On June 17, 2022, the Department of Homeland Security (DHS) – which serves as the chair of the Forced Labor Enforcement Task Force (FLETF) – released the Strategy to Prevent the Importation of Goods Mined, Produced, or Manufactured with Forced Labor in the People’s Republic of China (UFLPA Strategy) Report. The UFLPA Strategy Report was submitted to Congress, as required by to the UFLPA, and provides the trade community the strategy developed by the FLETF for preventing the importation into the United States of goods mined, produced, or manufactured wholly or in part with forced labor in the People’s Republic of China (PRC). Within the UFLPA Strategy Report, notable sections that importers should consider include:
- UFLPA required lists (including the UFLPA Entity List) and enforcement plans;
- Efforts, initiatives, tools, and technologies to identify and trace goods;
- CBP plans to enhance its use of legal authorities and tools to prevent entry of goods at U.S. ports in violation of 19 U.S.C. § 1307; and
- Guidance to importers;
Individual overviews of each of these sections are provided below.
(1) UFLPA Required Lists and Enforcement Plans
UFLPA Required Lists
Section 2(d)(2)(B) of the UFLPA outlines the lists and plans that the UFLPA Strategy Report must present to Congress and the public. Per the Strategy Report, DHS published the below lists of entities, which are all subject to the rebuttable presumption that their products are produced, wholly or in part, using forced labor and are prohibited from entry into the U.S., effective June 21, 2022. The initial sources for the entities listed in Sections 2(d)(2)(B)(i), (ii), (iv), and (v) are CBP WROs and BIS’s Entity List.
Entities in Xinjiang (and their products) that mine, produce, or manufacture wholly or in part any goods, wares, articles and merchandise with forced labor
| Entity Names | Products |
| Baoding LYSZD Trade and Business Co., Ltd. | Apparel |
| Changji Esquel Textile Co. Ltd. (and one alias101: Changji Yida Textile) | Textiles; Clothing |
| Hetian Haolin Hair Accessories Co. Ltd. (and two aliases: Hotan Haolin Hair Accessories; and Hollin Hair Accessories) | Hair Products |
| Hetian Taida Apparel Co., Ltd (and one alias: Hetian TEDA Garment) | Garments |
| Hoshine Silicon Industry (Shanshan) Co., Ltd (including one alias: Hesheng Silicon Industry (Shanshan) Co.) and subsidiaries | Silica-Based Products |
| Xinjiang Daqo New Energy, Co. Ltd (including three aliases: Xinjiang Great New Energy Co., Ltd.; Xinjiang Daxin Energy Co., Ltd.; and Xinjiang Daqin Energy Co., Ltd.) | Polysilicon, including Solar-Grade Polysilicon |
| Xinjiang East Hope Nonferrous Metals Co. Ltd. (including one alias: Xinjiang Nonferrous) | Polysilicon, including Solar-Grade Polysilicon |
| Xinjiang GCL New Energy Material Technology, Co. Ltd (including one alias: Xinjiang GCL New Energy Materials Technology Co.) | Polysilicon, including Solar-Grade Polysilicon |
| Xinjiang Junggar Cotton and Linen Co., Ltd. | Cotton; Processed Cotton |
| Xinjiang Production and Construction Corps (including three aliases: XPCC; Xinjiang Corps; and Bingtuan) and its subordinate and affiliated entities | Cotton and Cotton Products |
Entities in Xinjiang (and their products) that mine, produce, or manufacture wholly or in part any goods, wares, articles and merchandise with forced labor
| Entity Names | Products |
| Aksu Huafu Textiles Co. (including two aliases: Akesu Huafu and Aksu Huafu Dyed Melange Yarn) | Textiles; Clothing |
| Hefei Bitland Information Technology Co., Ltd. (including three aliases: Anhui Hefei Baolongda Information Technology; Hefei Baolongda Information Technology Co., Ltd.; and Hefei Bitland Optoelectronic Technology Co., Ltd.) | Computer parts; Electronics |
| Hefei Meiling Co. Ltd. (including one alias: Hefei Meiling Group Holdings Limited) | Electronics |
| KTK Group (including three aliases: Jiangsu Jinchuang Group; Jiangsu Jinchuang Holding Group; and KTK Holding) | Rail Transportation Equipment |
| Lop County Hair Product Industrial Park | Hair Products |
| Lop County Meixin Hair Products Co., Ltd. | Hair Products |
| Nanjing Synergy Textiles Co., Ltd. (including two aliases: Nanjing Xinyi Cotton Textile Printing and Dyeing; and Nanjing Xinyi Cotton Textile) | Textiles; Clothing |
| No. 4 Vocation Skills Education Training Center (VSETC) | All Products |
| Tanyuan Technology Co. Ltd. (including five aliases: Carbon Yuan Technology; Changzhou Carbon Yuan Technology Development; Carbon Element Technology; Jiangsu Carbon Element Technology; and Tanyuan Technology Development) | Touch Screens for Handheld Devices and Cars; Other Similar Products. Electronics |
