFLPA because goods coming from the Xinjiang region or made with components manufactured there are already prohibited from entering the United States. Under 19 U.S.C. 1307, U.S. Customs and Border Protection (“CBP”) already has authority to “detain, seize, or exclude goods produced with forced labor, as well as to issue civil penalties against those who facilitate such imports.” In its annual update, the FLETF emphasizes that it remains “committed to combating forced labor and ensuring global supply chains remain free and clear of goods produced with forced labor.”
The FLETF 2023 update does not formally expand the list of high-risk sectors. Appendix B of the update does, however, list “products mined, produced, or manufactured wholly or in part by each entity” on the UFLPA entity list. In addition to polysilicon, tomatoes, and cotton, the entities on the UFLPA Entity List are manufacturers of electronics, hair products, laser printers, and PVC, among others.
The FLETF acknowledged that further products and sectors are being monitored for UFLPA forced labor concerns due principally to NGO and private sector research into forced labor supply chains. These sectors include red dates, vinyl products, aluminum, steel, batteries, electronics, and automobile components.
ADDITIONS TO THE ENTITY LIST
On August 2, 2023 – one week after the release of the updated UFLPA strategy – the FLETF expanded the UFLPA Entity list by adding two entities and one subsidiary to section 2(d)(2)(B)(ii) of the list. These entities, Camel Group Co., Ltd. and Chenguang Biotech Group Co., Ltd., and its subsidiary, Chenguang Biotechnology Group Yanqi Co. Ltd., are manufacturers in the car batteries and plant extract industries.
In view of the updated 2023 UFLPA strategy and the updates to the UFLPA Entity List, it is apparent that the FLETF continues to target new sectors for forced labor enforcement. Prior to the above additions, four entities had been added to the UFLPA Entity List since the UFLPA went into effect in June 2022.
CBP ADMINISTRATION & ENFORCEMENT
CBP’s efforts to prohibit entry into the United States of products from the Uyghur region of China cast a wide net over imports from countries including China, Malaysia, Vietnam, Thailand, and Mexico. According to the Uyghur Forced Labor Statistics Dashboard, to date in 2023, 3,529 shipments, with an aggregate value over $1.2 billion, have been detained by CBP under the UFLPA. As CBP detention, review and enforcement action continues to be refined, importers should map their supply chains to point of origin for the products they import into the United States to avoid detention or seizure of products and merchandise under the UFLPA.
For any further analysis of how this decision will affect interests related to supply chain matters, or if you have any questions relating to this article, please contact William F. Bresee.
William F. Bresee is a Partner with Leech Tishman and West Coast Co-Chair of the firm’s Construction Practice group and leads the Energy & Natural Resources Industry Group. He is based in the Los Angeles office and can be reached at 626.796.4000 or wbresee@leechtishman.com.
