The potential impact of the Uyghur Forced Labor Prevention Act (“Act”) is sweeping. For companies concerned about potential supply chain disruptions, there is now opportunity to help shape the enforcement strategy required under the Act. On January 24, 2022, the Department of Homeland Security published in the Federal Register a request for public comments. To date, few comments have been submitted.
US importers and other interested parties should consider submitting comments that will both inform the Forced Labor Enforcement Task Force of the challenges companies face vetting their supply chains across industries, as well as provide insight into the effectiveness of various compliance-focused measures. Comments must be submitted here no later than March 10, 2022.
As we previously discussed in our blog, the Act, among other things, establishes a rebuttable presumption that all goods (i) “mined, produced, or manufactured wholly or in part” in the Xinjiang Uyghur Autonomous Region of China, or (ii) produced by a yet-to-be-identified entity on one of the lists required under the Act, are made with forced labor. Such goods will be prohibited from entering into the United States under Section 307 of the Tariff Act of 1930, 19 U.S.C. § 1307, which is enforced by US Customs and Border Protection (“CBP”). The Act takes effect on June 21, 2022.
The Federal Register notice requests information on several key topics that will be considered. Among those, companies may want to consider making specific recommendations as to:
- The types of documents and information that should satisfy the “clear and convincing” evidentiary standard sufficient to obtain release of goods detained pursuant to the Act. Although CBP has issued various guidance documents related to forced labor enforcement, the agency has not issued guidance on specific types of documents and information necessary to obtain release of goods detained, for example, under a withhold release order (“WRO”), which has resulted in uncertainty around how detention risks should be managed. The evidentiary standard is high, and CBP often does not release goods detained on suspicion of being manufactured with forced labor.
- The level of due diligence expected and required for importers to demonstrate “reasonable care” in their import transactions on matters related to forced labor compliance, including, for example, recommended supply chain traceability and verification standards. As the US government’s enforcement on forced labor continues to evolve, companies could benefit from a set of due diligence best practices as they further manage and mitigate relevant risks.
- Greater transparency related to forced labor enforcement, especially for companies in China that export to the United States or produce goods and raw materials for the US market. This could include, for example, details concerning the basis for a finding or WRO, or specific recommendations as to the types of documents and information required to respond to CBP investigations prior to the issuance of a WRO. Comments related to more effective and transparent processes related to the designation of parties under the Act should also be considered.
If you are interested in submitting comments or have any questions about the comment process, please contact any member of our team.