| Xinjiang Production and Construction Corps (XPCC) and its subordinate and affiliated entities | Cotton and Cotton Products |
Facilities and entities (and their products), including the Xinjiang Production and Construction Corps, that source material from Xinjiang or from persons working with the government of Xinjiang or the Xinjiang Production and Construction Corps for purposes of the ‘‘poverty alleviation’’ program or the ‘‘pairing-assistance’’ program or any other government-labor scheme that uses forced labor
| Entity Names | Products |
| Baoding LYSZD Trade and Business Co., Ltd. | Apparel |
| Hefei Bitland Information Technology Co. Ltd. | Computer parts; Electronics |
| Hetian Haolin Hair Accessories Co. Ltd. | Hair Products |
| Hetian Taida Apparel Co., Ltd. | Garments |
| Hoshine Silicon Industry (Shanshan) Co., Ltd., and Subsidiaries | Silica-Based Products |
| Xinjiang Junggar Cotton and Linen Co., Ltd. | Cotton; Processed Cotton |
| Lop County Hair Product Industrial Park | Hair Products |
| Lop County Meixin Hair Products Co., Ltd. | Hair Products |
| No. 4 Vocation Skills Education Training Center (VSETC) | All Products |
| Xinjiang Production and Construction Corps (XPCC) and its subordinate and affiliated entities | Cotton and Cotton Products |
| Yili Zhuowan Garment Manufacturing Co., Ltd. | Apparel |
In addition to the provided lists above, FLETF agencies will also be able to recommend the addition, removal, or modification of entities for the UFLPA Entity List. The UFLPA Entity List consists of the above mentioned entities, and can also be found on the DHS FLETF website here. Per the Strategy Report, the Department of State (DOS), in coordination with the FLETF, will provide U.S. embassies abroad guidance on the identification of prospective new entities and facilities in Xinjiang and the PRC that produce goods using forced labor. DOS, when appropriate, will submit recommendations for additions and/or removals of entries to the UFLPA Entity List.
CBP will also be using a range of tools to identify entities in Xinjiang that use forced labor via any PRC government-labor schemes. This may include entities within Xinjiang as well as entities within or outside of Xinjiang that use Xinjiang-produced products in their supply chain.
Lastly, the Department of Commerce’s Bureau of Industry and Security (BIS) will identify additional facilities or entities using the End-Use Review Committee (ERC) process as set forth under the EAR.
In addition to the entity lists, the Strategy Report also includes a list of high priority sectors for enforcement, provided below. The rebuttable presumption will apply to all products within these high-priority sectors produced in Xinjiang or by entities in the UFLPA Entity List.
| High-priority sectors for enforcement, which shall include cotton, tomatoes, and polysilicon |
| Apparel |
| Cotton and cotton products |
| Silica-based products (including polysilicon) |
| Tomatoes and downstream products |
Enforcement Plans
The UFLPA requires the FLETF to create an enforcement plan for each such entity whose goods are exported into the United States, which may include issuing withhold release orders (WROs) to support enforcement with respect to the entity.
DOS, U.S. embassies, and consulates – in coordination with other federal departments and agencies – will engage with foreign governments to emphasize the U.S.’s commitment to end forced labor. These engagements will also aim to encourage foreign governments to prevent the rerouting of shipments of products with forced labor to third countries, and encourage other foreign governments to pursue complimentary action to prevent the importation of forced labor goods. Our contacts have indicated that CBP is not allowing export or reroute detained goods to either Mexico or Canada.
“CBP will identify and interdict shipments exported to the United States by those entities located in Xinjiang, subsidiaries and affiliates of the XPCC, and any other entities, whether or not located in Xinjiang, found to utilize products in their supply chain produced in Xinjiang.” P. 22. The agency will employ a risk-based approach to prioritize the highest-risk goods, which include goods imported directly from Xinjiang into the United States and from entities on the UFLPA Entity List, illegally transshipped goods with inputs from Xinjiang, as well as goods imported into the United States by entities that, although not located in Xinjiang, are related to an entity in Xinjiang and are likely to contain inputs from that region.
