New UFLPA Regulation Targets Forced Labor and Impacts Supply Chain Documentation

State-sponsored forced labor is widespread in the Xinjiang Uyghur Autonomous Region of China. As a means of protecting consumers from goods manufactured by forced labor, the US adopted and enacted the Uyghur Forced Labor Prevention Act (UFLPA). For the many businesses that conduct supply chain due diligence, understanding the distinction between how the act addresses the goods produced by forced labor is key.

The UFLPA addresses goods produced by forced labor in the Xinjiang Uyghur Autonomous Region in two distinct ways. First, the UFLPA assumes that any “goods, wares, articles, and merchandise mined, produced, or manufactured” are the product of forced labor unless “clear and convincing evidence” proves otherwise. This assumption of forced labor is referred to as a “rebuttable presumption.” This blocks all goods from the Xinjiang Uyghur Autonomous Region from entering the United States via Section 307 of the Tariff Act of 1930. Shipments from the Xinjiang Uyghur Autonomous Region may be detained and are subject to seizure and forfeiture by US Customs and Border Protection (CBP).

Second, the UFLPA requires adoption of a strategy to prevent the import of goods produced by forced labor in the Xinjiang Uyghur Autonomous Region from reaching the US. This strategy, developed by the Forced Labor Enforcement Task Force (as established by USMCA), features directions to companies on conducting due diligence concerning human rights and forced labor in order to show that items have not been sourced from the Xinjiang Uyghur Autonomous Region using forced labor.

Commodities of specific note for the UFLPA include cotton, polysilicon, and tomatoes. Although, this is not an exhaustive list of commodities.

QPoint’s Green Data Exchange (GDX) helps manage your supply chain by relating your company policies on goods manufactured by forced labor and by collecting evidence documentation showing due diligence and supplier engagement. US Customs and Border Protection may require details and data relative to certain goods. This evidence and supply chain documentation shows a due diligence system, supply chain tracing, and supply chain management. Furthermore, as traceability is part of this effort, you may receive requests from your customers to prove your products’ compatibility with this new regulation. With GDX, supplier evidence as to whether or not an item is produced, in part or wholly, in the Xinjiang Uyghur Autonomous Region is easy to collect, maintain, and report.