What You Need to Know
- Key takeaway #1The update emphasizes the broad scope of the Uyghur Forced Labor Prevention Act (UFLPA) by increasing the number of priority high-risk sectors to include polyvinyl chloride (PVC), aluminum, and seafood from the Xinjiang Uyghur Autonomous Region (XUAR) in China.
- Key takeaway #2Department of Homeland and Security (DHS) has requested $5.6 million in FY 2025 to fund 20 positions to help meet expanding operational requirements related to enforcement of the UFLPA.
- Key takeaway #3Cooperation increases between agencies and departments, as well as partnerships with non-governmental organizations to identify forced labor schemes. This includes information sharing, which could result in increased enforcement.
Uyghur Forced Labor Prevention Act (UFLPA)
Congress enacted the UFLPA on December 23, 2021 in response to alleged forced labor violations occurring in the People’s Republic of China. The UFLPA supports U.S. Customs and Border Protection’s (CBP) enforcement of Section 307 of the Tariff Act of 1930. The act aims to prevent the importation of goods sourced and/or made in whole or in part with forced labor from China into the US by imposing a rebuttable presumption that holds that any goods “mined, produced, or manufactured wholly or in part” in the XUAR or “produced by an entity on the UFLPA Entity List” are prohibited from import into the US. The UFLPA’ s rebuttable presumption went into effect on June 21, 2022.
The DHS-led Forced Labor Enforcement Task Force (FLETF) annually updates its UFLPA enforcement strategy. FLETF issued an update August 1, 2023 to aid CBP’s enforcement of the Act. Most recently, on July 9, 2024, FLETF released a 2024 update that refined and detailed several crucial aspects of the Act, which are critical for business compliance regarding human rights and forced labor screening.
On July 9, 2024, FLETF released a 2024 update that refined and detailed several crucial aspects of the Act, which are critical for business compliance regarding human rights and forced labor screening.
2024 Updates to the Forced Labor Task Force Strategy
Formally known as the 2024 Updates to the Strategy to Prevent the Importation of Goods Mined, Produced, or Manufactured with Forced Labor in the PRC, this strategy update introduces three main elements to the UFLPA enforcement framework.
- Defining and Evaluating Forced LaborThe update incorporates the International Labour Organization’s (ILO) broader definition of “state imposed forced labor” emphasizing state coercion and leverage. It highlights state practices such as:
- Targeting religious and ethnic minorities through policies imposing detention for refusing labor transfers;
- Mandating state agent recruitment and restricting freedom of mobility;
- Coercing or punishing individuals for their political or ideological views;
- Targeting religious and ethnic minorities in a discriminatory manner through state policies imposing detention as a consequence of refusing labor transfers;
- Mandating state agent recruitment and restricting freedom of mobility; and
- Coercing or punishing someone for holding certain political or ideological views.
- High-Priority Enforcement AreasThe update identified three new high-priority sectors for CBP enforcement: polyvinyl chloride (PVC), aluminum, and seafood in addition to the previously targeted apparel, cotton, silica and tomato sectors. The government’s selection of these sectors is based on “credible” evidence of forced labor and increases the number of entities on the UFLPA Entity List from 38 to 68, thereby broadening the Act’s reach.
- Enhanced Interagency EffortsThe FLETF seeks to provide more resources to agencies for effective enforcement. The update outlines the roles of various agencies, including DHS, CBP, the Department of State, the Department of Labor, the Treasury’s office of Terrorist Financing and Financial Crimes, the Office of the US Trade Representative and Homeland Security Investigations. It also emphasizes collaboration with non-governmental organizations and private sector entities to enhance public access to UFLPA information.
Enforcement
The FLETF will support CBP’s enforcement of the UFLPA by:
- Engaging with stakeholders to educate them on UFLPA requirements for imports and to emphasize human rights due diligence throughout all levels of a business’s supply chain;
- Providing resources including agency guidance and FAQ support;
- Prioritizing entity review within high-priority sectors to update the UFLPA Entity List; and
- Considering and using economic sanctions, visa restrictions, and export control measures in response to human rights violations.
Guidance
The Trade team at Crowell has put together a list of steps companies should consider carrying forth to meet due diligence requirements in a previous alert.
Looking Ahead
The 2024 UFLPA update underscores the increased resources the agencies are dedicating to combat the importation of goods made with forced labor with a connection to the Xinjiang region. As 2024 UFLPA enforcement statistics are trending downward ($212M worth of goods detained in January 2024 vs $38M detained in June 2024), it appears the government is increasing resources to target specific products in the last quarter of 2024 and beyond.
Crowell’s ESG and International Trade Groups continue to monitor these important developments and to evaluate the implications of the Executive Branch’s actions.
For further information, please contact:
David Stepp, Partner, Crowell & Moring
dstepp@crowell.com