Finally, in addition to CBP identifying and stopping goods subject to the UFLPA’s rebuttable presumption, the DHS’s Center for Countering Human Trafficking (CCHT) will send viable referrals of allegations of forced labor by entities in the PRC or their affiliates to Homeland Security Investigation (HSI) offices for pursuit of criminal investigations and federal prosecution.
(2) Efforts, Initiatives, Tools, and Technologies
To better identify and trace goods made in Xinjiang, the Strategy Report provides recommendations for efforts, initiatives, tools, and technologies that will assist CBP. The goal of the recommendations is to improve supply-chain tracing and identify Xinjiang goods entering the U.S.
CBP first notes that it is assessing the use of new supply-chain tracing technology, “specifically those technologies that support enhanced visibility into trade networks and supply chains that sources goods or materials made with forced labor.” While CBP did not identify the specific technology or tool it would use, the agency does identify the following technological capabilities it would prioritize:
- Integration of commercial-data sources with artificial intelligence and machine learning;
- Scanning, translation, and data extraction of non-text-searchable documents and sources;
- Remote sensing to support the digital traceability of raw materials sourced from Xinjiang;
- Foreign corporate registry data to map the structure of multinational companies and their global corporate networks; and
- Mapping major global supply chains that source from Xinjiang.
CBP also noted that it would invest into its existing automated systems. Specifically, CBP plans to enhance its current case management system to include an official record of forced labor investigation’s life cycle. The system will include all evidence, correspondence, and related documents to the investigation. Other investments in CBP automated processes related to forced labor detentions, reviews, validations, and subsequent actions include the following:
- Automating detention and seizure notices to provide immediate shipment status notifications to relevant parties (importer and broker);
- Developing a portal where importers submit evidence to contest the UFLPA rebuttable presumption, which will expedite admissibility determinations; and,
- Creating a common interface where field operators can access laboratory validation results for imported goods suspected of originating in regions at high-risk for forced labor and directly connect to existing systems that document release or enforcement efforts based on laboratory validation results.
(3) CBP Enhancement of Legal Authorities
To prevent the entry of goods that are in violation of 19 U.S.C. 1307, CBP will have the authority to use, but is not limited to, detention and exclusion authorities under 19 U.S.C. 1499 and seizure authorities under 19 U.S.C. 1595a(c). CBP is also considering regulation revisions that will allow the agency to respond more quickly to allegations of forced labor; provide importers with clear guidance as to processes, requirements, and timeframes for admissibility and exception determinations; and more uniformly implement admissibility determination processes for those determinations.
(4) Guidance to Importers
As previously noted, the UFLPA requires the Commissioner of CBP to apply a rebuttable presumption that all goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in Xinjiang, or by entities on the UFLPA Entity List, are prohibited from entry into the United States under 19 U.S.C. 1307. Should merchandise be detained that an importer notes is not within the scope of the UFLPA rebuttable presumption, an importer may provide to CBP information that indicates that the goods are not subject to the UFLPA (i.e. the goods are sourced completely outside of Xinjiang and have no connection to the entities on the Entity List).
