Uyghur Forced Labor Prevention Act Becomes Law
On December 23, President Biden signed the long-debated Uyghur Forced Labor Prevention Act (UFLPA), after it passed through both chambers of Congress with strong bipartisan support. This legislation has the potential to broadly impact industries and companies with supply chain linkages to China. On January 24, 2022, the U.S. government opened a public comment period on the publication of a strategy that will contain details critical to industry compliance and risk mitigation. That comment period closed on March 10, 2022. On April 8, 2022, the Department of Homeland Security (DHS) will hold a public hearing "on the use of forced labor in the People’s Republic of China and potential measures to prevent the importation of goods produced, mined, or manufactured, wholly or in part, with forced labor in the People’s Republic of China into the United States."
Application of “Rebuttable Presumption” to Ban Imports
The overarching goal of the UFLPA is to prevent goods made with forced labor by Uyghurs and members of other persecuted groups in the People’s Republic of China from entering the U.S. The UFLPA will require the Commissioner of Customs and Border Protection (CBP) to apply a “rebuttable presumption” to any goods that are produced wholly or in part in the Xinjiang Autonomous Uyghur Region (XUAR) or by an entity included on one of the forthcoming entity lists. Such goods will effectively be banned from import under Section 307 of the Tariff Act of 1930, unless the importer can demonstrate applicability of a narrow and difficult to meet exception.
An exception from the rebuttable presumption is available only where the Commissioner of CBP determines that the importer:
- Fully complied with new importer guidance and any regulations issued to implement that guidance;
- Completely and substantively responded to all inquiries for information submitted by the Commissioner of CBP to ascertain whether forced labor was used; and
- Provided “clear and convincing evidence” that the goods were not mined, produced, or manufactured wholly or in part by forced labor.
Under the UFLPA, the Forced Labor Enforcement Task Force – a cross-agency task force established under the United States-Mexico-Canada Agreement Implementation Act – must publish a government strategy that includes the entity lists and the new importer guidance that will be needed to overcome the presumption (among other items). The importer guidance must specifically cover:
- Due diligence, effective supply chain tracing, and supply chain management measures;
- The type, nature, and extent of evidence that demonstrates that goods originating in the People’s Republic of China were not mined, produced, or manufactured wholly or in part in the XUAR; and
- The type, nature, and extent of evidence that demonstrates that goods originating in the People’s Republic of China were not mined, produced, or manufactured wholly or in part with forced labor.
The rebuttable presumption becomes effective and enforceable on the same date as the deadline for publication of the strategy – June 21, 2022 – which may initially make it particularly difficult to meet the exception.
On January 24, 2022, the Task Force published in the Federal Register a notice soliciting public comments on “how best to ensure that goods mined, produced, or manufactured wholly or in part with forced labor in the People’s Republic of China, including by Uyghurs, Kazakhs, Kyrgyz, Tibetans, and members of other persecuted groups in the People’s Republic of China, and especially in the Xinjiang Uyghur Autonomous Region, are not imported into the United States." The notice requests feedback on a non-exhaustive list of 18 questions that will help guide the Task Force’s development of the strategy. The deadline for submitting comments was March 10, 2022.
On April 8, 2022, DHS will hold a public hearing on the use of forced labor in the People’s Republic of China and measures to prevent the importation of goods produced, mined, or manufactured, wholly or in part, with forced labor in the People’s Republic of China into the U.S. Hearing topics include, but are not limited to, risks of importing goods made wholly or in part with forced labor; measures that can be taken to trace the origin of goods and to offer greater supply chain transparency; and high priority sectors for enforcement. The hearing will be held remotely from 9 a.m. to 1:30 p.m. EST. To attend, members of the public must register by Wednesday, March 30, 2022, at 11:59 p.m. EST.
The UFLPA also authorizes additional sanctions under the Uyghur Human Rights Policy Act of 2020, and will require the Secretary of State to develop a diplomatic strategy to address forced labor in the XUAR. This diplomatic strategy will include a plan to coordinate and collaborate with NGOs and private sector entities to raise awareness of the goods produced wholly or in part in the XUAR, and a plan for working with private sector entities seeking to conduct supply chain due diligence to prevent the importation of goods made wholly or in part with forced labor.
CBP will begin applying the rebuttable presumption 180 days from enactment, which is June 21, 2022.
Beveridge & Diamond’s Sustainability, ESG and Product Stewardship, Global Supply Chains practices advise companies on all aspects of sustainable supply chain and product stewardship management, including responsible sourcing, human rights due diligence and disclosures, product compliance, and reuse and recycling. This work is further supplemented by our active China practice. We help the legal, corporate, communications, and environmental, health, and safety teams at large and small companies to identify, understand, and comply with the complex regulatory requirements impacting the hyper-competitive and evolving consumer goods market. For more information, please contact the authors.