For detained imported goods within the scope of the UFLPA, an importer may request an exception to the rebuttable presumption that the products were made with forced labor. This exception request requires an importer to demonstrate that they have complied with the guidance set forth in this section, responded completely and substantively to all CBP requests for information, as well as demonstrate, by clear and convincing evidence that its imports were not mined, produced, or manufactured wholly or in part with forced labor. The chart below provides an overview of the two scenarios and the recommendations provided by the Strategy Report for how importers may respond:
| Evidence to demonstrate that a good was not mined, produced, or manufactured, wholly or in part, in Xinjiang. Supply chain tracing is the general method to demonstrate that the goods are not mined, produced, or manufactured in Xinjiang. Based on the available facts and circumstances, CBP may request evidence to demonstrate supply-chain tracing of the entries supply chain of an imported goods or its components. Documentation should include: – Detailed description of the supply chain for the imported good and components thereof, including all stages of mining, production, or manufacture, including any step of the sourcing, manufacturing, or processing of goods in third countries. This includes documenting how the imported good was made from raw materials to finished good, by what entities, and where, including all in-house manufacturing, sub-assembly operations, and outsourced production related to the imported good. This also includes documenting the roles of the entities involved at each stage of the supply chain, as well as the relationship between the entities (e.g., whether a supplier is also a manufacturer). – Evidence that indicates the provenance of each component of the imported good. When possible, unique identifiers should be used to track raw materials and other inputs through the supply chain. When raw materials/inputs from different suppliers are commingled, there should be an auditable process for demonstrating the origin and control of each raw material or input. The Strategy Report notes that DNA traceability or isotopic testing may make it possible to identify the origin of particular goods or materials without tracing the supply chain. However, for such evidence to be considered, importers must demonstrate: – Its reliability – How it relates to the part of the supply chain for which the alternative evidence is being substituted – How the rest results are traceable to the specific import under CBP review |
| Evidence to demonstrate that a good originating in the PRC, including goods detained or seized pursuant to 19 U.S.C. § 1307, was not mined, produced, or manufactured wholly or in part by forced labor Importers must provide “clear and convincing” evidence that the good was not mined, produced, or manufactured wholly or in part by forced labor to CBP to obtain an exception to the UFLPA presumption. While this section outlines the forms of evidence that will typically facilitate a determination, the evidence may vary based on the facts and circumstances of the import in question. The provided evidence must demonstrate that the indicators of forced labor – such as intimidation and threats, abuse of vulnerability, restriction of movement, isolation, abusive living and/or working conditions, and excessive hours – do not exist or are fully remediated. The type of evidence may include: – Mapping of the entire supply chain, and transport along the supply chain, including which entities were involved at each stage; – Complete lists of all workers at an entity subject to the rebuttable presumption in the production of the imported goods, and evidence that demonstrates how and to whom wages are paid, identifies if each come from Xinjiang and residency status, and demonstrates that output is consistent with the documented workers; – Proof that none of the workers who were involved were a) recruited, b) transported, c) transferred, d) harbored, or e) received with the involvement of the government of the PRC, XPCC, or entities on the UFLPA Entity List. Evidence should specifically address the controls each entity has in place to ensure that all workers are recruited voluntarily – Proof that every worker from Xinjiang is working voluntarily, and without menace or threat of penalty |
For additional information on the evidence needed for when merchandise is detained by CBP, refer to our post on CBP’s UFLPA Operational Guidance here.
Due Diligence, Supply-Chain Tracing, and Supply-Chain Management Measures
While the chart above provides the recommendations in the Strategy Report for importers that have had their merchandise detained, the Strategy Report also provides guidance to importers on effective due diligence, supply-chain tracing, and supply-chain management measures.
Regarding due diligence, the Strategy Report refers to the Department of Labor’s (DOL’s) Comply Chain website, which lays out ways in which importers can demonstrate due diligence by developing a due diligence system. The Strategy Report notes that an effective due diligence system in any industry includes the following elements:
- Engagement with stakeholders and partners
- Assessment of risks and impacts
- Development of a code of conduct
- Communication and training across the supply chain
- Monitoring of compliance
- Remediation of violations
- Independent reviews
- Report of performance and engagement
The Strategy Report also provides importers with recommendations on effective supply-chain tracing. Importers should “map” the entire supply chain, up to and including suppliers of raw materials used in the production of the imported good or material, and identify who is doing the work at each step in the process as well as the condition under which the work is being done. Importers are also recommended to demonstrate chain custody of goods and material from the beginning of the supply chain down to the buyer of the finished good.
Finally, the Strategy Report provides recommendations on the supply-chain management measures importers should take to prevent and mitigate identified risks of forced labor. These include:
- Having a process to vet potential suppliers for forced labor prior to entering a contract with them;
- Requiring that supplier contracts necessitate corrective action by the supplier if forced labor is identified in the supply chain;
- Outlining the consequences if corrective action is not taken, such as termination of the contractual relationship
- Having access to documentation, personnel, and workers for verification of the absence of forced labor indicators, including at the recruitment stage.
DHS’s Strategy to Prevent the Importation of Goods Mined, Produced, or Manufactured with Forced Labor in the People’s Republic of China can be found here. The UFLPA Entity List can be found here, and additional DHS resources on the UFLPA can also be found here.
For more information on the UFLPA and actions addressing human rights and forced labor abuses, contact our team and see previous posts below
For further information, please contact:
David Stepp, Partner, Crowell & Moring
dstepp@crowell.com
